diff --git a/external-deps/spyder-kernels/.gitrepo b/external-deps/spyder-kernels/.gitrepo
index 4f04f00a36f..9ab9efea944 100644
--- a/external-deps/spyder-kernels/.gitrepo
+++ b/external-deps/spyder-kernels/.gitrepo
@@ -5,8 +5,8 @@
 ;
 [subrepo]
 	remote = https://github.com/spyder-ide/spyder-kernels.git
-	branch = master
-	commit = 07f24b6fde55585e64d1802036efba19514dbf0c
-	parent = 41c288acf1c34b7cd9f1175b4f0fa8233692a26c
+	branch = ppm-syspath
+	commit = 66766d44b0e7a33b08bcfb4ebba9f9c45e848a8b
+	parent = 304ee079a9f75b65cde623b5ae94b6b49d313362
 	method = merge
-	cmdver = 0.4.3
+	cmdver = 0.4.9
diff --git a/external-deps/spyder-kernels/spyder_kernels/console/kernel.py b/external-deps/spyder-kernels/spyder_kernels/console/kernel.py
index 391c7392b24..b1970c2b8a8 100644
--- a/external-deps/spyder-kernels/spyder_kernels/console/kernel.py
+++ b/external-deps/spyder-kernels/spyder_kernels/console/kernel.py
@@ -93,6 +93,11 @@ def __init__(self, *args, **kwargs):
         # To save the python env info
         self.pythonenv_info: PythonEnvInfo = {}
 
+        # Store original sys.path. Kernels are started with PYTHONPATH
+        # removed from environment variables, so this will never have
+        # user paths and should be clean.
+        self._sys_path = sys.path.copy()
+
     @property
     def kernel_info(self):
         # Used for checking correct version by spyder
@@ -765,27 +770,43 @@ def set_special_kernel(self, special):
         raise NotImplementedError(f"{special}")
 
     @comm_handler
-    def update_syspath(self, path_dict, new_path_dict):
+    def update_syspath(self, new_path, prioritize):
         """
         Update the PYTHONPATH of the kernel.
 
-        `path_dict` and `new_path_dict` have the paths as keys and the state
-        as values. The state is `True` for active and `False` for inactive.
-
-        `path_dict` corresponds to the previous state of the PYTHONPATH.
-        `new_path_dict` corresponds to the new state of the PYTHONPATH.
+        Parameters
+        ----------
+        new_path: list of str
+            List of PYTHONPATH paths.
+        prioritize: bool
+            Whether to place PYTHONPATH paths at the front (True) or
+            back (False) of sys.path.
+
+
+        Notes
+        -----
+        A copy of sys.path is made at instantiation, which should be clean,
+        so we can just prepend/append to the copy without having to explicitly
+        remove old user paths. PYTHONPATH can just be overwritten.
         """
-        # Remove old paths
-        for path in path_dict:
-            while path in sys.path:
-                sys.path.remove(path)
-
-        # Add new paths
-        pypath = [path for path, active in new_path_dict.items() if active]
-        if pypath:
-            sys.path.extend(pypath)
-            os.environ.update({'PYTHONPATH': os.pathsep.join(pypath)})
+        if new_path is not None:
+            # Overwrite PYTHONPATH
+            os.environ.update({'PYTHONPATH': os.pathsep.join(new_path)})
+
+            # Add new paths to original sys.path
+            if prioritize:
+                sys.path[:] = new_path + self._sys_path
+
+                # Ensure current directory is always first to imitate Python
+                # standard behavior
+                if '' in sys.path:
+                    sys.path.remove('')
+                    sys.path.insert(0, '')
+            else:
+                sys.path[:] = self._sys_path + new_path
         else:
+            # Restore original sys.path and remove PYTHONPATH
+            sys.path[:] = self._sys_path
             os.environ.pop('PYTHONPATH', None)
 
     @comm_handler
diff --git a/external-deps/spyder-kernels/spyder_kernels/console/start.py b/external-deps/spyder-kernels/spyder_kernels/console/start.py
index b8a423af2a9..3f7607eb05b 100644
--- a/external-deps/spyder-kernels/spyder_kernels/console/start.py
+++ b/external-deps/spyder-kernels/spyder_kernels/console/start.py
@@ -16,6 +16,14 @@
 import sys
 import site
 
+# Remove current directory from sys.path to prevent kernel crashes when people
+# name Python files or modules with the same name as standard library modules.
+# See spyder-ide/spyder#8007
+# Inject it back into sys.path after all imports in this module but
+# before the kernel is initialized
+while '' in sys.path:
+    sys.path.remove('')
+
 # Third-party imports
 from traitlets import DottedObjectName
 
@@ -29,13 +37,6 @@ def import_spydercustomize():
     parent = osp.dirname(here)
     customize_dir = osp.join(parent, 'customize')
 
-    # Remove current directory from sys.path to prevent kernel
-    # crashes when people name Python files or modules with
-    # the same name as standard library modules.
-    # See spyder-ide/spyder#8007
-    while '' in sys.path:
-        sys.path.remove('')
-
     # Import our customizations
     site.addsitedir(customize_dir)
     import spydercustomize  # noqa
@@ -46,6 +47,7 @@ def import_spydercustomize():
     except ValueError:
         pass
 
+
 def kernel_config():
     """Create a config object with IPython kernel options."""
     from IPython.core.application import get_ipython_dir
@@ -150,13 +152,6 @@ def main():
     # Import our customizations into the kernel
     import_spydercustomize()
 
-    # Remove current directory from sys.path to prevent kernel
-    # crashes when people name Python files or modules with
-    # the same name as standard library modules.
-    # See spyder-ide/spyder#8007
-    while '' in sys.path:
-        sys.path.remove('')
-
     # Main imports
     from ipykernel.kernelapp import IPKernelApp
     from spyder_kernels.console.kernel import SpyderKernel
@@ -189,6 +184,12 @@ def close(self):
         kernel.config = kernel_config()
     except:
         pass
+
+    # Re-add current working directory path into sys.path after all of the
+    # import statements, but before initializing the kernel.
+    if '' not in sys.path:
+        sys.path.insert(0, '')
+
     kernel.initialize()
 
     # Set our own magics
diff --git a/external-deps/spyder-kernels/spyder_kernels/console/tests/test_console_kernel.py b/external-deps/spyder-kernels/spyder_kernels/console/tests/test_console_kernel.py
index 7e623b30107..dfcd10086b0 100644
--- a/external-deps/spyder-kernels/spyder_kernels/console/tests/test_console_kernel.py
+++ b/external-deps/spyder-kernels/spyder_kernels/console/tests/test_console_kernel.py
@@ -77,13 +77,15 @@ def setup_kernel(cmd):
         )
         # wait for connection file to exist, timeout after 5s
         tic = time.time()
-        while not os.path.exists(connection_file) \
-            and kernel.poll() is None \
-            and time.time() < tic + SETUP_TIMEOUT:
+        while (
+            not os.path.exists(connection_file)
+            and kernel.poll() is None
+            and time.time() < tic + SETUP_TIMEOUT
+        ):
             time.sleep(0.1)
 
         if kernel.poll() is not None:
-            o,e = kernel.communicate()
+            o, e = kernel.communicate()
             raise IOError("Kernel failed to start:\n%s" % e)
 
         if not os.path.exists(connection_file):
@@ -229,7 +231,7 @@ def kernel(request):
             'True_'
         ],
         'minmax': False,
-        'filter_on':True
+        'filter_on': True
     }
 
     # Teardown
@@ -468,8 +470,11 @@ def test_is_defined(kernel):
 def test_get_doc(kernel):
     """Test to get object documentation dictionary."""
     objtxt = 'help'
-    assert ("Define the builtin 'help'" in kernel.get_doc(objtxt)['docstring'] or
-            "Define the built-in 'help'" in kernel.get_doc(objtxt)['docstring'])
+    assert (
+        "Define the builtin 'help'" in kernel.get_doc(objtxt)['docstring']
+        or "Define the built-in 'help'" in kernel.get_doc(objtxt)['docstring']
+    )
+
 
 def test_get_source(kernel):
     """Test to get object source."""
@@ -507,7 +512,7 @@ def test_cwd_in_sys_path():
     with setup_kernel(cmd) as client:
         reply = client.execute_interactive(
             "import sys; sys_path = sys.path",
-            user_expressions={'output':'sys_path'}, timeout=TIMEOUT)
+            user_expressions={'output': 'sys_path'}, timeout=TIMEOUT)
 
         # Transform value obtained through user_expressions
         user_expressions = reply['content']['user_expressions']
@@ -518,6 +523,21 @@ def test_cwd_in_sys_path():
         assert '' in value
 
 
+def test_prioritize(kernel):
+    """Test that user path priority is honored in sys.path."""
+    syspath = kernel.get_syspath()
+    append_path = ['/test/append/path']
+    prepend_path = ['/test/prepend/path']
+
+    kernel.update_syspath(append_path, prioritize=False)
+    new_syspath = kernel.get_syspath()
+    assert new_syspath == syspath + append_path
+
+    kernel.update_syspath(prepend_path, prioritize=True)
+    new_syspath = kernel.get_syspath()
+    assert new_syspath == prepend_path + syspath
+
+
 @flaky(max_runs=3)
 def test_multiprocessing(tmpdir):
     """
@@ -701,8 +721,10 @@ def test_runfile(tmpdir):
         assert content['found']
 
         # Run code file `u` with current namespace
-        msg = client.execute_interactive("%runfile {} --current-namespace"
-                                        .format(repr(str(u))), timeout=TIMEOUT)
+        msg = client.execute_interactive(
+            "%runfile {} --current-namespace".format(repr(str(u))),
+            timeout=TIMEOUT
+        )
         content = msg['content']
 
         # Verify that the variable `result3` is defined
@@ -727,7 +749,9 @@ def test_runfile(tmpdir):
     sys.platform == 'darwin' and sys.version_info[:2] == (3, 8),
     reason="Fails on Mac with Python 3.8")
 def test_np_threshold(kernel):
-    """Test that setting Numpy threshold doesn't make the Variable Explorer slow."""
+    """
+    Test that setting Numpy threshold doesn't make the Variable Explorer slow.
+    """
 
     cmd = "from spyder_kernels.console import start; start.main()"
 
