diff --git a/crates/uv-interpreter/src/discovery.rs b/crates/uv-interpreter/src/discovery.rs
index 05c9b16f8..e5f022176 100644
--- a/crates/uv-interpreter/src/discovery.rs
+++ b/crates/uv-interpreter/src/discovery.rs
@@ -11,7 +11,8 @@ use crate::interpreter::Error as InterpreterError;
 use crate::managed::toolchains_for_current_platform;
 use crate::py_launcher::py_list_paths;
 use crate::virtualenv::{
-    virtualenv_from_env, virtualenv_from_working_dir, virtualenv_python_executable,
+    conda_prefix_from_env, virtualenv_from_env, virtualenv_from_working_dir,
+    virtualenv_python_executable,
 };
 use crate::{Interpreter, PythonVersion};
 use std::borrow::Cow;
@@ -125,6 +126,8 @@ pub enum InterpreterSource {
     ProvidedPath,
     /// An environment was active e.g. via `VIRTUAL_ENV`
     ActiveEnvironment,
+    /// A conda environment was active e.g. via `CONDA_PREFIX`
+    CondaPrefix,
     /// An environment was discovered e.g. via `.venv`
     DiscoveredEnvironment,
     /// An executable was found in the search path i.e. `PATH`
@@ -195,7 +198,7 @@ fn python_executables<'a>(
         .into_iter()
         .map(|path| Ok((InterpreterSource::ParentInterpreter, PathBuf::from(path))))
     ).into_iter().flatten()
-    // (2) The active environment
+    // (2) An active virtual environment
     .chain(
         sources.contains(InterpreterSource::ActiveEnvironment).then(||
             virtualenv_from_env()
@@ -204,7 +207,16 @@ fn python_executables<'a>(
             .map(|path| Ok((InterpreterSource::ActiveEnvironment, path)))
         ).into_iter().flatten()
     )
-    // (3) A discovered environment
+    // (3) An active conda environment
+    .chain(
+        sources.contains(InterpreterSource::CondaPrefix).then(||
+            conda_prefix_from_env()
+            .into_iter()
+            .map(virtualenv_python_executable)
+            .map(|path| Ok((InterpreterSource::CondaPrefix, path)))
+        ).into_iter().flatten()
+    )
+    // (4) A discovered environment
     .chain(
         sources.contains(InterpreterSource::DiscoveredEnvironment).then(||
             std::iter::once(
@@ -219,7 +231,7 @@ fn python_executables<'a>(
             ).flatten_ok()
         ).into_iter().flatten()
     )
-    // (4) Managed toolchains
+    // (5) Managed toolchains
     .chain(
         sources.contains(InterpreterSource::ManagedToolchain).then(move ||
             std::iter::once(
@@ -237,14 +249,14 @@ fn python_executables<'a>(
             ).flatten_ok()
         ).into_iter().flatten()
     )
-    // (5) The search path
+    // (6) The search path
     .chain(
         sources.contains(InterpreterSource::SearchPath).then(move ||
             python_executables_from_search_path(version, implementation)
             .map(|path| Ok((InterpreterSource::SearchPath, path))),
         ).into_iter().flatten()
     )
-    // (6) The `py` launcher (windows only)
+    // (7) The `py` launcher (windows only)
     // TODO(konstin): Implement <https://peps.python.org/pep-0514/> to read python installations from the registry instead.
     .chain(
         (sources.contains(InterpreterSource::PyLauncher) && cfg!(windows)).then(||
@@ -362,7 +374,11 @@ fn python_interpreters<'a>(
         })
         .filter(move |result| match result {
             // Filter the returned interpreters to conform to the system request
-            Ok((source, interpreter)) => match (system, interpreter.is_virtualenv()) {
+            Ok((source, interpreter)) => match (
+                system,
+                // Conda environments are not conformant virtual environments but we should not treat them as system interpreters
+                interpreter.is_virtualenv() || matches!(source, InterpreterSource::CondaPrefix),
+            ) {
                 (SystemPython::Allowed, _) => true,
                 (SystemPython::Explicit, false) => {
                     if matches!(
@@ -1100,6 +1116,7 @@ impl SourceSelector {
             Self::VirtualEnv => [
                 InterpreterSource::DiscoveredEnvironment,
                 InterpreterSource::ActiveEnvironment,
+                InterpreterSource::CondaPrefix,
             ]
             .contains(&source),
             Self::Custom(sources) => sources.contains(&source),
@@ -1163,6 +1180,7 @@ impl fmt::Display for InterpreterSource {
         match self {
             Self::ProvidedPath => f.write_str("provided path"),
             Self::ActiveEnvironment => f.write_str("active virtual environment"),
+            Self::CondaPrefix => f.write_str("conda prefix"),
             Self::DiscoveredEnvironment => f.write_str("virtual environment"),
             Self::SearchPath => f.write_str("search path"),
             Self::PyLauncher => f.write_str("`py` launcher output"),
diff --git a/crates/uv-interpreter/src/environment.rs b/crates/uv-interpreter/src/environment.rs
index 65abab115..95edfe4e5 100644
--- a/crates/uv-interpreter/src/environment.rs
+++ b/crates/uv-interpreter/src/environment.rs
@@ -50,13 +50,16 @@ impl PythonEnvironment {
     }
 
