diff --git a/lib/commands/init.js b/lib/commands/init.js
index 4c68210483598..b8ef3e59ccf29 100644
--- a/lib/commands/init.js
+++ b/lib/commands/init.js
@@ -95,7 +95,7 @@ class Init extends BaseCommand {
     await this.update(workspacesPaths)
   }
 
-  async execCreate (args, path = process.cwd()) {
+  async execCreate (args, runPath = process.cwd()) {
     const [initerName, ...otherArgs] = args
     let packageName = initerName
 
@@ -129,7 +129,6 @@ class Init extends BaseCommand {
       globalBin,
       chalk,
     } = this.npm
-    const runPath = path
     const scriptShell = this.npm.config.get('script-shell') || undefined
     const yes = this.npm.config.get('yes')
 
@@ -140,7 +139,7 @@ class Init extends BaseCommand {
       globalBin,
       output,
       chalk,
-      path,
+      path: this.npm.localPrefix,
       runPath,
       scriptShell,
       yes,
diff --git a/test/lib/commands/init.js b/test/lib/commands/init.js
index f210c9bc2c931..1e45347429258 100644
--- a/test/lib/commands/init.js
+++ b/test/lib/commands/init.js
@@ -1,5 +1,6 @@
 const t = require('tap')
 const fs = require('node:fs/promises')
+const nodePath = require('node:path')
 const { resolve, basename } = require('node:path')
 const _mockNpm = require('../../fixtures/mock-npm')
 const { cleanTime } = require('../../fixtures/clean-snapshot')
@@ -428,4 +429,33 @@ t.test('workspaces', async t => {
     t.equal(ws.version, '1.0.0')
     t.equal(ws.license, 'ISC')
   })
+  t.test('init pkg - installed workspace package', async t => {
+    const { npm } = await mockNpm(t, {
+      prefixDir: {
+        'package.json': JSON.stringify({
+          name: 'init-ws-test',
+          dependencies: {
+            '@npmcli/create': '1.0.0',
+          },
+          workspaces: ['test/workspace-init-a'],
+        }),
+        'test/workspace-init-a': {
+          'package.json': JSON.stringify({
+            version: '1.0.0',
+            name: '@npmcli/create',
+            bin: { 'init-create': 'index.js' },
+          }),
+          'index.js': `#!/usr/bin/env node
+    require('fs').writeFileSync('npm-init-test-success', '')
+    console.log('init-create ran')`,
+        },
+      },
+    })
+    await npm.exec('install', []) // reify
+    npm.config.set('workspace', ['test/workspace-init-b'])
+    await npm.exec('init', ['@npmcli'])
+    const exists = await fs.stat(nodePath.join(
+      npm.prefix, 'test/workspace-init-b', 'npm-init-test-success'))
+    t.ok(exists.isFile(), 'bin ran, creating file inside workspace')
+  })
 })