diff --git a/tests/functional/flakes/search-root.sh b/tests/functional/flakes/search-root.sh
deleted file mode 100644
index d8586dc8a..000000000
--- a/tests/functional/flakes/search-root.sh
+++ /dev/null
@@ -1,50 +0,0 @@
-source common.sh
-
-clearStore
-
-writeSimpleFlake $TEST_HOME
-cd $TEST_HOME
-mkdir -p foo/subdir
-
-echo '{ outputs = _: {}; }' > foo/flake.nix
-cat <<EOF > flake.nix
-{
-    inputs.foo.url = "$PWD/foo";
-    outputs = a: {
-       packages.$system = rec {
-         test = import ./simple.nix;
-         default = test;
-       };
-    };
-}
-EOF
-mkdir subdir
-pushd subdir
-
-success=("" . .# .#test ../subdir ../subdir#test "$PWD")
-failure=("path:$PWD")
-
-for i in "${success[@]}"; do
-    nix build $i || fail "flake should be found by searching up directories"
-done
-
-for i in "${failure[@]}"; do
-    ! nix build $i || fail "flake should not search up directories when using 'path:'"
-done
-
-popd
-
-nix build --override-input foo . || fail "flake should search up directories when not an installable"
-
-sed "s,$PWD/foo,$PWD/foo/subdir,g" -i flake.nix
-! nix build || fail "flake should not search upwards when part of inputs"
-
-if [[ -n $(type -p git) ]]; then
-    pushd subdir
-    git init
-    for i in "${success[@]}" "${failure[@]}"; do
-        ! nix build $i || fail "flake should not search past a git repository"
-    done
-    rm -rf .git
-    popd
-fi
diff --git a/tests/functional/meson.build b/tests/functional/meson.build
index aefa18ac7..dee9ae40f 100644
--- a/tests/functional/meson.build
+++ b/tests/functional/meson.build
@@ -89,7 +89,6 @@ functional_tests_scripts = [
   'secure-drv-outputs.sh',
   'restricted.sh',
   'fetchGitSubmodules.sh',
-  'flakes/search-root.sh',
   'readfile-context.sh',
   'nix-channel.sh',
   'dependencies.sh',
diff --git a/tests/functional2/flakes/test_search_path.py b/tests/functional2/flakes/test_search_path.py
new file mode 100644
index 000000000..1ea25d391
--- /dev/null
+++ b/tests/functional2/flakes/test_search_path.py
@@ -0,0 +1,89 @@
+from testlib.fixtures.nix import Nix
+from testlib.fixtures.git import Git
+from testlib.fixtures.file_helper import with_files, File
+from testlib.environ import environ
+from pathlib import Path
+import pytest
+from .common import simple_flake
+
+system = environ.get("system")
+
+files = simple_flake() | {"foo": {"flake.nix": File("{ outputs = _: {}; }")}, "subdir": {}}
+
+
+@pytest.fixture(autouse=True)
+def common_init(nix: Nix, files: Path):
+    nix.settings.add_xp_feature("nix-command", "flakes")
+
+    flake = files / "flake.nix"
+    flake.write_text(f"""
+        {{
+            inputs.foo.url = "{files}/foo";
+            outputs = a: {{
+               packages.{system} = rec {{
+                 test = import ./simple.nix;
+                 default = test;
+               }};
+            }};
+        }}
+    """)
+
+
+good_uris: list[list[str]] = [
+    [],
+    ["."],
+    [".#"],
+    [".#test"],
+    ["../subdir"],
+    ["../subdir#test"],
+    ["$PWD"],
+]
+
+
+@with_files(files)
+class TestFlakeSearchPath:
+    @pytest.mark.parametrize("args", good_uris)
+    def test_flake_search_goes_up(self, nix: Nix, files: Path, args: list[str]):
+        subdir = files / "subdir"
+        nix.nix(
+            ["build", *[arg.replace("$PWD", str(subdir)) for arg in args]], cwd=subdir
+        ).run().ok()
+
+    def test_flake_search_inactive_with_path_uri(self, nix: Nix, files: Path):
+        subdir = files / "subdir"
+        assert (
+            "does not contain a '/flake.nix' file"
+            in nix.nix(["build", f"path:{subdir}"], cwd=subdir).run().expect(1).stderr_s
+        )
+
+    def test_flake_search_goes_up_without_installable(self, nix: Nix):
+        nix.nix(["build", "--override-input", "foo", "."]).run().ok()
+
+    def test_flake_inputs_do_not_search(self, nix: Nix, files: Path):
+        flake = files / "flake.nix"
+        flake.write_text(flake.read_text().replace(str(files / "foo"), str(files / "foo/subdir")))
+        nix.nix(["build"]).run().expect(1)
+
+    @pytest.mark.parametrize("args", good_uris)
+    def test_flake_search_does_not_cross_git_repo(
+        self, git: Git, nix: Nix, files: Path, args: list[str]
+    ):
+        subdir = files / "subdir"
+        git(subdir, "init")
+        assert (
+            "is not part of a flake"
+            in nix.nix(["build", *[arg.replace("$PWD", str(subdir)) for arg in args]], cwd=subdir)
+            .run()
+            .expect(1)
+            .stderr_s
+        )
+
+    def test_flake_search_does_not_cross_git_repo_with_path_ru(
+        self, git: Git, nix: Nix, files: Path
+    ):
+        subdir = files / "subdir"
+        git(subdir, "init")
+        assert (
+            "does not contain a '/flake.nix' file"
+            in nix.nix(["build", f"path:{subdir}"], cwd=subdir).run().expect(1).stderr_s
+        )
diff --git a/tests/functional2/testlib/fixtures/nix.py b/tests/functional2/testlib/fixtures/nix.py
index 8bfe58791..bebe0bd52 100644
--- a/tests/functional2/testlib/fixtures/nix.py
+++ b/tests/functional2/testlib/fixtures/nix.py
@@ -155,7 +155,7 @@ class Nix:
 
         return self._settings
 
-    def nix_cmd(self, argv: list[str], flake: bool = False) -> Command:
+    def nix_cmd(self, argv: list[str], flake: bool = False, cwd: Path | None = None) -> Command:
         """
         Constructs a NixCommand with the appropriate settings.
         :param build: if the executed command wants to build stuff. This is required due to darwin shenanigans. "auto" will try to autodetect, override using `True` or `False`. Has no effect on linux.
@@ -166,10 +166,12 @@ class Nix:
             settings.add_xp_feature("nix-command", "flakes")
 
         settings.to_env_overlay(self.env)
-        return Command(argv=argv, exe=self._nix_executable, _env=self.env)
+        return Command(argv=argv, exe=self._nix_executable, _env=self.env, cwd=cwd)
 
-    def nix(self, cmd: list[str], nix_exe: str = "nix", flake: bool = False) -> Command:
-        return self.nix_cmd([nix_exe, *cmd], flake=flake)
+    def nix(
+        self, cmd: list[str], nix_exe: str = "nix", flake: bool = False, cwd: Path | None = None
+    ) -> Command:
+        return self.nix_cmd([nix_exe, *cmd], flake=flake, cwd=cwd)
 
     @contextlib.contextmanager
     def daemon(