diff --git a/CHANGELOG.md b/CHANGELOG.md
index 06094bd75be0..4d65bff4a7a2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -28,6 +28,8 @@
    ([#16615](https://github.com/Microsoft/vscode-python/issues/16615))
 1. Ensure we block on autoselection when no interpreter is explictly set by user.
    ([#16723](https://github.com/Microsoft/vscode-python/issues/16723))
+1. Fix autoselection when opening a python file directly.
+   ([#16733](https://github.com/Microsoft/vscode-python/issues/16733))
 
 ### Thanks
 
diff --git a/src/client/common/configSettings.ts b/src/client/common/configSettings.ts
index 2bc5cfb24dfd..fc06923aba8e 100644
--- a/src/client/common/configSettings.ts
+++ b/src/client/common/configSettings.ts
@@ -679,18 +679,13 @@ export class PythonSettings implements IPythonSettings {
             const autoSelectedPythonInterpreter = this.interpreterAutoSelectionService.getAutoSelectedInterpreter(
                 this.workspaceRoot,
             );
-            if (inExperiment) {
-                if (autoSelectedPythonInterpreter && this.workspaceRoot) {
-                    this.pythonPath = autoSelectedPythonInterpreter.path;
+            if (autoSelectedPythonInterpreter) {
+                this.pythonPath = autoSelectedPythonInterpreter.path;
+                if (this.workspaceRoot) {
                     this.interpreterAutoSelectionService
                         .setWorkspaceInterpreter(this.workspaceRoot, autoSelectedPythonInterpreter)
                         .ignoreErrors();
                 }
-            } else if (autoSelectedPythonInterpreter && this.workspaceRoot) {
-                this.pythonPath = autoSelectedPythonInterpreter.path;
-                this.interpreterAutoSelectionService
-                    .setWorkspaceInterpreter(this.workspaceRoot, autoSelectedPythonInterpreter)
-                    .ignoreErrors();
             }
         }
         if (inExperiment && this.pythonPath === DEFAULT_INTERPRETER_SETTING) {
diff --git a/src/test/common/configSettings/configSettings.pythonPath.unit.test.ts b/src/test/common/configSettings/configSettings.pythonPath.unit.test.ts
index bced9e2f8c6d..06a58b65a053 100644
--- a/src/test/common/configSettings/configSettings.pythonPath.unit.test.ts
+++ b/src/test/common/configSettings/configSettings.pythonPath.unit.test.ts
@@ -6,7 +6,7 @@
 import { expect } from 'chai';
 import * as path from 'path';
 import * as sinon from 'sinon';
-import { anything, instance, mock, when } from 'ts-mockito';
+import { anything, instance, mock, verify, when } from 'ts-mockito';
 import * as typemoq from 'typemoq';
 import { Uri, WorkspaceConfiguration } from 'vscode';
 import { IWorkspaceService } from '../../../client/common/application/types';
@@ -118,7 +118,24 @@ suite('Python Settings - pythonPath', () => {
 
         expect(configSettings.pythonPath).to.be.equal('python');
     });
-    test("If we don't have a custom python path and we do have an auto selected interpreter, then use it", () => {
+    test("If a workspace is opened and if we don't have a custom python path but we do have an auto selected interpreter, then use it", () => {
+        const pythonPath = path.join(__dirname, 'this is a python path that was auto selected');
+        const interpreter = { path: pythonPath } as PythonEnvironment;
+        const workspaceFolderUri = Uri.file(__dirname);
+        const selectionService = mock(MockAutoSelectionService);
+        when(selectionService.getAutoSelectedInterpreter(workspaceFolderUri)).thenReturn(interpreter);
+        when(selectionService.setWorkspaceInterpreter(workspaceFolderUri, anything())).thenResolve();
+        configSettings = new CustomPythonSettings(workspaceFolderUri, instance(selectionService));
+        pythonSettings
+            .setup((p) => p.get(typemoq.It.isValue('pythonPath')))
+            .returns(() => 'python')
+            .verifiable(typemoq.Times.atLeast(1));
+        configSettings.update(pythonSettings.object);
+
+        expect(configSettings.pythonPath).to.be.equal(pythonPath);
+        verify(selectionService.setWorkspaceInterpreter(workspaceFolderUri, interpreter)).once(); // Verify we set the autoselected interpreter
+    });
+    test("If no workspace is opened and we don't have a custom python path but we do have an auto selected interpreter, then use it", () => {
         const pythonPath = path.join(__dirname, 'this is a python path that was auto selected');
         const interpreter = { path: pythonPath } as PythonEnvironment;
         const workspaceFolderUri = Uri.file(__dirname);