@@ -786,7 +810,9 @@ def test_np_threshold(kernel):
         while "data" not in msg['content']:
             msg = client.get_shell_msg(timeout=TIMEOUT)
         content = msg['content']['data']['text/plain']
-        assert "{'float_kind': <built-in method format of str object" in content
+        assert (
+            "{'float_kind': <built-in method format of str object" in content
+        )
 
 
 @flaky(max_runs=3)
@@ -952,11 +978,12 @@ def test_comprehensions_with_locals_in_pdb(kernel):
 
     # Check that the variable is not reported as being part of globals.
     kernel.shell.pdb_session.default("in_globals = 'zz' in globals()")
-    assert kernel.get_value('in_globals') == False
+    assert kernel.get_value('in_globals') is False
 
     pdb_obj.curframe = None
     pdb_obj.curframe_locals = None
 
+
 def test_comprehensions_with_locals_in_pdb_2(kernel):
     """
     Test that evaluating comprehensions with locals works in Pdb.
@@ -1001,6 +1028,7 @@ def test_namespaces_in_pdb(kernel):
     # Create wrapper to check for errors
     old_error = pdb_obj.error
     pdb_obj._error_occured = False
+
     def error_wrapper(*args, **kwargs):
         print(args, kwargs)
         pdb_obj._error_occured = True
@@ -1052,7 +1080,6 @@ def test_functions_with_locals_in_pdb(kernel):
         'zz = fun_a()')
     assert kernel.get_value('zz') == 1
 
-
     pdb_obj.curframe = None
     pdb_obj.curframe_locals = None
 
@@ -1110,11 +1137,11 @@ def test_locals_globals_in_pdb(kernel):
 
     kernel.shell.pdb_session.default(
         'test = "a" in globals()')
-    assert kernel.get_value('test') == False
+    assert kernel.get_value('test') is False
 
     kernel.shell.pdb_session.default(
         'test = "a" in locals()')
-    assert kernel.get_value('test') == True
+    assert kernel.get_value('test') is True
 
     kernel.shell.pdb_session.default(
         'def f(): return a')
@@ -1128,11 +1155,11 @@ def test_locals_globals_in_pdb(kernel):
 
     kernel.shell.pdb_session.default(
         'test = "a" in globals()')
-    assert kernel.get_value('test') == False
+    assert kernel.get_value('test') is False
 
     kernel.shell.pdb_session.default(
         'test = "a" in locals()')
-    assert kernel.get_value('test') == True
+    assert kernel.get_value('test') is True
 
     pdb_obj.curframe = None
     pdb_obj.curframe_locals = None
@@ -1210,7 +1237,7 @@ def test_global_message(tmpdir):
 
         def check_found(msg):
             if "text" in msg["content"]:
-                if ("WARNING: This file contains a global statement"  in
+                if ("WARNING: This file contains a global statement" in
                         msg["content"]["text"]):
                     global found
                     found = True
@@ -1256,7 +1283,7 @@ def test_debug_namespace(tmpdir):
                 if 'hello' in msg["content"].get("text"):
                     break
 
-         # make sure that get_value('bb') returns 'hello'
+        # make sure that get_value('bb') returns 'hello'
         client.get_stdin_msg(timeout=TIMEOUT)
         client.input("get_ipython().kernel.get_value('bb')")
 
diff --git a/external-deps/spyder-kernels/spyder_kernels/customize/spydercustomize.py b/external-deps/spyder-kernels/spyder_kernels/customize/spydercustomize.py
index f7a1ddd0fc0..3595670b679 100644
--- a/external-deps/spyder-kernels/spyder_kernels/customize/spydercustomize.py
+++ b/external-deps/spyder-kernels/spyder_kernels/customize/spydercustomize.py
@@ -275,17 +275,3 @@ def restore_tmpdir():
                 pass
 
 restore_tmpdir()
-
-# =============================================================================
-# PYTHONPATH and sys.path Adjustments
-# =============================================================================
-# PYTHONPATH is not passed to kernel directly, see spyder-ide/spyder#13519
-# This allows the kernel to start without crashing if modules in PYTHONPATH
-# shadow standard library modules.
-def set_spyder_pythonpath():
-    pypath = os.environ.get('SPY_PYTHONPATH')
-    if pypath:
-        sys.path.extend(pypath.split(os.pathsep))
-        os.environ.update({'PYTHONPATH': pypath})
-
-set_spyder_pythonpath()
diff --git a/spyder/app/tests/conftest.py b/spyder/app/tests/conftest.py
index f67a426208f..920662c141e 100755
--- a/spyder/app/tests/conftest.py
+++ b/spyder/app/tests/conftest.py
@@ -27,15 +27,13 @@
 from spyder.api.plugin_registration.registry import PLUGIN_REGISTRY
 from spyder.api.plugins import Plugins
 from spyder.app import start
-from spyder.config.base import get_home_dir, running_in_ci
+from spyder.config.base import get_home_dir
 from spyder.config.manager import CONF
 from spyder.plugins.ipythonconsole.utils.kernelspec import SpyderKernelSpec
 from spyder.plugins.projects.api import EmptyProject
 from spyder.plugins.run.api import RunActions, StoredRunConfigurationExecutor
 from spyder.plugins.toolbar.api import ApplicationToolbars
 from spyder.utils import encoding
-from spyder.utils.environ import (get_user_env, set_user_env,
-                                  amend_user_shell_init)
 
 # =============================================================================
 # ---- Constants
@@ -624,20 +622,3 @@ def threads_condition():
                     CONF.reset_manager()
                     PLUGIN_REGISTRY.reset()
                     raise
-
-
-@pytest.fixture
-def restore_user_env():
-    """Set user environment variables and restore upon test exit"""
-    if not running_in_ci():
-        pytest.skip("Skipped because not in CI.")
-
-    if os.name == "nt":
-        orig_env = get_user_env()
-
-    yield
-
-    if os.name == "nt":
-        set_user_env(orig_env)
-    else:
-        amend_user_shell_init(restore=True)
diff --git a/spyder/app/tests/test_mainwindow.py b/spyder/app/tests/test_mainwindow.py
index f977b90c2a0..e0465457b17 100644
--- a/spyder/app/tests/test_mainwindow.py
+++ b/spyder/app/tests/test_mainwindow.py
@@ -11,6 +11,7 @@
 """
 
 # Standard library imports
+from collections import OrderedDict
 import gc
 import os
 import os.path as osp
@@ -85,7 +86,6 @@
     WorkingDirSource, RunContext)
 from spyder.plugins.shortcuts.widgets.table import SEQUENCE
 from spyder.py3compat import qbytearray_to_str, to_text_string
-from spyder.utils.environ import set_user_env
 from spyder.utils.conda import get_list_conda_envs
 from spyder.utils.misc import remove_backslashes, rename_file
 from spyder.utils.clipboard_helper import CLIPBOARD_HELPER
@@ -6469,8 +6469,7 @@ def test_switch_to_plugin(main_window, qtbot):
 
 
 @flaky(max_runs=5)
-def test_PYTHONPATH_in_consoles(main_window, qtbot, tmp_path,
-                                restore_user_env):
+def test_PYTHONPATH_in_consoles(main_window, qtbot, tmp_path):
     """
     Test that PYTHONPATH is passed to IPython consoles under different
     scenarios.
@@ -6484,36 +6483,24 @@ def test_PYTHONPATH_in_consoles(main_window, qtbot, tmp_path,
     # Main variables
     ppm = main_window.get_plugin(Plugins.PythonpathManager)
 
-    # Add a directory to PYTHONPATH
-    sys_dir = tmp_path / 'sys_dir'
-    sys_dir.mkdir()
-    set_user_env({"PYTHONPATH": str(sys_dir)})
-
     # Add a directory to the current list of paths to simulate a path added by
     # users
     user_dir = tmp_path / 'user_dir'
     user_dir.mkdir()
+    user_paths = OrderedDict({str(user_dir): True})
     if os.name != "nt":
-        assert ppm.get_container().path == ()
-    ppm.get_container().path = (str(user_dir),) + ppm.get_container().path
-
-    # Open Pythonpath dialog to detect sys_dir
-    ppm.show_path_manager()
-    qtbot.wait(500)
-
-    # Check we're showing two headers
-    assert len(ppm.path_manager_dialog.headers) == 2
+        assert ppm.get_container()._spyder_pythonpath == []
 
     # Check the PPM emits the right signal after closing the dialog
     with qtbot.waitSignal(ppm.sig_pythonpath_changed, timeout=1000):
-        ppm.path_manager_dialog.close()
+        ppm.get_container()._save_paths(user_paths=user_paths)
 
     # Check directories were added to sys.path in the right order
     with qtbot.waitSignal(shell.executed, timeout=2000):
         shell.execute("import sys; sys_path = sys.path")
 
     sys_path = shell.get_value("sys_path")
-    assert sys_path[-2:] == [str(user_dir), str(sys_dir)]
+    assert sys_path[-1:] == [str(user_dir)]
 
     # Create new console
     ipyconsole.create_new_client()
@@ -6526,7 +6513,7 @@ def test_PYTHONPATH_in_consoles(main_window, qtbot, tmp_path,
         shell1.execute("import sys; sys_path = sys.path")
 
     sys_path = shell1.get_value("sys_path")
-    assert sys_path[-2:] == [str(user_dir), str(sys_dir)]
+    assert sys_path[-1:] == [str(user_dir)]
 
     # Check that disabling a path from the PPM removes it from sys.path in all
     # consoles
diff --git a/spyder/config/lsp.py b/spyder/config/lsp.py
index b391d006bd8..4410e90b99b 100644
--- a/spyder/config/lsp.py
+++ b/spyder/config/lsp.py
@@ -79,6 +79,7 @@
                     'environment': None,
                     'extra_paths': [],
                     'env_vars': None,
+                    'prioritize_extra_paths': False,
                     # Until we have a graphical way for users to add modules to
                     # this option
                     'auto_import_modules': [
diff --git a/spyder/config/main.py b/spyder/config/main.py
index ec6f7fe8df0..62d465f0368 100644
--- a/spyder/config/main.py
+++ b/spyder/config/main.py
@@ -116,6 +116,9 @@
             ('pythonpath_manager',
              {
               'spyder_pythonpath': [],
+              'prioritize': False,
+              'system_paths': {},
+              'user_paths': {},
               }),
             ('quick_layouts',
              {
diff --git a/spyder/plugins/completion/api.py b/spyder/plugins/completion/api.py
index f9de9a37526..65cdedb99e6 100644
--- a/spyder/plugins/completion/api.py
+++ b/spyder/plugins/completion/api.py
@@ -1059,17 +1059,17 @@ def project_path_update(self, project_path: str, update_kind: str,
         """
         pass
 
-    @Slot(object, object)
-    def python_path_update(self, previous_path, new_path):
+    @Slot(object, bool)
+    def python_path_update(self, new_path, prioritize):
         """
         Handle Python path updates on Spyder.
 
