diff --git a/news/2 Fixes/2744.md b/news/2 Fixes/2744.md
new file mode 100644
index 000000000000..28c59ff60495
--- /dev/null
+++ b/news/2 Fixes/2744.md	
@@ -0,0 +1 @@
+Ensure relative paths to python interpreters in `python.pythonPath` of `settings.json` are prefixed with `./` or `.\\` (depending on the OS).
diff --git a/src/client/interpreter/configuration/services/workspaceFolderUpdaterService.ts b/src/client/interpreter/configuration/services/workspaceFolderUpdaterService.ts
index 03c531f8dce9..922c8b0c9f87 100644
--- a/src/client/interpreter/configuration/services/workspaceFolderUpdaterService.ts
+++ b/src/client/interpreter/configuration/services/workspaceFolderUpdaterService.ts
@@ -14,7 +14,7 @@ export class WorkspaceFolderPythonPathUpdaterService implements IPythonPathUpdat
             return;
         }
         if (pythonPath.startsWith(this.workspaceFolder.fsPath)) {
-            pythonPath = path.relative(this.workspaceFolder.fsPath, pythonPath);
+            pythonPath = path.join('.', path.relative(this.workspaceFolder.fsPath, pythonPath));
         }
         await pythonConfig.update('pythonPath', pythonPath, ConfigurationTarget.WorkspaceFolder);
     }
diff --git a/src/client/interpreter/configuration/services/workspaceUpdaterService.ts b/src/client/interpreter/configuration/services/workspaceUpdaterService.ts
index 81624581d2f2..b97504a35654 100644
--- a/src/client/interpreter/configuration/services/workspaceUpdaterService.ts
+++ b/src/client/interpreter/configuration/services/workspaceUpdaterService.ts
@@ -14,7 +14,7 @@ export class WorkspacePythonPathUpdaterService implements IPythonPathUpdaterServ
             return;
         }
         if (pythonPath.startsWith(this.workspace.fsPath)) {
-            pythonPath = path.relative(this.workspace.fsPath, pythonPath);
+            pythonPath = path.join('.', path.relative(this.workspace.fsPath, pythonPath));
         }
         await pythonConfig.update('pythonPath', pythonPath, false);
     }
diff --git a/src/test/interpreters/pythonPathUpdater.test.ts b/src/test/interpreters/pythonPathUpdater.test.ts
index 35657bf82703..dc2e9bcb78f6 100644
--- a/src/test/interpreters/pythonPathUpdater.test.ts
+++ b/src/test/interpreters/pythonPathUpdater.test.ts
@@ -80,7 +80,7 @@ suite('Python Path Settings Updater', () => {
             const workspaceFolder = Uri.file(workspaceFolderPath);
             const updater = updaterServiceFactory.getWorkspaceFolderPythonPathConfigurationService(workspaceFolder);
             const pythonPath = Uri.file(path.join(workspaceFolderPath, 'env', 'bin', 'python')).fsPath;
-            const expectedPythonPath = path.join('env', 'bin', 'python');
+            const expectedPythonPath = path.join('.', 'env', 'bin', 'python');
             const workspaceConfig = setupConfigProvider(workspaceFolder);
             workspaceConfig.setup(w => w.inspect(TypeMoq.It.isValue('pythonPath'))).returns(() => undefined);
 
@@ -120,7 +120,7 @@ suite('Python Path Settings Updater', () => {
             const workspaceFolder = Uri.file(workspaceFolderPath);
             const updater = updaterServiceFactory.getWorkspacePythonPathConfigurationService(workspaceFolder);
             const pythonPath = Uri.file(path.join(workspaceFolderPath, 'env', 'bin', 'python')).fsPath;
-            const expectedPythonPath = path.join('env', 'bin', 'python');
+            const expectedPythonPath = path.join('.', 'env', 'bin', 'python');
             const workspaceConfig = setupConfigProvider(workspaceFolder);
             workspaceConfig.setup(w => w.inspect(TypeMoq.It.isValue('pythonPath'))).returns(() => undefined);