     /// Create a [`PythonEnvironment`] for an existing virtual environment.
+    ///
+    /// Allows Conda environments (via `CONDA_PREFIX`) though they are not technically virtual environments.
     pub fn from_virtualenv(cache: &Cache) -> Result<Self, Error> {
         let sources = SourceSelector::VirtualEnv;
         let request = InterpreterRequest::Version(VersionRequest::Default);
         let found = find_interpreter(&request, SystemPython::Disallowed, &sources, cache)??;
 
         debug_assert!(
-            found.interpreter().is_virtualenv(),
+            found.interpreter().is_virtualenv()
+                || matches!(found.source(), InterpreterSource::CondaPrefix),
             "Not a virtualenv (source: {}, prefix: {})",
             found.source(),
             found.interpreter().base_prefix().display()
diff --git a/crates/uv-interpreter/src/lib.rs b/crates/uv-interpreter/src/lib.rs
index 51397ddd1..7325b4996 100644
--- a/crates/uv-interpreter/src/lib.rs
+++ b/crates/uv-interpreter/src/lib.rs
@@ -262,6 +262,29 @@ mod tests {
         Ok(venv.to_path_buf())
     }
 
+    /// Create a mock conda prefix in the given directory.
+    ///
+    /// These are like virtual environments but they look like system interpreters because `prefix` and `base_prefix` are equal.
+    ///
+    /// Returns the path to the environment.
+    fn mock_conda_prefix(tempdir: &TempDir, version: &'static str) -> Result<PathBuf> {
+        let env = tempdir.child("conda");
+        let executable = virtualenv_python_executable(&env);
+        fs_err::create_dir_all(
+            executable
+                .parent()
+                .expect("A Python executable path should always have a parent"),
+        )?;
+        create_mock_interpreter(
+            &executable,
+            &PythonVersion::from_str(version).expect("A valid Python version is used for tests"),
+            ImplementationName::default(),
+            true,
+        )?;
+        env.child("pyvenv.cfg").touch()?;
+        Ok(env.to_path_buf())
+    }
+
     #[test]
     fn find_default_interpreter_empty_path() -> Result<()> {
         let cache = Cache::temp()?;
@@ -1308,6 +1331,74 @@ mod tests {
         Ok(())
     }
 
+    #[test]
+    fn find_environment_from_conda_prefix() -> Result<()> {
+        let tempdir = TempDir::new()?;
+        let cache = Cache::temp()?;
+        let conda_prefix = mock_conda_prefix(&tempdir, "3.12.0")?;
+
+        with_vars(
+            [
+                ("UV_TEST_PYTHON_PATH", None),
+                ("UV_BOOTSTRAP_DIR", None),
+                (
+                    "PATH",
+                    Some(simple_mock_interpreters(&tempdir, &["3.10.1", "3.11.2"])?),
+                ),
+                ("CONDA_PREFIX", Some(conda_prefix.into())),
+                ("PWD", Some(tempdir.path().into())),
+            ],
+            || {
+                let environment =
+                    // Note this environment is not treated as a system interpreter
+                    PythonEnvironment::find(None, SystemPython::Disallowed, &cache)
+                        .expect("An environment is found");
+                assert_eq!(
+                    environment.interpreter().python_full_version().to_string(),
+                    "3.12.0",
+                    "We should allow the conda environment"
+                );
+            },
+        );
+
+        Ok(())
+    }
+
+    #[test]
+    fn find_environment_from_conda_prefix_and_virtualenv() -> Result<()> {
+        let tempdir = TempDir::new()?;
+        let cache = Cache::temp()?;
+        let generic = mock_venv(&tempdir, "3.12.0")?;
+        let conda = mock_conda_prefix(&tempdir, "3.12.1")?;
+
+        with_vars(
+            [
+                ("UV_TEST_PYTHON_PATH", None),
+                ("UV_BOOTSTRAP_DIR", None),
+                (
+                    "PATH",
+                    Some(simple_mock_interpreters(&tempdir, &["3.10.2", "3.11.3"])?),
+                ),
+                ("CONDA_PREFIX", Some(conda.into())),
+                ("VIRTUAL_ENV", Some(generic.into())),
+                ("PWD", Some(tempdir.path().into())),
+            ],
+            || {
+                let environment =
+                    // Note this environment is not treated as a system interpreter
+                    PythonEnvironment::find(None, SystemPython::Disallowed, &cache)
+                        .expect("An environment is found");
+                assert_eq!(
+                    environment.interpreter().python_full_version().to_string(),
+                    "3.12.0",
+                    "We should prefer the active environment"
+                );
+            },
+        );
+
+        Ok(())
+    }
+
     #[test]
     fn find_environment_from_discovered_environment() -> Result<()> {
         let tempdir = TempDir::new()?;
diff --git a/crates/uv-interpreter/src/virtualenv.rs b/crates/uv-interpreter/src/virtualenv.rs
index f34bb0b09..8a0824c3c 100644
--- a/crates/uv-interpreter/src/virtualenv.rs
+++ b/crates/uv-interpreter/src/virtualenv.rs
@@ -43,7 +43,7 @@ pub enum Error {
 
 /// Locate an active virtual environment by inspecting environment variables.
 ///
-/// Supports `VIRTUAL_ENV` and `CONDA_PREFIX`.
+/// Supports `VIRTUAL_ENV`.
 pub(crate) fn virtualenv_from_env() -> Option<PathBuf> {
     if let Some(dir) = env::var_os("VIRTUAL_ENV").filter(|value| !value.is_empty()) {
         info!(
@@ -53,6 +53,13 @@ pub(crate) fn virtualenv_from_env() -> Option<PathBuf> {
         return Some(PathBuf::from(dir));
     }
 
+    None
+}
+
+/// Locate an active conda environment by inspecting environment variables.
+///
+/// Supports `CONDA_PREFIX`.
+pub(crate) fn conda_prefix_from_env() -> Option<PathBuf> {
     if let Some(dir) = env::var_os("CONDA_PREFIX").filter(|value| !value.is_empty()) {
         info!(
             "Found active virtual environment (via CONDA_PREFIX) at: {}",