diff --git a/ports/esp32/main.c b/ports/esp32/main.c
index ca0ab1488a125..3444be8922c16 100644
--- a/ports/esp32/main.c
+++ b/ports/esp32/main.c
@@ -143,6 +143,9 @@ void mp_task(void *pvParameter) {
     mp_obj_list_init(mp_sys_path, 0);
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR_));
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__slash_lib));
+    #if MICROPY_MODULE_FROZEN
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
     mp_obj_list_init(mp_sys_argv, 0);
     readline_init0();
 
diff --git a/ports/esp8266/main.c b/ports/esp8266/main.c
index 404188346cc00..c51e4f77fef0d 100644
--- a/ports/esp8266/main.c
+++ b/ports/esp8266/main.c
@@ -56,6 +56,9 @@ STATIC void mp_reset(void) {
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR_)); // current dir (or base dir of the script)
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__slash_lib));
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__slash_));
+    #if MICROPY_MODULE_FROZEN
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
     mp_obj_list_init(mp_sys_argv, 0);
     #if MICROPY_EMIT_XTENSA || MICROPY_EMIT_INLINE_XTENSA
     extern void esp_native_code_init(void);
diff --git a/ports/mimxrt/main.c b/ports/mimxrt/main.c
index fa6237ca0750c..4b002be9a87ee 100644
--- a/ports/mimxrt/main.c
+++ b/ports/mimxrt/main.c
@@ -77,6 +77,9 @@ int main(void) {
 
         mp_obj_list_init(MP_OBJ_TO_PTR(mp_sys_path), 0);
         mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR_));
+        #if MICROPY_MODULE_FROZEN
+        mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+        #endif
         mp_obj_list_init(MP_OBJ_TO_PTR(mp_sys_argv), 0);
         #if MICROPY_PY_NETWORK
         mod_network_init();
diff --git a/ports/nrf/main.c b/ports/nrf/main.c
index 254d9491c086f..d041428d101a3 100644
--- a/ports/nrf/main.c
+++ b/ports/nrf/main.c
@@ -252,6 +252,11 @@ int main(int argc, char **argv) {
     }
     #endif
 
+    #if MICROPY_MODULE_FROZEN
+    // add frozen virtual directory to path
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
+
     // Main script is finished, so now go into REPL mode.
     // The REPL mode can change, or it can request a soft reset.
     int ret_code = 0;
diff --git a/ports/rp2/main.c b/ports/rp2/main.c
index 793444c9a92cf..954c94fe41dc9 100644
--- a/ports/rp2/main.c
+++ b/ports/rp2/main.c
@@ -103,6 +103,9 @@ int main(int argc, char **argv) {
         mp_obj_list_init(MP_OBJ_TO_PTR(mp_sys_path), 0);
         mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR_));
         mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__slash_lib));
+        #if MICROPY_MODULE_FROZEN
+        mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+        #endif
         mp_obj_list_init(MP_OBJ_TO_PTR(mp_sys_argv), 0);
 
         // Initialise sub-systems.
diff --git a/ports/stm32/main.c b/ports/stm32/main.c
index 5d1ff2dcf5aad..9ed91e1fde372 100644
--- a/ports/stm32/main.c
+++ b/ports/stm32/main.c
@@ -561,6 +561,11 @@ void stm32_main(uint32_t reset_mode) {
         mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__slash_flash_slash_lib));
     }
 
+    #if MICROPY_MODULE_FROZEN
+    // add frozen virtual directory to path
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
+
     // reset config variables; they should be set by boot.py
     MP_STATE_PORT(pyb_config_main) = MP_OBJ_NULL;
 
diff --git a/ports/teensy/main.c b/ports/teensy/main.c
index 6ebdcde21cbe7..c69de9624555e 100644
--- a/ports/teensy/main.c
+++ b/ports/teensy/main.c
@@ -271,6 +271,9 @@ int main(void) {
     mp_init();
     mp_obj_list_init(mp_sys_path, 0);
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR_)); // current dir (or base dir of the script)
+    #if MICROPY_MODULE_FROZEN
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
     mp_obj_list_init(mp_sys_argv, 0);
 
