diff --git a/src/System.Management.Automation/engine/Modules/ImportModuleCommand.cs b/src/System.Management.Automation/engine/Modules/ImportModuleCommand.cs
index 745c69bbf64..21fd37e27ad 100644
--- a/src/System.Management.Automation/engine/Modules/ImportModuleCommand.cs
+++ b/src/System.Management.Automation/engine/Modules/ImportModuleCommand.cs
@@ -1978,6 +1978,22 @@ internal override IList<PSModuleInfo> ImportModulesUsingWinCompat(IEnumerable<st
                 string message = StringUtil.Format(Modules.WinCompatModuleWarning, moduleProxy.Name, WindowsPowerShellCompatRemotingSession.Name);
                 WriteWarning(message);
             }
+
+            // register LocationChanged handler so that $PWD in Windows PS process mirrors local $PWD changes
+            if (moduleProxyList.Count > 0)
+            {
+                // make sure that we add registration only once to a multicast delegate
+                SyncCurrentLocationDelegate ??= SyncCurrentLocationHandler;
+                var alreadyregistered = this.SessionState.InvokeCommand.LocationChangedAction?.GetInvocationList().Contains(SyncCurrentLocationDelegate);
+
+                if (!alreadyregistered ?? true)
+                {
+                    this.SessionState.InvokeCommand.LocationChangedAction += SyncCurrentLocationDelegate;
+
+                    // first sync has to be triggered manually
+                    SyncCurrentLocationHandler(sender: this, args: new LocationChangedEventArgs(sessionState: null, oldPath: null, newPath: this.SessionState.Path.CurrentLocation));
+                }
+            }
 #endif
             return moduleProxyList;
         }
diff --git a/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs b/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs
index 6fc4dcd0b14..8c71d4be4b7 100644
--- a/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs
+++ b/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs
@@ -4792,7 +4792,7 @@ internal static Collection<string> GetResolvedPathCollection(string filePath, Ex
             return filePaths;
         }
 
-        internal PSSession GetWindowsPowerShellCompatRemotingSession()
+        internal static PSSession GetWindowsPowerShellCompatRemotingSession()
         {
             PSSession result = null;
             var commandInfo = new CmdletInfo("Get-PSSession", typeof(GetPSSessionCommand));
@@ -4807,7 +4807,7 @@ internal PSSession GetWindowsPowerShellCompatRemotingSession()
             return result;
         }
 
-        internal PSSession CreateWindowsPowerShellCompatResources()
+        internal static PSSession CreateWindowsPowerShellCompatResources()
         {
             PSSession compatSession = null;
             lock (s_WindowsPowerShellCompatSyncObject)
@@ -4832,13 +4832,18 @@ internal PSSession CreateWindowsPowerShellCompatResources()
             return compatSession;
         }
 
-        internal void CleanupWindowsPowerShellCompatResources()
+        internal static void CleanupWindowsPowerShellCompatResources(SessionState sessionState)
         {
             lock (s_WindowsPowerShellCompatSyncObject)
             {
                 var compatSession = GetWindowsPowerShellCompatRemotingSession();
                 if (compatSession != null)
                 {
+                    if (sessionState?.InvokeCommand.LocationChangedAction != null)
+                    {
+                        sessionState.InvokeCommand.LocationChangedAction -= SyncCurrentLocationDelegate;
+                    }
+
                     var commandInfo = new CmdletInfo("Remove-PSSession", typeof(RemovePSSessionCommand));
                     using var ps = System.Management.Automation.PowerShell.Create(RunspaceMode.CurrentRunspace);
                     ps.AddCommand(commandInfo);
@@ -4848,6 +4853,21 @@ internal void CleanupWindowsPowerShellCompatResources()
             }
         }
 
+        internal static void SyncCurrentLocationHandler(object sender, LocationChangedEventArgs args)
+        {
+            PSSession compatSession = GetWindowsPowerShellCompatRemotingSession();
+            if (compatSession?.Runspace.RunspaceStateInfo.State == RunspaceState.Opened)
+            {
+                using var ps = System.Management.Automation.PowerShell.Create(RunspaceMode.CurrentRunspace);
+                ps.AddCommand(new CmdletInfo("Invoke-Command", typeof(InvokeCommandCommand)));
+                ps.AddParameter("Session", compatSession);
+                ps.AddParameter("ScriptBlock", ScriptBlock.Create(string.Format("Set-Location -Path '{0}'", args.NewPath.Path)));
+                ps.Invoke();
+            }
+        }
+
+        internal static System.EventHandler<LocationChangedEventArgs> SyncCurrentLocationDelegate;
+
         internal virtual IList<PSModuleInfo> ImportModulesUsingWinCompat(IEnumerable<string> moduleNames, IEnumerable<ModuleSpecification> moduleFullyQualifiedNames, ImportModuleOptions importModuleOptions) { throw new System.NotImplementedException(); }
 
         private void RemoveTypesAndFormatting(
@@ -4944,7 +4964,7 @@ internal void RemoveModule(PSModuleInfo module, string moduleNameInRemoveModuleC
 
                     if (module.IsWindowsPowerShellCompatModule && (System.Threading.Interlocked.Decrement(ref s_WindowsPowerShellCompatUsageCounter) == 0))
                     {
-                        CleanupWindowsPowerShellCompatResources();
+                        CleanupWindowsPowerShellCompatResources(this.SessionState);
                     }
 
                     // First remove cmdlets from the session state
diff --git a/test/powershell/Modules/Microsoft.PowerShell.Core/CompatiblePSEditions.Module.Tests.ps1 b/test/powershell/Modules/Microsoft.PowerShell.Core/CompatiblePSEditions.Module.Tests.ps1
index bbecf39d792..7ae3a77de9d 100644
--- a/test/powershell/Modules/Microsoft.PowerShell.Core/CompatiblePSEditions.Module.Tests.ps1
+++ b/test/powershell/Modules/Microsoft.PowerShell.Core/CompatiblePSEditions.Module.Tests.ps1
@@ -327,6 +327,34 @@ Describe "Import-Module from CompatiblePSEditions-checked paths" -Tag "CI" {
                 [System.Management.Automation.Internal.InternalTestHooks]::SetTestHook("TestWindowsPowerShellVersionString", $null)
             }
         }
+
+        It "Current location in Windows PS mirrors local current location" -TestCases $failCases -Skip:(-not $IsWindows) {
+            param($Editions, $ModuleName, $Result)
+            $pwdBackup = $PWD
+            $location = Join-Path $TestDrive "Custom dir" (New-Guid).ToString()
+            $null = New-Item -Path $location -ItemType Directory
+            Push-Location -Path $location
+            try
+            {
+                # right after module import remote $PWD should be synchronized
+                Import-Module $ModuleName -UseWindowsPowerShell
+                $s = Get-PSSession -Name WinPSCompatSession
+                (Invoke-Command -Session $s {Get-Location}).Path | Should -BeExactly $PWD.Path
+
+                # after local $PWD changes remote $PWD should be synchronized
+                Set-Location -Path ..
+                (Invoke-Command -Session $s {Get-Location}).Path | Should -BeExactly $PWD.Path
+
+                # after WinCompat cleanup local $PWD changes should not cause errors
+                Remove-module $ModuleName -Force
+
+                Pop-Location
+            }
+            finally
+            {
+                Set-Location $pwdBackup
+            }
+        }
     }
 
     Context "Imports from absolute path" {