         Parameters
         ----------
-        previous_path: Dict
-            Dictionary containing the previous Python path values.
-        new_path: Dict
+        new_path: list of str
             Dictionary containing the current Python path values.
+        prioritize
+            Whether to prioritize Python path values in sys.path
         """
         pass
 
diff --git a/spyder/plugins/completion/plugin.py b/spyder/plugins/completion/plugin.py
index e519b58de24..a77f66aa995 100644
--- a/spyder/plugins/completion/plugin.py
+++ b/spyder/plugins/completion/plugin.py
@@ -124,16 +124,16 @@ class CompletionPlugin(SpyderPluginV2):
         Name of the completion client.
     """
 
-    sig_pythonpath_changed = Signal(object, object)
+    sig_pythonpath_changed = Signal(object, bool)
     """
-    This signal is used to receive changes on the PythonPath.
+    This signal is used to receive changes on the PYTHONPATH.
 
     Parameters
     ----------
-    prev_path: dict
-        Previous PythonPath settings.
-    new_path: dict
+    new_path: list of str
         New PythonPath settings.
+    prioritize
+        Whether to prioritize PYTHONPATH in sys.path
     """
 
     _sig_interpreter_changed = Signal(str)
diff --git a/spyder/plugins/completion/providers/languageserver/provider.py b/spyder/plugins/completion/providers/languageserver/provider.py
index e5d9f90e987..936ec663d1d 100644
--- a/spyder/plugins/completion/providers/languageserver/provider.py
+++ b/spyder/plugins/completion/providers/languageserver/provider.py
@@ -377,7 +377,6 @@ def project_path_update(self, project_path, update_kind, projects):
                     self.stop_completion_services_for_language(language)
                     self.start_completion_services_for_language(language)
 
-
     def report_server_error(self, error):
         """Report server errors in our error report dialog."""
         error_data = dict(
@@ -532,26 +531,21 @@ def shutdown(self):
         for language in self.clients:
             self.stop_completion_services_for_language(language)
 
-    @Slot(object, object)
-    def python_path_update(self, path_dict, new_path_dict):
+    @Slot(object, bool)
+    def python_path_update(self, new_path, prioritize):
         """
         Update server configuration after a change in Spyder's Python
         path.
 
-        `path_dict` corresponds to the previous state of the Python path.
-        `new_path_dict` corresponds to the new state of the Python path.
+        `new_path` corresponds to the new state of the Python path.
+        `prioritize` determines whether to prioritize Python path in sys.path.
         """
-        # If path_dict and new_path_dict are the same, it means the change
-        # was generated by opening or closing a project. In that case, we
-        # don't need to request an update because that's done through the
-        # addition/deletion of workspaces.
-        update = True
-        if path_dict == new_path_dict:
-            update = False
-
-        if update:
-            logger.debug("Update server's sys.path")
-            self.update_lsp_configuration(python_only=True)
+        # Opening/closing a project will create a diff between old_path
+        # and new_path, but we don't know if prioritize changed.
+        # sig_pythonpath_changed is only emitted if there is a change so we
+        # should always update the confguration when this method is called.
+        logger.debug("Update server's sys.path")
+        self.update_lsp_configuration(python_only=True)
 
     @qdebounced(timeout=600)
     def interpreter_changed(self, interpreter: str):
@@ -589,8 +583,11 @@ def on_pyls_spyder_configuration_change(self, option, value):
     def on_code_snippets_enabled_disabled(self, value):
         self.update_lsp_configuration()
 
-    @on_conf_change(section='pythonpath_manager', option='spyder_pythonpath')
-    def on_pythonpath_option_update(self, value):
+    @on_conf_change(
+        section='pythonpath_manager',
+        option=['spyder_pythonpath', 'prioritize']
+    )
+    def on_pythonpath_option_update(self, option, value):
         # This is only useful to run some self-contained tests
         if running_under_pytest():
             self.update_lsp_configuration(python_only=True)
@@ -806,13 +803,15 @@ def generate_python_config(self):
 
         # Jedi configuration
         env_vars = os.environ.copy()  # Ensure env is indepependent of PyLSP's
-        env_vars.pop('PYTHONPATH', None)
 
         jedi = {
             'environment': self._interpreter,
             'extra_paths': self.get_conf('spyder_pythonpath',
                                          section='pythonpath_manager',
                                          default=[]),
+            'prioritize_extra_paths': self.get_conf(
+                'prioritize', section='pythonpath_manager', default=False
+            ),
             'env_vars': env_vars,
         }
         jedi_completion = {
diff --git a/spyder/plugins/ipythonconsole/plugin.py b/spyder/plugins/ipythonconsole/plugin.py
index cd7374b3789..831722fecec 100644
--- a/spyder/plugins/ipythonconsole/plugin.py
+++ b/spyder/plugins/ipythonconsole/plugin.py
@@ -496,7 +496,7 @@ def on_main_menu_teardown(self):
         mainmenu.remove_item_from_application_menu(
             IPythonConsoleWidgetMenus.Documentation,
             menu_id=ApplicationMenus.Help
-         )
+        )
 
     @on_plugin_teardown(plugin=Plugins.Editor)
     def on_editor_teardown(self):
@@ -982,7 +982,7 @@ def save_working_directory(self, dirname):
         """
         self.get_widget().save_working_directory(dirname)
 
-    def update_path(self, path_dict, new_path_dict):
+    def update_path(self, new_path, prioritize):
         """
         Update path on consoles.
 
@@ -991,16 +991,16 @@ def update_path(self, path_dict, new_path_dict):
 
         Parameters
         ----------
-        path_dict : dict
-            Corresponds to the previous state of the PYTHONPATH.
-        new_path_dict : dict
+        new_path : list of str
             Corresponds to the new state of the PYTHONPATH.
+        prioritize : bool
+            Whether to prioritize PYTHONPATH in sys.path
 
         Returns
         -------
         None.
         """
-        self.get_widget().update_path(path_dict, new_path_dict)
+        self.get_widget().update_path(new_path, prioritize)
 
     def restart(self):
         """
diff --git a/spyder/plugins/ipythonconsole/utils/kernelspec.py b/spyder/plugins/ipythonconsole/utils/kernelspec.py
index b29383fd136..428429fc0a3 100644
--- a/spyder/plugins/ipythonconsole/utils/kernelspec.py
+++ b/spyder/plugins/ipythonconsole/utils/kernelspec.py
@@ -171,12 +171,6 @@ def env(self):
         # Do not pass PYTHONPATH to kernels directly, spyder-ide/spyder#13519
         env_vars.pop('PYTHONPATH', None)
 
-        # List of paths declared by the user, plus project's path, to
-        # add to PYTHONPATH
-        pathlist = self.get_conf(
-            'spyder_pythonpath', default=[], section='pythonpath_manager')
-        pypath = os.pathsep.join(pathlist)
-
         # List of modules to exclude from our UMR
         umr_namelist = self.get_conf(
             'umr/namelist', section='main_interpreter')
@@ -198,7 +192,6 @@ def env(self):
             'SPY_JEDI_O': self.get_conf('jedi_completer'),
             'SPY_TESTING': running_under_pytest() or get_safe_mode(),
             'SPY_HIDE_CMD': self.get_conf('hide_cmd_windows'),
-            'SPY_PYTHONPATH': pypath,
             # This env var avoids polluting the OS default temp directory with
             # files generated by `conda run`. It's restored/removed in the
             # kernel after initialization.
diff --git a/spyder/plugins/ipythonconsole/utils/tests/test_spyder_kernel.py b/spyder/plugins/ipythonconsole/utils/tests/test_spyder_kernel.py
index 0503af6a6a0..35b1b187f8a 100644
--- a/spyder/plugins/ipythonconsole/utils/tests/test_spyder_kernel.py
+++ b/spyder/plugins/ipythonconsole/utils/tests/test_spyder_kernel.py
@@ -36,9 +36,7 @@ def test_kernel_pypath(tmpdir, default_interpreter):
     kernel_spec = SpyderKernelSpec()
 
     # Check that PYTHONPATH is not in our kernelspec
-    # and pypath is in SPY_PYTHONPATH
     assert 'PYTHONPATH' not in kernel_spec.env
-    assert pypath in kernel_spec.env['SPY_PYTHONPATH']
 
     # Restore default values
     CONF.set('main_interpreter', 'default', True)
diff --git a/spyder/plugins/ipythonconsole/widgets/main_widget.py b/spyder/plugins/ipythonconsole/widgets/main_widget.py
index 5fd06d36a78..cc2947d20cc 100644
--- a/spyder/plugins/ipythonconsole/widgets/main_widget.py
+++ b/spyder/plugins/ipythonconsole/widgets/main_widget.py
@@ -2447,13 +2447,13 @@ def on_working_directory_changed(self, dirname):
         if dirname and osp.isdir(dirname):
             self.sig_current_directory_changed.emit(dirname)
 
-    def update_path(self, path_dict, new_path_dict):
+    def update_path(self, new_path, prioritize):
         """Update path on consoles."""
         logger.debug("Update sys.path in all console clients")
         for client in self.clients:
             shell = client.shellwidget
             if shell is not None:
-                shell.update_syspath(path_dict, new_path_dict)
+                shell.update_syspath(new_path, prioritize)
 
     def get_active_project_path(self):
         """Get the active project path."""
diff --git a/spyder/plugins/ipythonconsole/widgets/shell.py b/spyder/plugins/ipythonconsole/widgets/shell.py
index fb623608525..4b5112e6b24 100644
--- a/spyder/plugins/ipythonconsole/widgets/shell.py
+++ b/spyder/plugins/ipythonconsole/widgets/shell.py
@@ -413,6 +413,15 @@ def setup_spyder_kernel(self):
 
         self.send_spyder_kernel_configuration()
 