     readline_init0();
diff --git a/ports/unix/main.c b/ports/unix/main.c
index 031bdd75d106e..b7669a171cd6f 100644
--- a/ports/unix/main.c
+++ b/ports/unix/main.c
@@ -498,7 +498,7 @@ MP_NOINLINE int main_(int argc, char **argv) {
         #ifdef MICROPY_PY_SYS_PATH_DEFAULT
         path = MICROPY_PY_SYS_PATH_DEFAULT;
         #else
-        path = "~/.micropython/lib:/usr/lib/micropython";
+        path = "~/.micropython/lib:/usr/lib/micropython:|frozen";
         #endif
     }
     size_t path_num = 1; // [0] is for current dir (or base dir of the script)
diff --git a/ports/windows/mpconfigport.h b/ports/windows/mpconfigport.h
index 8dd95e769d453..08225384e0eb3 100644
--- a/ports/windows/mpconfigport.h
+++ b/ports/windows/mpconfigport.h
@@ -88,7 +88,7 @@
 #define MICROPY_PY_SYS_ATEXIT       (1)
 #define MICROPY_PY_SYS_PLATFORM     "win32"
 #ifndef MICROPY_PY_SYS_PATH_DEFAULT
-#define MICROPY_PY_SYS_PATH_DEFAULT "~/.micropython/lib"
+#define MICROPY_PY_SYS_PATH_DEFAULT "~/.micropython/lib;|frozen"
 #endif
 #define MICROPY_PY_SYS_MAXSIZE      (1)
 #define MICROPY_PY_SYS_STDFILES     (1)
diff --git a/ports/zephyr/main.c b/ports/zephyr/main.c
index 63190bd5edd67..ae7a3088d61cc 100644
--- a/ports/zephyr/main.c
+++ b/ports/zephyr/main.c
@@ -141,6 +141,9 @@ int real_main(void) {
     mp_init();
     mp_obj_list_init(mp_sys_path, 0);
     mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR_)); // current dir (or base dir of the script)
+    #if MICROPY_MODULE_FROZEN
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
     mp_obj_list_init(mp_sys_argv, 0);
 
     #ifdef CONFIG_USB
diff --git a/py/builtinimport.c b/py/builtinimport.c
index 08921f873b803..53b1f1084d635 100644
--- a/py/builtinimport.c
+++ b/py/builtinimport.c
@@ -47,6 +47,7 @@
 #if MICROPY_ENABLE_EXTERNAL_IMPORT
 
 #define PATH_SEP_CHAR '/'
+#define PATH_FROZEN "|frozen/"
 
 bool mp_obj_is_package(mp_obj_t module) {
     mp_obj_t dest[2];
@@ -58,9 +59,11 @@ bool mp_obj_is_package(mp_obj_t module) {
 // (whatever is available, if at all).
 STATIC mp_import_stat_t mp_import_stat_any(const char *path) {
     #if MICROPY_MODULE_FROZEN
-    mp_import_stat_t st = mp_frozen_stat(path);
-    if (st != MP_IMPORT_STAT_NO_EXIST) {
-        return st;
+    if (strncmp(path, PATH_FROZEN, strlen(PATH_FROZEN)) == 0) {
+        mp_import_stat_t st = mp_frozen_stat(path + strlen(PATH_FROZEN));
+        if (st != MP_IMPORT_STAT_NO_EXIST) {
+            return st;
+        }
     }
     #endif
     return mp_import_stat(path);
@@ -188,13 +191,17 @@ STATIC void do_load(mp_obj_t module_obj, vstr_t *file) {
     // requested filename in the list of frozen module filenames.
     #if MICROPY_MODULE_FROZEN
     void *modref;
-    int frozen_type = mp_find_frozen_module(file_str, file->len, &modref);
+    int frozen_type = MP_FROZEN_NONE;
+    if (strncmp(file_str, PATH_FROZEN, strlen(PATH_FROZEN)) == 0) {
+        frozen_type = mp_find_frozen_module(file_str + strlen(PATH_FROZEN), file->len - strlen(PATH_FROZEN), &modref);
+    }
     #endif
 
