diff --git a/src/Analysis/Ast/Test/PathClassificationTests.cs b/src/Analysis/Ast/Test/PathClassificationTests.cs
index 429df72b7..b6dac71eb 100644
--- a/src/Analysis/Ast/Test/PathClassificationTests.cs
+++ b/src/Analysis/Ast/Test/PathClassificationTests.cs
@@ -214,5 +214,39 @@ public void InsideStdLib() {
                 new PythonLibraryPath(src, PythonLibraryPathType.Unspecified),
             });
         }
+
+        [TestMethod]
+        public void SiteOutsideStdlib() {
+            var appPath = TestData.GetTestSpecificPath("app.py");
+            var root = Path.GetDirectoryName(appPath);
+
+            var venv = Path.Combine(root, "venv");
+            var venvLib = Path.Combine(venv, "Lib");
+            var sitePackages = Path.Combine(root, "site-packages");
+
+            var src = Path.Combine(root, "src");
+
+            var fromInterpreter = new[] {
+                new PythonLibraryPath(venvLib, PythonLibraryPathType.StdLib),
+                new PythonLibraryPath(venv, PythonLibraryPathType.StdLib),
+                new PythonLibraryPath(sitePackages, PythonLibraryPathType.Site),
+            };
+
+            var fromUser = new[] {
+                "./src",
+            };
+
+            var (interpreterPaths, userPaths) = PythonLibraryPath.ClassifyPaths(root, _fs, fromInterpreter, fromUser);
+
+            interpreterPaths.Should().BeEquivalentToWithStrictOrdering(new[] {
+                new PythonLibraryPath(venvLib, PythonLibraryPathType.StdLib),
+                new PythonLibraryPath(venv, PythonLibraryPathType.StdLib),
+                new PythonLibraryPath(sitePackages, PythonLibraryPathType.Site),
+            });
+
+            userPaths.Should().BeEquivalentToWithStrictOrdering(new[] {
+                new PythonLibraryPath(src, PythonLibraryPathType.Unspecified),
+            });
+        }
     }
 }
diff --git a/src/Analysis/Core/Impl/Interpreter/PythonLibraryPath.cs b/src/Analysis/Core/Impl/Interpreter/PythonLibraryPath.cs
index 5a1b3e4a0..dfb9760a1 100644
--- a/src/Analysis/Core/Impl/Interpreter/PythonLibraryPath.cs
+++ b/src/Analysis/Core/Impl/Interpreter/PythonLibraryPath.cs
@@ -186,11 +186,14 @@ public static async Task<List<PythonLibraryPath>> GetSearchPathsFromInterpreterA
             try {
                 var output = await ps.ExecuteAndCaptureOutputAsync(startInfo, cancellationToken);
                 return output.Split(new[] { Environment.NewLine }, StringSplitOptions.RemoveEmptyEntries).Select(s => {
-                    if (PathUtils.PathStartsWith(s, tempWorkingDir)) {
-                        return null;
-                    }
                     try {
-                        return Parse(s);
+                        var p = Parse(s);
+
+                        if (PathUtils.PathStartsWith(p.Path, tempWorkingDir)) {
+                            return null;
+                        }
+
+                        return p;
                     } catch (ArgumentException) {
                         Debug.Fail("Invalid search path: " + (s ?? "<null>"));
                         return null;
@@ -249,6 +252,12 @@ IEnumerable<string> fromUser
                     continue;
                 }
 
+                // If Python says it's site, then treat is as interpreter.
+                if (p.Type == PythonLibraryPathType.Site) {
+                    interpreterPaths.Add(p);
+                    continue;
+                }
+
                 // If path is outside the workspace, then treat it as interpreter.
                 if (root == null || !fs.IsPathUnderRoot(root, p.Path)) {
                     interpreterPaths.Add(p);