+        # Update sys.path
+        paths = self.get_conf(
+            "spyder_pythonpath", section="pythonpath_manager"
+        )
+        prioritize = self.get_conf(
+            "prioritize", section="pythonpath_manager"
+        )
+        self.update_syspath(paths, prioritize)
+
         run_lines = self.get_conf('startup/run_lines')
         if run_lines:
             self.execute(run_lines, hidden=True)
@@ -712,14 +721,14 @@ def set_color_scheme(self, color_scheme, reset=True):
             "color scheme", "dark" if not dark_color else "light"
         )
 
-    def update_syspath(self, path_dict, new_path_dict):
+    def update_syspath(self, new_paths, prioritize):
         """Update sys.path contents in the kernel."""
         # Prevent error when the kernel is not available and users open/close
         # projects or use the Python path manager.
         # Fixes spyder-ide/spyder#21563
         if self.kernel_handler is not None:
             self.call_kernel(interrupt=True, blocking=False).update_syspath(
-                path_dict, new_path_dict
+                new_paths, prioritize
             )
 
     def request_syspath(self):
diff --git a/spyder/plugins/ipythonconsole/widgets/tests/test_kernelconnect.py b/spyder/plugins/ipythonconsole/widgets/tests/test_kernelconnect.py
index dea1641bb93..5ee9220ec16 100644
--- a/spyder/plugins/ipythonconsole/widgets/tests/test_kernelconnect.py
+++ b/spyder/plugins/ipythonconsole/widgets/tests/test_kernelconnect.py
@@ -130,6 +130,7 @@ def test_connection_dialog_remembers_input_with_ssh_passphrase(
     assert new_dlg.pn.text() == str(pytest.pn)
     assert new_dlg.kf.text() == pytest.kf
     if not running_in_ci():
+        # !!! This fails on latest master...
         assert new_dlg.kfp.text() == pytest.kfp
 
 
@@ -182,6 +183,7 @@ def test_connection_dialog_remembers_input_with_password(
     assert new_dlg.un.text() == pytest.un
     assert new_dlg.pn.text() == str(pytest.pn)
     if not running_in_ci():
+        # !!! This fails on latest master...
         assert new_dlg.pw.text() == pytest.pw
 
 
diff --git a/spyder/plugins/pythonpath/container.py b/spyder/plugins/pythonpath/container.py
index 84baa967280..6badd44eea9 100644
--- a/spyder/plugins/pythonpath/container.py
+++ b/spyder/plugins/pythonpath/container.py
@@ -9,6 +9,7 @@
 
 from collections import OrderedDict
 import logging
+import os
 import os.path as osp
 
 from qtpy.QtCore import Signal
@@ -34,32 +35,21 @@ class PythonpathActions:
 # -----------------------------------------------------------------------------
 class PythonpathContainer(PluginMainContainer):
 
-    sig_pythonpath_changed = Signal(object, object)
+    sig_pythonpath_changed = Signal(object, bool)
 
     def __init__(self, *args, **kwargs):
         super().__init__(*args, **kwargs)
-        self.path = ()
-        self.not_active_path = ()
-        self.project_path = ()
 
     # ---- PluginMainContainer API
     # -------------------------------------------------------------------------
     def setup(self):
-
-        # Migrate from old conf files to config options
-        if self.get_conf('paths_in_conf_files', default=True):
-            self._migrate_to_config_options()
-
-        # Load Python path
-        self._load_pythonpath()
-
-        # Save current Pythonpath at startup so plugins can use it afterwards
-        self.set_conf('spyder_pythonpath', self.get_spyder_pythonpath())
+        # Load Python paths
+        self._load_paths()
 
         # Path manager dialog
         self.path_manager_dialog = PathManager(parent=self, sync=True)
         self.path_manager_dialog.sig_path_changed.connect(
-            self._update_python_path)
+            self._save_paths)
         self.path_manager_dialog.redirect_stdio.connect(
             self.sig_redirect_stdio_requested)
 
@@ -74,48 +64,44 @@ def setup(self):
     def update_actions(self):
         pass
 
-    def on_close(self):
-        # Save current system path to detect changes next time Spyder starts
-        self.set_conf('system_path', get_system_pythonpath())
-
     # ---- Public API
     # -------------------------------------------------------------------------
     def update_active_project_path(self, path):
-        """Update active project path."""
+        """Update active project path.
+
+        _project_paths is initialized in _load_paths, but set in this method
+        and nowhere else.
+        """
+        # _project_paths should be reset whenever it is updated.
+        self._project_paths = OrderedDict()
         if path is None:
-            logger.debug("Update Pythonpath because project was closed")
-            path = ()
+            logger.debug("Update Spyder PYTHONPATH because project was closed")
         else:
-            logger.debug(f"Add to Pythonpath project's path -> {path}")
-            path = (path,)
+            logger.debug(f"Add project paths to Spyder PYTHONPATH: {path}")
+            path = [path] if isinstance(path, str) else path
+            self._project_paths.update({p: True for p in path})
 
-        # Old path
-        old_path_dict_p = self._get_spyder_pythonpath_dict()
-
-        # Change project path
-        self.project_path = path
-        self.path_manager_dialog.project_path = path
-
-        # New path
-        new_path_dict_p = self._get_spyder_pythonpath_dict()
-
-        # Update path
-        self.set_conf('spyder_pythonpath', self.get_spyder_pythonpath())
-        self.sig_pythonpath_changed.emit(old_path_dict_p, new_path_dict_p)
+        self._save_paths()
 
     def show_path_manager(self):
-        """Show path manager dialog."""
-        # Do not update paths or run setup if widget is already open,
-        # see spyder-ide/spyder#20808
+        """Show path manager dialog.
+
+        Send the most up-to-date system paths to the dialog in case they have
+        changed. But do not _save_paths until after the dialog exits, in order
+        to consolidate possible changes and avoid emitting multiple signals.
+        This requires that the dialog return its original paths on cancel or
+        close.
+        """
+        # Do not update paths if widget is already open,
+        # see spyder-ide/spyder#20808.
         if not self.path_manager_dialog.isVisible():
-            # Set main attributes saved here
             self.path_manager_dialog.update_paths(
-                self.path, self.not_active_path, get_system_pythonpath()
+                project_paths=self._project_paths,
+                user_paths=self._user_paths,
+                system_paths=self._system_paths,
+                prioritize=self._prioritize
             )
 
-            # Setup its contents again
-            self.path_manager_dialog.setup()
-
         # Show and give it focus
         self.path_manager_dialog.show()
         self.path_manager_dialog.activateWindow()
@@ -123,125 +109,104 @@ def show_path_manager(self):
         self.path_manager_dialog.setFocus()
 
     def get_spyder_pythonpath(self):
-        """
-        Return active Spyder PYTHONPATH plus project path as a list of paths.
-        """
-        path_dict = self._get_spyder_pythonpath_dict()
-        path = [k for k, v in path_dict.items() if v]
-        return path
+        """Return active Spyder PYTHONPATH as a list of paths."""
+        # Desired behavior is project_paths | user_paths | system_paths, but
+        # Python 3.8 does not support | operator for OrderedDict.
+        all_paths = OrderedDict(reversed(self._system_paths.items()))
+        all_paths.update(reversed(self._user_paths.items()))
+        all_paths.update(reversed(self._project_paths.items()))
+        all_paths = OrderedDict(reversed(all_paths.items()))
+
+        return [p for p, v in all_paths.items() if v]
 
     # ---- Private API
     # -------------------------------------------------------------------------
-    def _load_pythonpath(self):
-        """Load Python paths."""
-        # Get current system PYTHONPATH
-        system_path = get_system_pythonpath()
-
-        # Get previous system PYTHONPATH
-        previous_system_path = self.get_conf('system_path', default=())
-
-        # Load all paths
-        paths = []
-        previous_paths = self.get_conf('path')
-        for path in previous_paths:
-            # Path was removed since last time or it's not a directory
-            # anymore
-            if not osp.isdir(path):
-                continue
+    def _load_paths(self):
+        """Load Python paths.
 
-            # Path was removed from system path
-            if path in previous_system_path and path not in system_path:
-                continue
-
-            paths.append(path)
-
-        self.path = tuple(paths)
-
-        # Update path option. This avoids loading paths that were removed in
-        # this session in later ones.
-        self.set_conf('path', self.path)
+        The attributes _project_paths, _user_paths, _system_paths, _prioritize,
+        and _spyder_pythonpath, are initialized here. All but _project_paths
+        should be updated only in _save_paths. They are only used to detect
+        changes.
+        """
+        self._project_paths = OrderedDict()
+        self._user_paths = OrderedDict()
+        self._system_paths = OrderedDict()
+        self._prioritize = False
+        self._spyder_pythonpath = []
+
+        # Get user paths. Check migration from old conf files
+        user_paths = self._migrate_to_config_options()
+        if user_paths is None:
+            user_paths = self.get_conf('user_paths', {})
+        user_paths = OrderedDict(user_paths)
 
-        # Update system path so that path_manager_dialog can work with its
-        # latest contents.
-        self.set_conf('system_path', system_path)
+        # Get current system PYTHONPATH
+        system_paths = self._get_system_paths()
 
-        # Add system path
-        if system_path:
-            self.path = self.path + system_path
+        # Get prioritize
+        prioritize = self.get_conf('prioritize', False)
 
-        # Load not active paths
-        not_active_paths = self.get_conf('not_active_path')
-        self.not_active_path = tuple(
-            name for name in not_active_paths if osp.isdir(name)
-        )
+        self._save_paths(user_paths, system_paths, prioritize)
 
-    def _save_paths(self, new_path_dict):
-        """
-        Save tuples for all paths and not active ones to config system and
-        update their associated attributes.
+    def _get_system_paths(self):
+        system_paths = get_system_pythonpath()
+        conf_system_paths = self.get_conf('system_paths', {})
 
-        `new_path_dict` is an OrderedDict that has the new paths as keys and
-        the state as values. The state is `True` for active and `False` for
-        inactive.
-        """
-        path = tuple(p for p in new_path_dict)
-        not_active_path = tuple(
-            p for p in new_path_dict if not new_path_dict[p]
+        system_paths = OrderedDict(
+            {p: conf_system_paths.get(p, True) for p in system_paths}
         )
 
-        # Don't set options unless necessary
-        if path != self.path:
-            self.set_conf('path', path)
-            self.path = path
-
-        if not_active_path != self.not_active_path:
-            self.set_conf('not_active_path', not_active_path)
-            self.not_active_path = not_active_path
-
-    def _get_spyder_pythonpath_dict(self):
-        """
-        Return Spyder PYTHONPATH plus project path as dictionary of paths.
-
-        The returned ordered dictionary has the paths as keys and the state
-        as values. The state is `True` for active and `False` for inactive.
+        return system_paths
 
-        Example:
-            OrderedDict([('/some/path, True), ('/some/other/path, False)])
+    def _save_paths(self, user_paths=None, system_paths=None, prioritize=None):
         """
-        path_dict = OrderedDict()
-
-        # Make project path to be the first one so that modules developed in a
-        # project are not shadowed by those present in other paths.
-        for path in self.project_path:
-            path_dict[path] = True
+        Save user and system path dictionaries to config and prioritize to
+        config. Each dictionary key is a path and the value is the active
+        state.
 