     // If we support frozen str modules and the compiler is enabled, and we
     // found the filename in the list of frozen files, then load and execute it.
     #if MICROPY_MODULE_FROZEN_STR
     if (frozen_type == MP_FROZEN_STR) {
+        ((mp_lexer_t *)modref)->source_name = qstr_from_str(file_str);
         do_load_from_lexer(module_obj, modref);
         return;
     }
diff --git a/py/modio.c b/py/modio.c
index 7f0d13cdfaa0b..f13f21ca41a20 100644
--- a/py/modio.c
+++ b/py/modio.c
@@ -230,8 +230,11 @@ STATIC mp_obj_t resource_stream(mp_obj_t package_in, mp_obj_t path_in) {
     const char *path = mp_obj_str_get_data(path_in, &len);
     vstr_add_strn(&path_buf, path, len);
 
-    len = path_buf.len;
-    const char *data = mp_find_frozen_str(path_buf.buf, &len);
+    const char *data = NULL;
+    if (strncmp(path_buf.buf, "|frozen/", 8) == 0) {
+        len = path_buf.len - 8;
+        data = mp_find_frozen_str(path_buf.buf + 8, &len); // +8 skips |frozen/
+    }
     if (data != NULL) {
         mp_obj_stringio_t *o = m_new_obj(mp_obj_stringio_t);
         o->base.type = &mp_type_bytesio;
diff --git a/py/qstrdefs.h b/py/qstrdefs.h
index 5b4e0dc48e053..2b47c32d809f8 100644
--- a/py/qstrdefs.h
+++ b/py/qstrdefs.h
@@ -47,6 +47,9 @@ Q({:#o})
 Q({:#x})
 #endif
 Q({:#b})
+#if MICROPY_MODULE_FROZEN
+Q(|frozen)
+#endif
 Q( )
 Q(\n)
 Q(maximum recursion depth exceeded)
diff --git a/shared/upytesthelper/upytesthelper.c b/shared/upytesthelper/upytesthelper.c
index 326172be658c0..e129b01e9d15f 100644
--- a/shared/upytesthelper/upytesthelper.c
+++ b/shared/upytesthelper/upytesthelper.c
@@ -94,6 +94,9 @@ void upytest_execute_test(const char *src) {
     gc_init(heap_start, heap_end);
     mp_init();
     mp_obj_list_init(mp_sys_path, 0);
+    #if MICROPY_MODULE_FROZEN
+    mp_obj_list_append(mp_sys_path, MP_OBJ_NEW_QSTR(MP_QSTR__pipe_frozen));
+    #endif
     mp_obj_list_init(mp_sys_argv, 0);
 
     nlr_buf_t nlr;
diff --git a/tests/run-tests.py b/tests/run-tests.py
index a8a31c0ae5c9f..8ec3a6b7c90a1 100755
--- a/tests/run-tests.py
+++ b/tests/run-tests.py
@@ -852,7 +852,7 @@ def main():
 
     if not args.keep_path:
         # clear search path to make sure tests use only builtin modules and those in extmod
-        os.environ["MICROPYPATH"] = os.pathsep + base_path("../extmod")
+        os.environ["MICROPYPATH"] = os.pathsep + base_path("../extmod") + os.pathsep + "|frozen"
 
     try:
         os.makedirs(args.result_dir, exist_ok=True)
diff --git a/tests/unix/extra_coverage.py.exp b/tests/unix/extra_coverage.py.exp
index ea91813fc683f..37e190dd1263c 100644
--- a/tests/unix/extra_coverage.py.exp
+++ b/tests/unix/extra_coverage.py.exp
@@ -162,13 +162,13 @@ cpp None
 5
 (3, 'hellocpp')
 frzstr1
-frzstr1.py
+|frozen/frzstr1.py
 frzmpy1
-frzmpy1.py
+|frozen/frzmpy1.py
 frzstr_pkg1.__init__
-frzstr_pkg1/__init__.py 1
+|frozen/frzstr_pkg1/__init__.py 1
 frzmpy_pkg1.__init__
-frzmpy_pkg1/__init__.py 1
+|frozen/frzmpy_pkg1/__init__.py 1
 frzstr_pkg2.mod
 1
 frzmpy_pkg2.mod