diff --git a/isort/main.py b/isort/main.py
index 5a6447d3..db5ebfe5 100644
--- a/isort/main.py
+++ b/isort/main.py
@@ -1117,9 +1117,8 @@ def main(argv: Optional[Sequence[str]] = None, stdin: Optional[TextIOWrapper] =
         config_trie = find_all_configs(config_dict.pop("config_root", "."))
 
     if "src_paths" in config_dict:
-        config_dict["src_paths"] = {
-            Path(src_path).resolve() for src_path in config_dict.get("src_paths", ())
-        }
+        config_dict["src_paths"] = set(config_dict.get("src_paths", ()))
+        config_dict.setdefault("directory", os.getcwd())
 
     config = Config(**config_dict)
     if show_config:
diff --git a/isort/settings.py b/isort/settings.py
index b8281a41..71d912cb 100644
--- a/isort/settings.py
+++ b/isort/settings.py
@@ -458,9 +458,8 @@ def __init__(
 
         path_root = Path(combined_config.get("directory", project_root)).resolve()
         path_root = path_root if path_root.is_dir() else path_root.parent
-        if "src_paths" not in combined_config:
-            combined_config["src_paths"] = (path_root / "src", path_root)
-        else:
+
+        if "src_paths" in combined_config:
             src_paths: List[Path] = []
             for src_path in combined_config.get("src_paths", ()):
                 full_paths = (
@@ -471,6 +470,8 @@ def __init__(
                         src_paths.append(path)
 
             combined_config["src_paths"] = tuple(src_paths)
+        else:
+            combined_config["src_paths"] = (path_root / "src", path_root)
 
         if "formatter" in combined_config:
             import pkg_resources
diff --git a/tests/unit/test_regressions.py b/tests/unit/test_regressions.py
index 4180f81c..330fc4a4 100644
--- a/tests/unit/test_regressions.py
+++ b/tests/unit/test_regressions.py
@@ -1,10 +1,11 @@
 """A growing set of tests designed to ensure isort doesn't have regressions in new versions"""
 
+import os
 from io import StringIO
 
-import pytest
-
 import isort
+import isort.main
+import pytest
 
 
 def test_isort_duplicating_comments_issue_1264():
@@ -1900,3 +1901,31 @@ def test_isort_should_produce_the_same_code_on_subsequent_runs_issue_1799(tmpdir
     assert isort.code(code, config=settings) == isort.code(
         isort.code(code, config=settings), config=settings
     )
+
+
+def test_isort_should_include_all_src_paths_in_config_issue_2001(tmp_path):
+    code = """import external
+import local
+"""
+
+    sorted_code = """import external
+
+import local
+"""
+
+    # "src" is used by default, so it needs a different name
+    src_dir = tmp_path.joinpath("code")
+    src_dir.mkdir()
+
+    src_file = src_dir.joinpath("needs_changes.py")
+    src_file.write_text(code)
+    local_module = src_dir.joinpath("local.py")
+    local_module.write_text("# Comment")
+
+    # Necessary to test CLI behavior, only affects this test
+    os.chdir(tmp_path)
+
+    isort.main.main(["."])
+    assert src_file.read_text() == code
+    isort.main.main(["--src", src_dir.name, "."])
+    assert src_file.read_text() == sorted_code