-        for path in self.path:
-            path_dict[path] = path not in self.not_active_path
-
-        return path_dict
-
-    def _update_python_path(self, new_path_dict=None):
-        """
-        Update Python path on language server and kernels.
+        `user_paths` is user paths. `system_paths` is system paths, and
+        `prioritize` is a boolean indicating whether paths should be
+        prepended (True) or appended (False) to sys.path.
 
-        The new_path_dict should not include the project path.
+        sig_pythonpath_changed is emitted from this method, and nowhere else,
+        on condition that _spyder_pythonpath changed.
         """
-        # Load existing path plus project path
-        old_path_dict_p = self._get_spyder_pythonpath_dict()
+        assert isinstance(user_paths, (type(None), OrderedDict))
+        assert isinstance(system_paths, (type(None), OrderedDict))
+        assert isinstance(prioritize, (type(None), bool))
 
-        # Save new path
-        if new_path_dict is not None:
-            self._save_paths(new_path_dict)
+        emit = False
 
-        # Load new path plus project path
-        new_path_dict_p = self._get_spyder_pythonpath_dict()
-
-        # Do not notify observers unless necessary
-        if new_path_dict_p != old_path_dict_p:
-            pypath = self.get_spyder_pythonpath()
-            logger.debug(f"Update Pythonpath to {pypath}")
-            self.set_conf('spyder_pythonpath', pypath)
-            self.sig_pythonpath_changed.emit(old_path_dict_p, new_path_dict_p)
+        # Don't set options unless necessary
+        if user_paths is not None and user_paths != self._user_paths:
+            logger.debug(f"Saving user paths: {user_paths}")
+            self.set_conf('user_paths', dict(user_paths))
+            self._user_paths = user_paths
+
+        if system_paths is not None and system_paths != self._system_paths:
+            logger.debug(f"Saving system paths: {system_paths}")
+            self.set_conf('system_paths', dict(system_paths))
+            self._system_paths = system_paths
+
+        if prioritize is not None and prioritize != self._prioritize:
+            logger.debug(f"Saving prioritize: {prioritize}")
+            self.set_conf('prioritize', prioritize)
+            self._prioritize = prioritize
+            emit = True
+
+        spyder_pythonpath = self.get_spyder_pythonpath()
+        if spyder_pythonpath != self._spyder_pythonpath:
+            logger.debug(f"Saving Spyder pythonpath: {spyder_pythonpath}")
+            self.set_conf('spyder_pythonpath', spyder_pythonpath)
+            self._spyder_pythonpath = spyder_pythonpath
+            emit = True
+
+        # Only emit signal if spyder_pythonpath or prioritize changed
+        if emit:
+            self.sig_pythonpath_changed.emit(
+                self._spyder_pythonpath, self._prioritize
+            )
 
     def _migrate_to_config_options(self):
         """
@@ -252,17 +217,57 @@ def _migrate_to_config_options(self):
         """
         path_file = get_conf_path('path')
         not_active_path_file = get_conf_path('not_active_path')
+        config_path = self.get_conf('path', None)
+        config_not_active_path = self.get_conf('not_active_path', None)
+        paths_in_conf_files = self.get_conf('paths_in_conf_files', None)
+        system_path = self.get_conf('system_path', None)
+
+        if (
+            not osp.isfile(path_file)
+            and not osp.isfile(not_active_path_file)
+            and config_path is not None
+            and config_not_active_path is not None
+            and paths_in_conf_files is not None
+            and system_path is not None
+        ):
+            # The configuration does not need to be updated
+            return None
 
         path = []
+        not_active_path = []
+
+        # Get path from file
         if osp.isfile(path_file):
             with open(path_file, 'r', encoding='utf-8') as f:
                 path = f.read().splitlines()
+            os.remove(path_file)
 
-        not_active_path = []
+        # Get inactive paths from file
         if osp.isfile(not_active_path_file):
             with open(not_active_path_file, 'r', encoding='utf-8') as f:
                 not_active_path = f.read().splitlines()
+            os.remove(not_active_path_file)
+
+        # Get path from config; supercedes paths from file
+        if config_path is not None:
+            path = config_path
+            self.remove_conf('path')
+
+        # Get inactive path from config; supercedes paths from file
+        if config_not_active_path is not None:
+            not_active_path = config_not_active_path
+            self.remove_conf('not_active_path')
+
+        if paths_in_conf_files is not None:
+            self.remove_conf('paths_in_conf_files')
+
+        # Get system path
+        if system_path is not None:
+            self.remove_conf('system_path')
+
+        # path config has all user and system paths; only want user paths
+        user_paths = {
+            p: p not in not_active_path for p in path if p not in system_path
+        }
 
-        self.set_conf('path', tuple(path))
-        self.set_conf('not_active_path', tuple(not_active_path))
-        self.set_conf('paths_in_conf_files', False)
+        return user_paths
diff --git a/spyder/plugins/pythonpath/plugin.py b/spyder/plugins/pythonpath/plugin.py
index 879bedd1eb9..0926fcacd46 100644
--- a/spyder/plugins/pythonpath/plugin.py
+++ b/spyder/plugins/pythonpath/plugin.py
@@ -34,21 +34,18 @@ class PythonpathManager(SpyderPluginV2):
     CONF_SECTION = NAME
     CONF_FILE = False
 
-    sig_pythonpath_changed = Signal(object, object)
+    sig_pythonpath_changed = Signal(object, bool)
     """
     This signal is emitted when there is a change in the Pythonpath handled by
     Spyder.
 
     Parameters
     ----------
-    old_path_dict: OrderedDict
-        Previous Pythonpath ordered dictionary. Its keys correspond to the
-        project, user and system paths declared by users or detected by Spyder,
-        and its values are their state (i.e. True for enabled and False for
-        disabled).
-
-    new_path_dict: OrderedDict
-        New Pythonpath dictionary.
+    new_path_list: list of str
+        New list of PYTHONPATH paths.
+
+    prioritize
+        Whether to prioritize PYTHONPATH in sys.path
 
     See Also
     --------
diff --git a/spyder/plugins/pythonpath/widgets/pathmanager.py b/spyder/plugins/pythonpath/widgets/pathmanager.py
index c04994d7657..e9344b1067d 100644
--- a/spyder/plugins/pythonpath/widgets/pathmanager.py
+++ b/spyder/plugins/pythonpath/widgets/pathmanager.py
@@ -43,20 +43,21 @@ class PathManagerToolbuttons:
     MoveToBottom = 'move_to_bottom'
     AddPath = 'add_path'
     RemovePath = 'remove_path'
+    ImportPaths = 'import_paths'
     ExportPaths = 'export_paths'
+    Prioritize = 'prioritize'
 
 
 class PathManager(QDialog, SpyderWidgetMixin):
     """Path manager dialog."""
 
     redirect_stdio = Signal(bool)
-    sig_path_changed = Signal(object)
+    sig_path_changed = Signal(object, object, bool)
 
     # This is required for our tests
     CONF_SECTION = 'pythonpath_manager'
 
-    def __init__(self, parent, path=None, project_path=None,
-                 not_active_path=None, sync=True):
+    def __init__(self, parent, sync=True):
         """Path manager dialog."""
         if PYQT5 or PYQT6:
             super().__init__(parent, class_parent=parent)
@@ -64,24 +65,11 @@ def __init__(self, parent, path=None, project_path=None,
             QDialog.__init__(self, parent)
             SpyderWidgetMixin.__init__(self, class_parent=parent)
 
-        assert isinstance(path, (tuple, type(None)))
-
         # Style
         # NOTE: This needs to be here so all buttons are styled correctly
         self.setStyleSheet(self._stylesheet)
 
-        self.path = path or ()
-        self.project_path = project_path or ()
-        self.not_active_path = not_active_path or ()
-
         self.last_path = getcwd_or_home()
-        self.original_path_dict = None
-        self.system_path = ()
-        self.user_path = []
-
-        # This is necessary to run our tests
-        if self.path:
-            self.update_paths(system_path=get_system_pythonpath())
 
         # Widgets
         self.add_button = None
@@ -91,6 +79,7 @@ def __init__(self, parent, path=None, project_path=None,
         self.movedown_button = None
         self.movebottom_button = None
         self.export_button = None
+        self.prioritize_button = None
         self.user_header = None
         self.project_header = None
         self.system_header = None
@@ -143,9 +132,6 @@ def __init__(self, parent, path=None, project_path=None,
         self.bbox.accepted.connect(self.accept)
         self.bbox.rejected.connect(self.reject)
 
-        # Setup
-        self.setup()
-
     # ---- Private methods
     # -------------------------------------------------------------------------
     def _add_buttons_to_layout(self, widgets, layout):
@@ -185,32 +171,41 @@ def _setup_right_toolbar(self):
             tip=_('Remove path'),
             icon=self.create_icon('editclear'),
             triggered=lambda x: self.remove_path())
+        self.import_button = self.create_toolbutton(
+            PathManagerToolbuttons.ImportPaths,
+            tip=_('Import from PYTHONPATH environment variable'),
+            icon=self.create_icon('fileimport'),
+            triggered=lambda x: self.import_paths())
         self.export_button = self.create_toolbutton(
             PathManagerToolbuttons.ExportPaths,
             icon=self.create_icon('fileexport'),
             triggered=self.export_pythonpath,
             tip=_("Export to PYTHONPATH environment variable"))
+        self.prioritize_button = self.create_toolbutton(
+            PathManagerToolbuttons.Prioritize,
+            option='prioritize',
+            triggered=self.refresh,
+        )
+        self.prioritize_button.setCheckable(True)
 
         self.selection_widgets = [self.movetop_button, self.moveup_button,
                                   self.movedown_button, self.movebottom_button]
         return (
             [self.add_button, self.remove_button] +
-            self.selection_widgets + [self.export_button]
+            self.selection_widgets + [self.import_button, self.export_button] +
+            [self.prioritize_button]
         )
 
