diff --git a/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs b/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs
index 7c5857db3a3..a71f93519c5 100644
--- a/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs
+++ b/src/System.Management.Automation/engine/Modules/ModuleCmdletBase.cs
@@ -613,19 +613,18 @@ private PSModuleInfo LoadModuleNamedInManifest(PSModuleInfo parentModule, Module
             Guid? savedBaseGuid = BaseGuid;
 
             var importingModule = 0 != (manifestProcessingFlags & ManifestProcessingFlags.LoadElements);
-
+            string extension = Path.GetExtension(moduleSpecification.Name);
             // First check for fully-qualified paths - either absolute or relative
             string rootedPath = ResolveRootedFilePath(moduleSpecification.Name, this.Context);
             if (String.IsNullOrEmpty(rootedPath))
             {
-                rootedPath = Path.Combine(moduleBase, moduleSpecification.Name);
+                rootedPath = FixupFileName(moduleBase, moduleSpecification.Name, extension);
             }
             else
             {
                 wasRooted = true;
             }
 
-            string extension = Path.GetExtension(moduleSpecification.Name);
             try
             {
                 this.Context.Modules.IncrementModuleNestingDepth(this, rootedPath);
diff --git a/test/powershell/engine/Module/SubmodulePathInManifest.Tests.ps1 b/test/powershell/engine/Module/SubmodulePathInManifest.Tests.ps1
new file mode 100644
index 00000000000..25c14a41730
--- /dev/null
+++ b/test/powershell/engine/Module/SubmodulePathInManifest.Tests.ps1
@@ -0,0 +1,54 @@
+Describe "Tests for paths of submodules in module manifest" -tags "CI" {
+
+    $moduleName = 'ModuleA'
+    $moduleFileName = "$moduleName.psd1"
+    $submoduleName = 'ModuleB'
+    $submoduleFileName = "$submoduleName.psm1"
+    $moduleRootPath = Join-Path $TestDrive $moduleName
+    $moduleFilePath = Join-Path $moduleRootPath $moduleFileName
+    $nestedModulePath = Join-Path $moduleRootPath $submoduleName
+    $nestedModuleFilePath = Join-Path $nestedModulePath $submoduleFileName
+
+    BeforeEach {
+        
+        Remove-Module $moduleName -Force -ErrorAction SilentlyContinue
+        Remove-Item $moduleRootPath -Recurse -Force -ErrorAction SilentlyContinue
+        
+        New-Item -ItemType Directory -Force -Path  $nestedModulePath
+        "function TestModuleFunction{'Hello from TestModuleFunction'}" | Out-File $nestedModuleFilePath
+    }
+
+    $testCases = @(
+        @{ SubModulePath = "$submoduleName" }
+        @{ SubModulePath = "$submoduleName\$submoduleName" }
+        @{ SubModulePath = "$submoduleName/$submoduleName" }
+        @{ SubModulePath = "$submoduleName\$submoduleFileName" }
+        @{ SubModulePath = "$submoduleName/$submoduleFileName" }
+        @{ SubModulePath = ".\$submoduleName" }
+        @{ SubModulePath = ".\$submoduleName\$submoduleName" }
+        @{ SubModulePath = ".\$submoduleName/$submoduleName" }
+        @{ SubModulePath = ".\$submoduleName\$submoduleFileName" }
+        @{ SubModulePath = ".\$submoduleName/$submoduleFileName" }
+        @{ SubModulePath = "./$submoduleName" }
+        @{ SubModulePath = "./$submoduleName/$submoduleName" }
+        @{ SubModulePath = "./$submoduleName\$submoduleName" }
+        @{ SubModulePath = "./$submoduleName/$submoduleFileName" }
+        @{ SubModulePath = "./$submoduleName\$submoduleFileName" }
+    )
+
+    It "Test if NestedModule path is <SubModulePath>" -TestCases $testCases {
+        param($SubModulePath)
+    
+        New-ModuleManifest $moduleFilePath -NestedModules @($SubModulePath)
+        Import-Module $moduleFilePath
+        (Get-Module $moduleName).ExportedCommands.Keys.Contains('TestModuleFunction') | Should Be $true
+    }
+
+    It "Test if RootModule path is <SubModulePath>" -TestCases $testCases {
+        param($SubModulePath)
+    
+        New-ModuleManifest $moduleFilePath -RootModule $SubModulePath
+        Import-Module $moduleFilePath
+        (Get-Module $moduleName).ExportedCommands.Keys.Contains('TestModuleFunction') | Should Be $true
+    }
+}