diff --git a/src/System.Management.Automation/engine/Modules/ModuleIntrinsics.cs b/src/System.Management.Automation/engine/Modules/ModuleIntrinsics.cs
index b687e5027635..c10ef3db9b40 100644
--- a/src/System.Management.Automation/engine/Modules/ModuleIntrinsics.cs
+++ b/src/System.Management.Automation/engine/Modules/ModuleIntrinsics.cs
@@ -1275,11 +1275,13 @@ private static string UpdatePath(string path, string pathToAdd, ref int insertIn
             if (!string.IsNullOrEmpty(pathToAdd))
             {
                 path = AddToPath(path, pathToAdd, insertIndex);
-                insertIndex = path.IndexOf(Path.PathSeparator, PathContainsSubstring(path, pathToAdd));
-                if (insertIndex != -1)
+                foreach (string addedSubPath in pathToAdd.Split(Path.PathSeparator, StringSplitOptions.RemoveEmptyEntries))
                 {
-                    // advance past the path separator
-                    insertIndex++;
+                    int newInsertIndex = PathContainsSubstring(path, addedSubPath) + addedSubPath.Length + 1;
+                    if (newInsertIndex > insertIndex)
+                    {
+                        insertIndex = newInsertIndex;
+                    }
                 }
             }
             return path;
diff --git a/test/powershell/engine/Module/ModulePath.Tests.ps1 b/test/powershell/engine/Module/ModulePath.Tests.ps1
index 5861455e726b..c1f584a3c72a 100644
--- a/test/powershell/engine/Module/ModulePath.Tests.ps1
+++ b/test/powershell/engine/Module/ModulePath.Tests.ps1
@@ -3,25 +3,22 @@
 Describe "SxS Module Path Basic Tests" -tags "CI" {
 
     BeforeAll {
-        if ($IsWindows)
-        {
+        if ($IsWindows) {
             $powershell = "$PSHOME\pwsh.exe"
             $ProductName = "WindowsPowerShell"
-            if ($IsCoreCLR -and ($PSHOME -notlike "*Windows\System32\WindowsPowerShell\v1.0"))
-            {
-                $ProductName =  "PowerShell"
+            if ($IsCoreCLR -and ($PSHOME -notlike "*Windows\System32\WindowsPowerShell\v1.0")) {
+                $ProductName = "PowerShell"
             }
             $expectedUserPath = Join-Path -Path $HOME -ChildPath "Documents\$ProductName\Modules"
             $expectedSharedPath = Join-Path -Path $env:ProgramFiles -ChildPath "$ProductName\Modules"
-            $userConfigPath = "~/Documents/powershell/powershell.config.json"
-        }
-        else
-        {
+        } else {
             $powershell = "$PSHOME/pwsh"
             $expectedUserPath = [System.Management.Automation.Platform]::SelectProductNameForDirectory("USER_MODULES")
             $expectedSharedPath = [System.Management.Automation.Platform]::SelectProductNameForDirectory("SHARED_MODULES")
-            $userConfigPath = "~/.config/powershell/powershell.config.json"
         }
+        $pwshUserDir = Split-Path $PROFILE.CurrentUserCurrentHost
+        if (!(Test-Path $pwshUserDir)) { New-Item -ItemType Directory -Path $pwshUserDir }
+        $userConfigPath = Join-Path $pwshUserDir powershell.config.json
 
         $userConfigExists = $false
         if (Test-Path $userConfigPath) {
@@ -201,6 +198,19 @@ Describe "SxS Module Path Basic Tests" -tags "CI" {
         $out = & $powershell -noprofile -command '$env:PSModulePath'
         $out.Split([System.IO.Path]::PathSeparator, [System.StringSplitOptions]::RemoveEmptyEntries) | Should -Not -BeLike $validation
     }
+
+    It 'PSModulePath set in powershell.config.json allows for multiple values' -Skip:(!$IsCoreCLR -or $skipNoPwsh) {
+        try {
+            $userConfig = '{ "PSModulePath": "' + "a$([System.IO.Path]::PathSeparator)b" + '"}'
+            Set-Content -Path $userConfigPath -Value $userConfig -Force
+            $out = & $powershell -noprofile -command 'powershell.exe -noprofile -command `$env:PSModulePath'
+            $psModulePaths = $out.Split([System.IO.Path]::PathSeparator, [System.StringSplitOptions]::RemoveEmptyEntries)
+            $psModulePaths | Should -Contain a
+            $psModulePaths | Should -Contain b
+        } finally {
+            Remove-Item -Path $userConfigPath -Force
+        }
+    }
 }
 
 Describe "ModuleIntrinsics.GetPSModulePath API tests" -tag @('CI', 'RequireAdminOnWindows', 'RequireSudoOnUnix') {