-    def _create_item(self, path):
+    def _create_item(self, path, active):
         """Helper to create a new list item."""
         item = QListWidgetItem(path)
 
-        if path in self.project_path:
+        if path in self.project_paths:
             item.setFlags(Qt.NoItemFlags | Qt.ItemIsUserCheckable)
             item.setCheckState(Qt.Checked)
-        elif path in self.not_active_path:
-            item.setFlags(item.flags() | Qt.ItemIsUserCheckable)
-            item.setCheckState(Qt.Unchecked)
         else:
             item.setFlags(item.flags() | Qt.ItemIsUserCheckable)
-            item.setCheckState(Qt.Checked)
+            item.setCheckState(Qt.Checked if active else Qt.Unchecked)
 
         return item
 
@@ -259,6 +254,23 @@ def _stylesheet(self):
 
         return css.toString()
 
+    def _setup_system_paths(self, paths):
+        """Add system paths, creating system header if necessary"""
+        if not paths:
+            return
+
+        if not self.system_header:
+            self.system_header, system_widget = (
+                self._create_header(_("System PYTHONPATH"))
+            )
+            self.headers.append(self.system_header)
+            self.listwidget.addItem(self.system_header)
+            self.listwidget.setItemWidget(self.system_header, system_widget)
+
+        for path, active in paths.items():
+            item = self._create_item(path, active)
+            self.listwidget.addItem(item)
+
     # ---- Public methods
     # -------------------------------------------------------------------------
     @property
@@ -267,9 +279,9 @@ def editable_bottom_row(self):
         bottom_row = 0
 
         if self.project_header:
-            bottom_row += len(self.project_path) + 1
+            bottom_row += len(self.project_paths) + 1
         if self.user_header:
-            bottom_row += len(self.user_path)
+            bottom_row += len(self.get_user_paths())
 
         return bottom_row
 
@@ -279,7 +291,7 @@ def editable_top_row(self):
         top_row = 0
 
         if self.project_header:
-            top_row += len(self.project_path) + 1
+            top_row += len(self.project_paths) + 1
         if self.user_header:
             top_row += 1
 
@@ -294,7 +306,7 @@ def setup(self):
         self.system_header = None
 
         # Project path
-        if self.project_path:
+        if self.project_paths:
             self.project_header, project_widget = (
                 self._create_header(_("Project path"))
             )
@@ -302,12 +314,12 @@ def setup(self):
             self.listwidget.addItem(self.project_header)
             self.listwidget.setItemWidget(self.project_header, project_widget)
 
-            for path in self.project_path:
-                item = self._create_item(path)
+            for path, active in self.project_paths.items():
+                item = self._create_item(path, active)
                 self.listwidget.addItem(item)
 
         # Paths added by the user
-        if self.user_path:
+        if self.user_paths:
             self.user_header, user_widget = (
                 self._create_header(_("User paths"))
             )
@@ -315,25 +327,17 @@ def setup(self):
             self.listwidget.addItem(self.user_header)
             self.listwidget.setItemWidget(self.user_header, user_widget)
 
-            for path in self.user_path:
-                item = self._create_item(path)
+            for path, active in self.user_paths.items():
+                item = self._create_item(path, active)
                 self.listwidget.addItem(item)
 
-        # System path
-        if self.system_path:
-            self.system_header, system_widget = (
-                self._create_header(_("System PYTHONPATH"))
-            )
-            self.headers.append(self.system_header)
-            self.listwidget.addItem(self.system_header)
-            self.listwidget.setItemWidget(self.system_header, system_widget)
+        # System paths
+        self._setup_system_paths(self.system_paths)
 
-            for path in self.system_path:
-                item = self._create_item(path)
-                self.listwidget.addItem(item)
+        # Prioritize
+        self.prioritize_button.setChecked(self.prioritize)
 
         self.listwidget.setCurrentRow(0)
-        self.original_path_dict = self.get_path_dict()
         self.refresh()
 
     @Slot()
@@ -341,6 +345,15 @@ def export_pythonpath(self):
         """
         Export to PYTHONPATH environment variable
         Only apply to: current user.
+
+        If the user chooses to clear the contents of the system PYTHONPATH,
+        then the active user paths are prepended to active system paths and
+        the resulting list is saved to the system PYTHONPATH. Inactive system
+        paths are discarded. If the user chooses not to clear the contents of
+        the system PYTHONPATH, then the new system PYTHONPATH comprises the
+        inactive system paths + active user paths + active system paths, and
+        inactive system paths remain inactive. With either choice, inactive
+        user paths are retained in the user paths and remain inactive.
         """
         answer = QMessageBox.question(
             self,
@@ -358,77 +371,87 @@ def export_pythonpath(self):
         if answer == QMessageBox.Cancel:
             return
 
-        env = get_user_env()
+        user_paths = self.get_user_paths()
+        active_user_paths = OrderedDict({p: v for p, v in user_paths.items() if v})
+        new_user_paths = OrderedDict({p: v for p, v in user_paths.items() if not v})
 
-        # This doesn't include the project path because it's a transient
-        # directory, i.e. only used in Spyder and during specific
-        # circumstances.
-        active_path = [k for k, v in self.get_path_dict().items() if v]
+        system_paths = self.get_system_paths()
+        active_system_paths = OrderedDict({p: v for p, v in system_paths.items() if v})
+        inactive_system_paths = OrderedDict({p: v for p, v in system_paths.items() if not v})
 
-        if answer == QMessageBox.Yes:
-            ppath = active_path
-        else:
-            ppath = env.get('PYTHONPATH', [])
-            if not isinstance(ppath, list):
-                ppath = [ppath]
+        # Desired behavior is active_user | active_system, but Python 3.8 does
+        # not support | operator for OrderedDict.
+        new_system_paths = OrderedDict(reversed(active_system_paths.items()))
+        new_system_paths.update(reversed(active_user_paths.items()))
+        if answer == QMessageBox.No:
+            # Desired behavior is inactive_system | active_user | active_system
+            new_system_paths.update(reversed(inactive_system_paths.items()))
+        new_system_paths = OrderedDict(reversed(new_system_paths.items()))
 
-            ppath = [p for p in ppath if p not in active_path]
-            ppath = ppath + active_path
+        env = get_user_env()
+        env['PYTHONPATH'] = list(new_system_paths.keys())
+        set_user_env(env, parent=self)
 
-        os.environ['PYTHONPATH'] = os.pathsep.join(ppath)
+        self.update_paths(
+            user_paths=new_user_paths, system_paths=new_system_paths
+        )
 
-        # Update widget so changes are reflected on it immediately
-        self.update_paths(system_path=tuple(ppath))
-        self.set_conf('system_path', tuple(ppath))
-        self.setup()
+    def get_user_paths(self):
+        """Get current user paths as displayed on listwidget."""
+        paths = OrderedDict()
 
-        env['PYTHONPATH'] = list(ppath)
-        set_user_env(env, parent=self)
+        if self.user_header is None:
+            return paths
 
-    def get_path_dict(self, project_path=False):
-        """
-        Return an ordered dict with the path entries as keys and the active
-        state as the value.
+        start = self.listwidget.row(self.user_header) + 1
+        stop = self.listwidget.count()
+        if self.system_header is not None:
+            stop = self.listwidget.row(self.system_header)
 
-        If `project_path` is True, its entries are also included.
-        """
-        odict = OrderedDict()
-        for row in range(self.listwidget.count()):
+        for row in range(start, stop):
             item = self.listwidget.item(row)
-            path = item.text()
-            if item not in self.headers:
-                if path in self.project_path and not project_path:
-                    continue
-                odict[path] = item.checkState() == Qt.Checked
-
-        return odict
-
-    def get_user_path(self):
-        """Get current user path as displayed on listwidget."""
-        user_path = []
-        for row in range(self.listwidget.count()):
+            paths.update({item.text(): item.checkState() == Qt.Checked})
+
+        return paths
+
+    def get_system_paths(self):
+        """Get current system paths as displayed on listwidget."""
+        paths = OrderedDict()
+
+        if self.system_header is None:
+            return paths
+
+        start = self.listwidget.row(self.system_header) + 1
+        for row in range(start, self.listwidget.count()):
             item = self.listwidget.item(row)
-            path = item.text()
-            if item not in self.headers:
-                if path not in (self.project_path + self.system_path):
-                    user_path.append(path)
-
-        return user_path
-
-    def update_paths(self, path=None, not_active_path=None, system_path=None):
-        """Update path attributes."""
-        if path is not None:
-            self.path = path
-        if not_active_path is not None:
-            self.not_active_path = not_active_path
-        if system_path is not None:
-            self.system_path = system_path
-
-        previous_system_path = self.get_conf('system_path', ())
-        self.user_path = [
-            path for path in self.path
-            if path not in (self.system_path + previous_system_path)
-        ]
+            paths.update({item.text(): item.checkState() == Qt.Checked})
+
+        return paths
+
+    def update_paths(
+        self,
+        project_paths=None,
+        user_paths=None,
+        system_paths=None,
+        prioritize=None
+    ):
+        """Update path attributes.
+
+        These attributes should only be set in this method and upon activating
+        the dialog. They should remain fixed while the dialog is active and are
+        used to compare with what is shown in the listwidget in order to detect
+        changes.
+        """
+        if project_paths is not None:
+            self.project_paths = project_paths
+        if user_paths is not None:
+            self.user_paths = user_paths
+        if system_paths is not None:
+            self.system_paths = system_paths
+        if prioritize is not None:
+            self.prioritize = prioritize
+
+        self.setup()
 
     def refresh(self):
         """Refresh toolbar widgets."""
@@ -462,15 +485,24 @@ def refresh(self):
 
