diff --git a/CHANGELOG.md b/CHANGELOG.md
index 9ab42d9..f2f8edb 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -15,6 +15,8 @@ All notable changes to the Docker Language Server will be documented in this fil
 - Bake
   - textDocument/codeLens
     - refactor the URI handling code so it will accept a WSL URI with a dollar sign ([#388](https://github.com/docker/docker-language-server/issues/388))
+  - textDocument/completion
+    - fix build stage and ARG name inference completion items for files in a folder under the `\\wsl$` host ([#396](https://github.com/docker/docker-language-server/issues/396))
   - textDocument/definition
     - handle WSL URIs with a dollar sign properly to fix build stage lookups on those hosts ([#390](https://github.com/docker/docker-language-server/issues/390))
     - handle WSL URIs with a dollar sign properly to fix build ARG reference lookups on those hosts ([#393](https://github.com/docker/docker-language-server/issues/393))
diff --git a/internal/bake/hcl/completion.go b/internal/bake/hcl/completion.go
index 065ad2d..e4ec45a 100644
--- a/internal/bake/hcl/completion.go
+++ b/internal/bake/hcl/completion.go
@@ -68,12 +68,12 @@ func Completion(ctx context.Context, params *protocol.CompletionParams, manager
 				}
 			}
 
-			dockerfilePath, err := bakeDocument.DockerfileForTarget(b)
+			dockerfileURI, dockerfilePath, err := bakeDocument.DockerfileDocumentPathForTarget(b)
 			if dockerfilePath == "" || err != nil {
-				continue
+				break
 			}
 
-			_, nodes := document.OpenDockerfile(ctx, manager, "", dockerfilePath)
+			_, nodes := document.OpenDockerfile(ctx, manager, dockerfileURI, dockerfilePath)
 			if nodes != nil {
 				if attribute, ok := attributes["target"]; ok && isInsideRange(attribute.Expr.Range(), params.Position) {
 					if _, ok := attributes["dockerfile-inline"]; ok {
@@ -119,8 +119,8 @@ func Completion(ctx context.Context, params *protocol.CompletionParams, manager
 						}
 					}
 				}
-				break
 			}
+			break
 		}
 	}
 
diff --git a/internal/bake/hcl/completion_test.go b/internal/bake/hcl/completion_test.go
index bb75fc6..b004ef5 100644
--- a/internal/bake/hcl/completion_test.go
+++ b/internal/bake/hcl/completion_test.go
@@ -400,6 +400,111 @@ func TestCompletion(t *testing.T) {
 	}
 }
 
+func TestCompletion_WSL(t *testing.T) {
+	testCases := []struct {
+		name              string
+		content           string
+		dockerfileContent string
+		line              uint32
+		character         uint32
+		items             []protocol.CompletionItem
+	}{
+		{
+			name:              "target attribute in target block",
+			content:           "target \"api\" {\n  target = \"\"\n}",
+			line:              1,
+			dockerfileContent: "",
+			character:         12,
+			items: []protocol.CompletionItem{
+				{
+					Label: "base",
+				},
+				{
+					Label: "tests",
+				},
+				{
+					Label: "release",
+				},
+			},
+		},
+		{
+			name:              "args keys in target block",
+			content:           "target \"api\" {\n  args = {\n    \"blah\" = \"\"\n  }\n}",
+			line:              2,
+			dockerfileContent: "",
+			character:         5,
+			items: []protocol.CompletionItem{
+				{
+					Label: "TARGETOS",
+				},
+				{
+					Label: "TARGETARCH",
+				},
+				{
+					Label: "argOne",
+				},
+				{
+					Label: "argTwo",
+				},
+				{
+					Label: "argOnePredefined",
+				},
+			},
+		},
+		{
+			name:      "resolve build stage targets from a Dockerfile inside a context folder",
+			content:   "target \"backend\" {\n  context = \"./backend\"\n  target=\"\"\n}",
+			line:      2,
+			character: 10,
+			items: []protocol.CompletionItem{
+				{
+					Label: "nested",
+				},
+			},
+		},
+	}
+
+	wd, err := os.Getwd()
+	require.NoError(t, err)
+	projectRoot := filepath.Dir(filepath.Dir(filepath.Dir(wd)))
+	completionTestFolderPath := path.Join(projectRoot, "testdata", "completion")
+
+	dockerfilePath := filepath.ToSlash(filepath.Join(completionTestFolderPath, "Dockerfile"))
+	backendDockerfilePath := filepath.ToSlash(filepath.Join(completionTestFolderPath, "backend", "Dockerfile"))
+
+	dockerfileBytes, err := os.ReadFile(dockerfilePath)
+	require.NoError(t, err)
+	backendDockerfileBytes, err := os.ReadFile(backendDockerfilePath)
+	require.NoError(t, err)
+
+	dockerfileURI := uri.URI("file://wsl%24/docker-desktop/tmp/Dockerfile")
+	backendDockerfileURI := uri.URI("file://wsl%24/docker-desktop/tmp/backend/Dockerfile")
+	bakeFileURI := uri.URI("file://wsl%24/docker-desktop/tmp/docker-bake.hcl")
+
+	for _, tc := range testCases {
+		t.Run(tc.name, func(t *testing.T) {
+			manager := document.NewDocumentManager()
+			changed, err := manager.Write(context.Background(), dockerfileURI, protocol.DockerfileLanguage, 1, dockerfileBytes)
+			require.NoError(t, err)
+			require.True(t, changed)
+			changed, err = manager.Write(context.Background(), backendDockerfileURI, protocol.DockerfileLanguage, 1, backendDockerfileBytes)
+			require.NoError(t, err)
+			require.True(t, changed)
+
+			doc := document.NewBakeHCLDocument(bakeFileURI, 1, []byte(tc.content))
+			list, err := Completion(context.Background(), &protocol.CompletionParams{
+				TextDocumentPositionParams: protocol.TextDocumentPositionParams{
+					TextDocument: protocol.TextDocumentIdentifier{URI: string(bakeFileURI)},
+					Position:     protocol.Position{Line: tc.line, Character: tc.character},
+				},
+			}, manager, doc)
+			require.NoError(t, err)
+			require.False(t, list.IsIncomplete)
+			require.Equal(t, tc.items, list.Items)
+		})
+	}
+}
+
 func TestIsInsideRange(t *testing.T) {
 	testCases := []struct {
 		name     string