diff --git a/Lib/test/test_cmd_line_script.py b/Lib/test/test_cmd_line_script.py
index d773674fee..122c4ac16d 100644
--- a/Lib/test/test_cmd_line_script.py
+++ b/Lib/test/test_cmd_line_script.py
@@ -411,8 +411,6 @@ def test_issue8202(self):
                                    script_name, script_name, script_dir, 'test_pkg',
                                    importlib.machinery.SourceFileLoader)
 
-    # TODO: RUSTPYTHON
-    @unittest.expectedFailure
     def test_issue8202_dash_c_file_ignored(self):
         # Make sure a "-c" file in the current directory
         # does not alter the value of sys.path[0]
@@ -713,8 +711,6 @@ def test_syntaxerror_null_bytes_in_multiline_string(self):
                     ]
                 )
 
-    # TODO: RUSTPYTHON
-    @unittest.expectedFailure
     def test_consistent_sys_path_for_direct_execution(self):
         # This test case ensures that the following all give the same
         # sys.path configuration:
diff --git a/src/lib.rs b/src/lib.rs
index 8d27805893..8ee22d4eb5 100644
--- a/src/lib.rs
+++ b/src/lib.rs
@@ -169,16 +169,9 @@ fn run_rustpython(vm: &VirtualMachine, run_mode: RunMode) -> PyResult<()> {
 
     let scope = setup_main_module(vm)?;
 
-    if !vm.state.config.settings.safe_path {
-        // TODO: The prepending path depends on running mode
-        // See https://docs.python.org/3/using/cmdline.html#cmdoption-P
-        vm.run_code_string(
-            vm.new_scope_with_builtins(),
-            "import sys; sys.path.insert(0, '')",
-            "<embedded>".to_owned(),
-        )?;
-    }
-
+    // Import site first, before setting sys.path[0]
+    // This matches CPython's behavior where site.removeduppaths() runs
+    // before sys.path[0] is set, preventing '' from being converted to cwd
     let site_result = vm.import("site", 0);
     if site_result.is_err() {
         warn!(
@@ -187,6 +180,22 @@ fn run_rustpython(vm: &VirtualMachine, run_mode: RunMode) -> PyResult<()> {
         );
     }
 
+    // _PyPathConfig_ComputeSysPath0 - set sys.path[0] after site import
+    if !vm.state.config.settings.safe_path {
+        let path0: Option<String> = match &run_mode {
+            RunMode::Command(_) => Some(String::new()),
+            RunMode::Module(_) => env::current_dir()
+                .ok()
+                .and_then(|p| p.to_str().map(|s| s.to_owned())),
+            RunMode::Script(_) | RunMode::InstallPip(_) => None, // handled by run_script
+            RunMode::Repl => Some(String::new()),
+        };
+
+        if let Some(path) = path0 {
+            vm.insert_sys_path(vm.new_pyobj(path))?;
+        }
+    }
+
     // Enable faulthandler if -X faulthandler, PYTHONFAULTHANDLER or -X dev is set
     // _PyFaulthandler_Init()
     if vm.state.config.settings.faulthandler {
diff --git a/src/settings.rs b/src/settings.rs
index f77db4d159..a63f1a07cc 100644
--- a/src/settings.rs
+++ b/src/settings.rs
@@ -339,6 +339,7 @@ pub fn parse_opts() -> Result<(Settings, RunMode), lexopt::Error> {
 /// Helper function to retrieve a sequence of paths from an environment variable.
 fn get_paths(env_variable_name: &str) -> impl Iterator<Item = String> + '_ {
     env::var_os(env_variable_name)
+        .filter(|v| !v.is_empty())
         .into_iter()
         .flat_map(move |paths| {
             split_paths(&paths)