         # Enable remove button only for user paths
         self.remove_button.setEnabled(
-            not current_item in self.headers
+            current_item not in self.headers
             and (self.editable_top_row <= row <= self.editable_bottom_row)
         )
 
+        if self.prioritize_button.isChecked():
+            self.prioritize_button.setIcon(self.create_icon('prepend'))
+            self.prioritize_button.setToolTip(_("Paths are prepended to sys.path"))
+        else:
+            self.prioritize_button.setIcon(self.create_icon('append'))
+            self.prioritize_button.setToolTip(_("Paths are appended to sys.path"))
+
         self.export_button.setEnabled(self.listwidget.count() > 0)
 
         # Ok button only enabled if actual changes occur
         self.button_ok.setEnabled(
-            self.original_path_dict != self.get_path_dict()
+            self.user_paths != self.get_user_paths()
+            or self.system_paths != self.get_system_paths()
+            or self.prioritize != self.prioritize_button.isChecked()
         )
 
     @Slot()
@@ -491,7 +523,7 @@ def add_path(self, directory=None):
         directory = osp.abspath(directory)
         self.last_path = directory
 
-        if directory in self.get_path_dict():
+        if directory in self.get_user_paths():
             item = self.listwidget.findItems(directory, Qt.MatchExactly)[0]
             item.setCheckState(Qt.Checked)
             answer = QMessageBox.question(
@@ -499,7 +531,7 @@ def add_path(self, directory=None):
                 _("Add path"),
                 _("This directory is already included in the list."
                   "<br> "
-                  "Do you want to move it to the top of it?"),
+                  "Do you want to move it to the top of the list?"),
                 QMessageBox.Yes | QMessageBox.No)
 
             if answer == QMessageBox.Yes:
@@ -524,11 +556,9 @@ def add_path(self, directory=None):
                     )
 
                 # Add new path
-                item = self._create_item(directory)
+                item = self._create_item(directory, True)
                 self.listwidget.insertItem(self.editable_top_row, item)
                 self.listwidget.setCurrentRow(self.editable_top_row)
-
-                self.user_path.insert(0, directory)
             else:
                 answer = QMessageBox.warning(
                     self,
@@ -565,15 +595,11 @@ def remove_path(self, force=False):
                     QMessageBox.Yes | QMessageBox.No)
 
             if force or answer == QMessageBox.Yes:
-                # Remove current item from user_path
-                item = self.listwidget.currentItem()
-                self.user_path.remove(item.text())
-
                 # Remove selected item from view
                 self.listwidget.takeItem(self.listwidget.currentRow())
 
                 # Remove user header if there are no more user paths
-                if len(self.user_path) == 0:
+                if len(self.get_user_paths()) == 0:
                     self.listwidget.takeItem(
                         self.listwidget.row(self.user_header)
                     )
@@ -583,6 +609,33 @@ def remove_path(self, force=False):
                 # Refresh widget
                 self.refresh()
 
+    @Slot()
+    def import_paths(self):
+        """Import PYTHONPATH from environment."""
+        current_system_paths = self.get_system_paths()
+        system_paths = get_system_pythonpath()
+
+        # Inherit active state from current system paths
+        system_paths = OrderedDict(
+            {p: current_system_paths.get(p, True) for p in system_paths}
+        )
+
+        # Remove system paths
+        if self.system_header:
+            header_row = self.listwidget.row(self.system_header)
+            for row in range(self.listwidget.count(), header_row, -1):
+                self.listwidget.takeItem(row)
+
+            # Also remove system header
+            if not system_paths:
+                self.listwidget.takeItem(header_row)
+                self.headers.remove(self.system_header)
+                self.system_header = None
+
+        self._setup_system_paths(system_paths)
+
+        self.refresh()
+
     def move_to(self, absolute=None, relative=None):
         """Move items of list widget."""
         index = self.listwidget.currentRow()
@@ -599,7 +652,6 @@ def move_to(self, absolute=None, relative=None):
         self.listwidget.insertItem(new_index, item)
         self.listwidget.setCurrentRow(new_index)
 
-        self.user_path = self.get_user_path()
         self.refresh()
 
     def current_row(self):
@@ -626,28 +678,21 @@ def count(self):
 
     # ---- Qt methods
     # -------------------------------------------------------------------------
-    def _update_system_path(self):
-        """
-        Request to update path values on main window if current and previous
-        system paths are different.
-        """
-        if self.system_path != self.get_conf('system_path', default=()):
-            self.sig_path_changed.emit(self.get_path_dict())
-        self.set_conf('system_path', self.system_path)
-
     def accept(self):
         """Override Qt method."""
-        path_dict = self.get_path_dict()
-        if self.original_path_dict != path_dict:
-            self.sig_path_changed.emit(path_dict)
+        self.sig_path_changed.emit(
+            self.get_user_paths(),
+            self.get_system_paths(),
+            self.prioritize_button.isChecked()
+        )
         super().accept()
 
     def reject(self):
-        self._update_system_path()
+        # ??? Do we need this?
         super().reject()
 
     def closeEvent(self, event):
-        self._update_system_path()
+        # ??? Do we need this?
         super().closeEvent(event)
 
 
@@ -658,12 +703,25 @@ def test():
     _ = qapplication()
     dlg = PathManager(
         None,
-        path=tuple(sys.path[:1]),
-        project_path=tuple(sys.path[-2:]),
+    )
+    dlg.update_paths(
+        user_paths={p: True for p in sys.path[1:-2]},
+        project_paths={p: True for p in sys.path[:1]},
+        system_paths={p: True for p in sys.path[-2:]},
+        prioritize=False
     )
 
-    def callback(path_dict):
-        sys.stdout.write(str(path_dict))
+    def callback(user_paths, system_paths, prioritize):
+        sys.stdout.write(f"Prioritize: {prioritize}")
+        sys.stdout.write("\n---- User paths ----\n")
+        sys.stdout.write(
+            '\n'.join([f'{k}: {v}' for k, v in user_paths.items()])
+        )
+        sys.stdout.write("\n---- System paths ----\n")
+        sys.stdout.write(
+            '\n'.join([f'{k}: {v}' for k, v in system_paths.items()])
+        )
+        sys.stdout.write('\n')
 
     dlg.sig_path_changed.connect(callback)
     sys.exit(dlg.exec_())
diff --git a/spyder/plugins/pythonpath/widgets/tests/test_pathmanager.py b/spyder/plugins/pythonpath/widgets/tests/test_pathmanager.py
index f6e73a0e384..c8010e091a2 100644
--- a/spyder/plugins/pythonpath/widgets/tests/test_pathmanager.py
+++ b/spyder/plugins/pythonpath/widgets/tests/test_pathmanager.py
@@ -8,6 +8,7 @@
 Tests for pathmanager.py
 """
 # Standard library imports
+from collections import OrderedDict
 import sys
 import os
 
@@ -17,7 +18,9 @@
 from qtpy.QtWidgets import QMessageBox, QPushButton
 
 # Local imports
+from spyder.utils.environ import get_user_env, set_user_env
 from spyder.utils.programs import is_module_installed
+from spyder.utils.tests.conftest import restore_user_env
 from spyder.plugins.pythonpath.utils import check_path
 from spyder.plugins.pythonpath.widgets import pathmanager as pathmanager_mod
 
@@ -25,29 +28,57 @@
 @pytest.fixture
 def pathmanager(qtbot, request):
     """Set up PathManager."""
-    path, project_path, not_active_path = request.param
-    widget = pathmanager_mod.PathManager(
-        None,
-        path=tuple(path),
-        project_path=tuple(project_path),
-        not_active_path=tuple(not_active_path))
+    user_paths, project_paths, system_paths = request.param
+
+    widget = pathmanager_mod.PathManager(None)
+    widget.update_paths(
+        user_paths=OrderedDict({p: True for p in user_paths}),
+        project_paths=OrderedDict({p: True for p in project_paths}),
+        system_paths=OrderedDict({p: True for p in system_paths}),
+        prioritize=False
+    )
     widget.show()
     qtbot.addWidget(widget)
     return widget
 
 
-@pytest.mark.parametrize('pathmanager',
-                         [(sys.path[:-10], sys.path[-10:], ())],
-                         indirect=True)
-def test_pathmanager(pathmanager, qtbot):
+@pytest.mark.parametrize(
+    'pathmanager', [(sys.path[:-10], sys.path[-10:], ())], indirect=True
+)
+def test_pathmanager(qtbot, pathmanager):
     """Run PathManager test"""
     pathmanager.show()
     assert pathmanager
 
 
-@pytest.mark.parametrize('pathmanager',
-                         [(sys.path[:-10], sys.path[-10:], ())],
-                         indirect=True)
+@pytest.mark.parametrize('pathmanager', [((), (), ())], indirect=True)
+def test_import_PYTHONPATH(qtbot, pathmanager, tmp_path, restore_user_env):
+    """
+    Test that PYTHONPATH is imported.
+    """
+
+    # Add a directory to PYTHONPATH environment variable
+    sys_dir = tmp_path / 'sys_dir'
+    sys_dir.mkdir()
+    set_user_env({"PYTHONPATH": str(sys_dir)})
+
+    # Open Pythonpath dialog
+    pathmanager.show()
+    qtbot.wait(500)
+
+    assert len(pathmanager.headers) == 0
+    assert pathmanager.get_system_paths() == OrderedDict()
+
+    # Import PYTHONPATH from environment
+    pathmanager.import_paths()
+    assert len(pathmanager.headers) == 1
+
+    assert pathmanager.get_system_paths() == OrderedDict({str(sys_dir): True})
+
+
+@pytest.mark.parametrize(
+    'pathmanager', [(sys.path[:-10], sys.path[-10:], ())], indirect=True
+)
 def test_check_uncheck_path(pathmanager):
     """
     Test that checking and unchecking a path in the PathManager correctly
@@ -60,20 +91,16 @@ def test_check_uncheck_path(pathmanager):
             assert item.checkState() == Qt.Checked
 
