diff --git a/src/LyXRC.cpp b/src/LyXRC.cpp
index 4ba14e6c7f..71f184d69d 100644
--- a/src/LyXRC.cpp
+++ b/src/LyXRC.cpp
@@ -2997,7 +2997,7 @@ void actOnUpdatedPrefs(LyXRC const & lyxrc_orig, LyXRC const & lyxrc_new)
 	case LyXRC::RC_PARAGRAPH_MARKERS:
 	case LyXRC::RC_PATH_PREFIX:
 		if (lyxrc_orig.path_prefix != lyxrc_new.path_prefix) {
-			prependEnvPath("PATH", lyxrc_new.path_prefix);
+			prependEnvPath("PATH", replaceEnvironmentPath(lyxrc_new.path_prefix));
 			// Resets python path
 			support::os::python(true);
 		}
diff --git a/status.23x b/status.23x
index d62a9607b6..08f5fcc124 100644
--- a/status.23x
+++ b/status.23x
@@ -136,6 +136,8 @@ What's new
 
 - Fix handling of labels with change tracking (bug 6563).
 
+- Expand environment variables when modifying the PATH prefix.
+
 
 
 * INTERNALS