diff --git a/src/Agent.Worker/ContainerOperationProvider.cs b/src/Agent.Worker/ContainerOperationProvider.cs
index bddba38ce0..0affe03cab 100644
--- a/src/Agent.Worker/ContainerOperationProvider.cs
+++ b/src/Agent.Worker/ContainerOperationProvider.cs
@@ -177,8 +177,13 @@ public async Task StartContainerAsync(IExecutionContext executionContext, object
                 container.MountVolumes.Add(new MountVolume(HostContext.GetDirectory(WellKnownDirectory.Work), container.TranslateToContainerPath(HostContext.GetDirectory(WellKnownDirectory.Work))));
                 container.MountVolumes.Add(new MountVolume(HostContext.GetDirectory(WellKnownDirectory.Tools), container.TranslateToContainerPath(HostContext.GetDirectory(WellKnownDirectory.Tools))));
 #else
-                string workingDirectory = Path.GetDirectoryName(executionContext.Variables.Get(Constants.Variables.System.DefaultWorkingDirectory).TrimEnd(Path.DirectorySeparatorChar, Path.AltDirectorySeparatorChar));
-                container.MountVolumes.Add(new MountVolume(container.TranslateToHostPath(workingDirectory), workingDirectory));
+                string defaultWorkingDirectory = executionContext.Variables.Get(Constants.Variables.System.DefaultWorkingDirectory);
+                if (!string.IsNullOrEmpty(defaultWorkingDirectory))
+                {
+                    string workingDirectory = Path.GetDirectoryName(defaultWorkingDirectory.TrimEnd(Path.DirectorySeparatorChar, Path.AltDirectorySeparatorChar));
+                    container.MountVolumes.Add(new MountVolume(container.TranslateToHostPath(workingDirectory), workingDirectory));
+                }
+
                 container.MountVolumes.Add(new MountVolume(HostContext.GetDirectory(WellKnownDirectory.Temp), container.TranslateToContainerPath(HostContext.GetDirectory(WellKnownDirectory.Temp))));
                 container.MountVolumes.Add(new MountVolume(HostContext.GetDirectory(WellKnownDirectory.Tools), container.TranslateToContainerPath(HostContext.GetDirectory(WellKnownDirectory.Tools))));
                 container.MountVolumes.Add(new MountVolume(HostContext.GetDirectory(WellKnownDirectory.Tasks), container.TranslateToContainerPath(HostContext.GetDirectory(WellKnownDirectory.Tasks))));
diff --git a/src/Agent.Worker/Handlers/PowerShell3Handler.cs b/src/Agent.Worker/Handlers/PowerShell3Handler.cs
index d0e9640f0c..96767f54f5 100644
--- a/src/Agent.Worker/Handlers/PowerShell3Handler.cs
+++ b/src/Agent.Worker/Handlers/PowerShell3Handler.cs
@@ -60,13 +60,13 @@ public async Task RunAsync()
             // A non-zero exit code indicates infrastructural failure.
             // Task failure should be communicated over STDOUT using ## commands.
             await StepHost.ExecuteAsync(workingDirectory: StepHost.ResolvePathForStepHost(scriptDirectory),
-                                              fileName: powerShellExe,
-                                              arguments: powerShellExeArgs,
-                                              environment: Environment,
-                                              requireExitCodeZero: true,
-                                              outputEncoding: null,
-                                              killProcessOnCancel: false,
-                                              cancellationToken: ExecutionContext.CancellationToken);
+                                        fileName: StepHost.ResolvePathForStepHost(powerShellExe),
+                                        arguments: powerShellExeArgs,
+                                        environment: Environment,
+                                        requireExitCodeZero: true,
+                                        outputEncoding: null,
+                                        killProcessOnCancel: false,
+                                        cancellationToken: ExecutionContext.CancellationToken);
 
         }
 
diff --git a/src/Agent.Worker/Handlers/StepHost.cs b/src/Agent.Worker/Handlers/StepHost.cs
index 52515efeb3..3991463671 100644
--- a/src/Agent.Worker/Handlers/StepHost.cs
+++ b/src/Agent.Worker/Handlers/StepHost.cs
@@ -91,14 +91,13 @@ public string ResolvePathForStepHost(string path)
             // remove double quotes around the path
             path = path.Trim('\"');
 
-            // try to resolve path inside container if the request path is part of the mount volume
-            // otherwise just return the file name and rely on the file is part of the %PATH% inside the container.
 #if OS_WINDOWS
             if (Container.MountVolumes.Exists(x => path.StartsWith(x.SourceVolumePath, StringComparison.OrdinalIgnoreCase)))
 #else
             if (Container.MountVolumes.Exists(x => path.StartsWith(x.SourceVolumePath)))
 #endif
             {
+                // try to resolve path inside container if the request path is part of the mount volume
                 return Container.TranslateToContainerPath(path);
             }
 #if OS_WINDOWS
@@ -107,11 +106,22 @@ public string ResolvePathForStepHost(string path)
             else if (Container.MountVolumes.Exists(x => path.StartsWith(x.TargetVolumePath)))
 #endif
             {
+                // skip container path resolve, since the request path is already a path inside the container
                 return path;
             }
             else
             {
-                return Path.GetFileName(path);
+                var containerPath = Container.TranslateToContainerPath(path);
+                if (!string.Equals(containerPath, path, StringComparison.Ordinal))
+                {
+                    // the request path is not part of the mount volume, but it might match some path in the folder structure. 
+                    return containerPath;
+                }
+                else
+                {
+                    // otherwise just return the file name and rely on the file is part of the %PATH% inside the container.
+                    return Path.GetFileName(path);
+                }
             }
         }