 
-@pytest.mark.skipif(os.name != 'nt' or not is_module_installed('win32con'),
-                    reason=("This feature is not applicable for Unix "
-                            "systems and pywin32 is needed"))
-@pytest.mark.parametrize('pathmanager',
-                         [(['p1', 'p2', 'p3'], ['p4', 'p5', 'p6'], [])],
-                         indirect=True)
-def test_export_to_PYTHONPATH(pathmanager, mocker):
-    # Import here to prevent an ImportError when testing on unix systems
-    from spyder.utils.environ import (get_user_env, set_user_env,
-                                      listdict2envdict)
-
-    # Store PYTHONPATH original state
-    env = get_user_env()
-    original_pathlist = env.get('PYTHONPATH', [])
+@pytest.mark.skipif(
+    os.name != 'nt' or not is_module_installed('win32con'),
+    reason=("This feature is not applicable for Unix "
+            "systems and pywin32 is needed")
+)
+@pytest.mark.parametrize(
+    'pathmanager', [(['p1', 'p2', 'p3'], ['p4', 'p5', 'p6'], [])],
+    indirect=True
+)
+def test_export_to_PYTHONPATH(pathmanager, mocker, restore_user_env):
 
     # Mock the dialog window and answer "Yes" to clear contents of PYTHONPATH
     # before adding Spyder's path list
@@ -107,14 +134,10 @@ def test_export_to_PYTHONPATH(pathmanager, mocker):
     env = get_user_env()
     assert env['PYTHONPATH'] == expected_pathlist
 
-    # Restore PYTHONPATH to its original state
-    env['PYTHONPATH'] = original_pathlist
-    set_user_env(listdict2envdict(env))
 
-
-@pytest.mark.parametrize('pathmanager',
-                         [(sys.path[:-10], sys.path[-10:], ())],
-                         indirect=True)
+@pytest.mark.parametrize(
+    'pathmanager', [(sys.path[:-10], sys.path[-10:], ())], indirect=True
+)
 def test_invalid_directories(qtbot, pathmanager):
     """Check [site/dist]-packages are invalid paths."""
     if os.name == 'nt':
@@ -137,9 +160,9 @@ def interact_message_box():
         pathmanager.add_path(path)
 
 
-@pytest.mark.parametrize('pathmanager',
-                         [(('/spam', '/bar'), ('/foo', ), ())],
-                         indirect=True)
+@pytest.mark.parametrize(
+    'pathmanager', [(('/spam', '/bar'), ('/foo', ), ())], indirect=True
+)
 def test_remove_item_and_reply_no(qtbot, pathmanager):
     """Check that the item is not removed after answering 'No'."""
     pathmanager.show()
@@ -163,9 +186,9 @@ def interact_message_box():
     assert pathmanager.count() == count
 
 
-@pytest.mark.parametrize('pathmanager',
-                         [(('/spam', '/bar'), ('/foo', ), ())],
-                         indirect=True)
+@pytest.mark.parametrize(
+    'pathmanager', [(('/spam', '/bar'), ('/foo', ), ())], indirect=True
+)
 def test_remove_item_and_reply_yes(qtbot, pathmanager):
     """Check that the item is indeed removed after answering 'Yes'."""
     pathmanager.show()
@@ -190,9 +213,7 @@ def interact_message_box():
     assert pathmanager.count() == (count - 1)
 
 
-@pytest.mark.parametrize('pathmanager',
-                         [((), (), ())],
-                         indirect=True)
+@pytest.mark.parametrize('pathmanager', [((), (), ())], indirect=True)
 def test_add_repeated_item(qtbot, pathmanager, tmpdir):
     """
     Check behavior when an unchecked item that is already on the list is added.
@@ -207,7 +228,7 @@ def test_add_repeated_item(qtbot, pathmanager, tmpdir):
     pathmanager.add_path(dir2)
     pathmanager.add_path(dir3)
     pathmanager.set_row_check_state(2, Qt.Unchecked)
-    assert not all(pathmanager.get_path_dict().values())
+    assert not all(pathmanager.get_user_paths().values())
 
     def interact_message_box():
         messagebox = pathmanager.findChild(QMessageBox)
@@ -222,17 +243,17 @@ def interact_message_box():
     timer.timeout.connect(interact_message_box)
     timer.start(500)
     pathmanager.add_path(dir2)
-    print(pathmanager.get_path_dict())
+    print(pathmanager.get_user_paths())
 
     # Back to main thread
     assert pathmanager.count() == 4
-    assert list(pathmanager.get_path_dict().keys())[0] == dir2
-    assert all(pathmanager.get_path_dict().values())
+    assert list(pathmanager.get_user_paths().keys())[0] == dir2
+    assert all(pathmanager.get_user_paths().values())
 
 
-@pytest.mark.parametrize('pathmanager',
-                         [(('/spam', '/bar'), ('/foo', ), ())],
-                         indirect=True)
+@pytest.mark.parametrize(
+    'pathmanager', [(('/spam', '/bar'), ('/foo', ), ())], indirect=True
+)
 def test_buttons_state(qtbot, pathmanager, tmpdir):
     """Check buttons are enabled/disabled based on items and position."""
     pathmanager.show()
@@ -277,6 +298,14 @@ def test_buttons_state(qtbot, pathmanager, tmpdir):
     pathmanager.remove_path(True)
     assert not pathmanager.button_ok.isEnabled()
 
+    # Check prioritize button
+    assert pathmanager.prioritize_button.isEnabled()
+    assert not pathmanager.prioritize_button.isChecked()
+    pathmanager.prioritize_button.animateClick()
+    qtbot.waitUntil(pathmanager.prioritize_button.isChecked)
+    assert pathmanager.prioritize_button.isChecked()
+    assert pathmanager.button_ok.isEnabled()
+
 
 if __name__ == "__main__":
     pytest.main([os.path.basename(__file__)])
diff --git a/spyder/utils/environ.py b/spyder/utils/environ.py
index 5b1d36606ed..74c9ea3b388 100644
--- a/spyder/utils/environ.py
+++ b/spyder/utils/environ.py
@@ -27,7 +27,9 @@
 from qtpy.QtWidgets import QMessageBox
 
 # Local imports
-from spyder.config.base import _, running_in_ci, get_conf_path
+from spyder.config.base import (
+    _, running_in_ci, get_conf_path, running_under_pytest
+)
 from spyder.widgets.collectionseditor import CollectionsEditor
 from spyder.utils.icon_manager import ima
 from spyder.utils.programs import run_shell_command
@@ -111,7 +113,7 @@ def get_user_environment_variables():
         # We only need to do this if Spyder was **not** launched from a
         # terminal. Otherwise, it'll inherit the env vars present in it.
         # Fixes spyder-ide/spyder#22415
-        if not launched_from_terminal:
+        if not launched_from_terminal or running_under_pytest():
             try:
                 user_env_script = _get_user_env_script()
                 proc = run_shell_command(user_env_script, env={}, text=True)
diff --git a/spyder/utils/icon_manager.py b/spyder/utils/icon_manager.py
index 9289d879a48..e0a1373121c 100644
--- a/spyder/utils/icon_manager.py
+++ b/spyder/utils/icon_manager.py
@@ -288,6 +288,8 @@ def __init__(self):
             '1uparrow':                [('mdi.arrow-up',), {'color': self.MAIN_FG_COLOR}],
             '2downarrow':              [('mdi.arrow-collapse-down',), {'color': self.MAIN_FG_COLOR}],
             '1downarrow':              [('mdi.arrow-down',), {'color': self.MAIN_FG_COLOR}],
+            'prepend':                 [('mdi.arrow-collapse-left',), {'color': self.MAIN_FG_COLOR}],
+            'append':                  [('mdi.arrow-collapse-right',), {'color': self.MAIN_FG_COLOR}],
             'undock':                  [('mdi.open-in-new',), {'color': self.MAIN_FG_COLOR}],
             'close_pane':              [('mdi.window-close',), {'color': self.MAIN_FG_COLOR}],
             'toolbar_ext_button':      [('mdi.dots-horizontal',), {'color': self.MAIN_FG_COLOR}],
diff --git a/spyder/utils/tests/conftest.py b/spyder/utils/tests/conftest.py
new file mode 100644
index 00000000000..361d6442845
--- /dev/null
+++ b/spyder/utils/tests/conftest.py
@@ -0,0 +1,31 @@
+#!/usr/bin/env python3
+# -*- coding: utf-8 -*-
+
+# Standard library imports
+import os
+
+# Third-party imports
+import pytest
+
+# Local imports
+from spyder.config.base import running_in_ci
+from spyder.utils.environ import (
+    get_user_env, set_user_env, amend_user_shell_init
+)
+
+
+@pytest.fixture
+def restore_user_env():
+    """Set user environment variables and restore upon test exit"""
+    if not running_in_ci():
+        pytest.skip("Skipped because not in CI.")
+
+    if os.name == "nt":
+        orig_env = get_user_env()
+
+    yield
+
+    if os.name == "nt":
+        set_user_env(orig_env)
+    else:
+        amend_user_shell_init(restore=True)
diff --git a/spyder/utils/tests/test_environ.py b/spyder/utils/tests/test_environ.py
index 277f2418be6..d4f771d9848 100644
--- a/spyder/utils/tests/test_environ.py
+++ b/spyder/utils/tests/test_environ.py
@@ -18,15 +18,15 @@
 from qtpy.QtCore import QTimer
 
 # Local imports
-from spyder.utils.environ import (get_user_environment_variables,
-                                  UserEnvDialog, amend_user_shell_init)
+from spyder.utils.environ import (
+    get_user_environment_variables, UserEnvDialog, amend_user_shell_init
+)
 from spyder.utils.test import close_message_box
-from spyder.app.tests.conftest import restore_user_env
 
 
 @pytest.fixture
 def environ_dialog(qtbot):
-    "Setup the Environment variables Dialog."
+    """Setup the Environment variables Dialog."""
     QTimer.singleShot(1000, lambda: close_message_box(qtbot))
     dialog = UserEnvDialog()
     qtbot.addWidget(dialog)
@@ -44,8 +44,10 @@ def test_get_user_environment_variables():
 
 @pytest.mark.skipif(os.name == "nt", reason="Does not apply to Windows")
 def test_get_user_env_newline(restore_user_env):
-    # Test variable value with newline characters.
-    # Regression test for spyder-ide#20097
+    """
+    Test variable value with newline characters.
+    Regression test for spyder-ide#20097.
+    """
     text = "myfunc() {  echo hello;\n echo world\n}\nexport -f myfunc"
     amend_user_shell_init(text)
     user_env = get_user_environment_variables()