diff --git a/META-INF/RASCAL.MF b/META-INF/RASCAL.MF
index d3977080a63..c43531825ba 100644
--- a/META-INF/RASCAL.MF
+++ b/META-INF/RASCAL.MF
@@ -1,5 +1,5 @@
 Project-Name: rascal
-Source: src/org/rascalmpl/library,test/org/rascalmpl/benchmark,test//org/rascalmpl/test/data
+Source: src/org/rascalmpl/library,src/org/rascalmpl/typepal,test/org/rascalmpl/benchmark,test//org/rascalmpl/test/data
 Courses: src/org/rascalmpl/courses
 
 
diff --git a/src/org/rascalmpl/library/util/PathConfig.java b/src/org/rascalmpl/library/util/PathConfig.java
index 56c205af84c..2e2b87d5301 100644
--- a/src/org/rascalmpl/library/util/PathConfig.java
+++ b/src/org/rascalmpl/library/util/PathConfig.java
@@ -18,6 +18,7 @@
 import java.util.HashMap;
 import java.util.List;
 import java.util.Map;
+import java.util.function.Predicate;
 import java.util.jar.Manifest;
 
 import org.rascalmpl.interpreter.Configuration;
@@ -26,6 +27,7 @@
 import org.rascalmpl.uri.URIResolverRegistry;
 import org.rascalmpl.uri.URIUtil;
 import org.rascalmpl.uri.file.MavenRepositoryURIResolver;
+import org.rascalmpl.uri.jar.JarURIResolver;
 import org.rascalmpl.values.IRascalValueFactory;
 import org.rascalmpl.values.ValueFactoryFactory;
 
@@ -635,15 +637,22 @@ else if (rascalProject != null) {
             messages.append(Messages.error(e.getMessage(), getRascalMfLocation(manifestRoot)));
         }
 
+        try {
+            addRascalToSourcePath(srcsWriter);
+        } catch (IOException e) {
+            messages.append(Messages.error(e.getMessage(), getRascalMfLocation(manifestRoot)));
+        }
 
-        for (String srcName : manifest.getSourceRoots(manifestRoot)) {
-            var srcFolder = URIUtil.getChildLocation(manifestRoot, srcName);
-            
-            if (!reg.exists(srcFolder) || !reg.isDirectory(srcFolder)) {
-                messages.append(Messages.error("Source folder " + srcFolder + " does not exist.", getRascalMfLocation(rascalProject)));
-            }
+        if (!projectName.equals("rascal")) { // Don't add `rascal` again
+            for (String srcName : manifest.getSourceRoots(manifestRoot)) {
+                var srcFolder = URIUtil.getChildLocation(manifestRoot, srcName);
+                
+                if (!reg.exists(srcFolder) || !reg.isDirectory(srcFolder)) {
+                    messages.append(Messages.error("Source folder " + srcFolder + " does not exist.", getRascalMfLocation(rascalProject)));
+                }
 
-            srcsWriter.append(srcFolder);
+                srcsWriter.append(srcFolder);
+            }
         }
         
         return new PathConfig(
@@ -655,6 +664,65 @@ else if (rascalProject != null) {
                 messages.done());
     }
 
+    /**
+     * Adds the source folders of the `rascal` project to `srcsWriter`.
+     *
+     * For each source folder, there are at most two version to choose from:
+     *   - The version in the "current" `rascal` (as per
+     *     `resolveCurrentRascalRuntimeJar()`). Alway available.
+     *   - The version in the "other" `rascal` (as per the
+     *     `URIResolverRegistry`). Available when `rascal` itself is the main
+     *     project, or when `rascal` is open in the workspace.
+     * 
+     * The version of each source folder of the `rascal` project to add, is
+     * chosen based on the kind of that source folder:
+     *   - Kind #1 (e.g., `.../library`, i.e., `|std:///|`): Add the version of
+     *     the source folder in the current `rascal`
+     *   - Kind #2 (e.g., `.../typepal`): Add the version of the source folder
+     *     in the other `rascal` (if available) or the current `rascal` (else)
+     *   - Kind #3 (e.g., `test/...`): Add the version of the source folder in
+     *     the other `rascal` (if available)
+     *
+     * Thus, source folders of kinds #1 and #2 are added always, while source
+     * folders of kind #3 are added only when the `rascal` project itself is
+     * being developed.
+     *
+     * @throws IOException When the current `rascal` can't be resolved
+     */
+    private static void addRascalToSourcePath(IListWriter srcsWriter) throws IOException {
+        var currentRascalTargetClasses = JarURIResolver.jarify(resolveCurrentRascalRuntimeJar());
+
+        // Assumption: If `rascal` itself is the main project, or if `rascal` is
+        // open in the workspace, then its root folder has already been
+        // registered as `|project://rascal/|` in the resolver registry (so
+        // checking the project name isn't needed after checking the registry).
+        var otherRascal = URIUtil.correctLocation("project", "rascal", "");
+        var otherRascalExists = URIResolverRegistry.getInstance().exists(otherRascal);
+
+        // Include source folders of kind #1
+        srcsWriter.append(URIUtil.rootLocation("std"));
+
+        // Include source folders of kind #2
+        if (otherRascalExists) {
+            srcsWriter.append(URIUtil.getChildLocation(otherRascal, "src/org/rascalmpl/typepal"));
+        } else {
+            srcsWriter.append(URIUtil.getChildLocation(currentRascalTargetClasses, "org/rascalmpl/typepal"));
+        }
+
+        // Include source folders of kind #3
+        if (otherRascalExists) {
+            Predicate<String> isKind3 = s ->
+                !s.equals("src/org/rascalmpl/library") &&
+                !s.equals("src/org/rascalmpl/typepal");
+
+            new RascalManifest()
+                .getSourceRoots(otherRascal)
+                .stream()
+                .filter(isKind3)
+                .forEach(src -> srcsWriter.append(URIUtil.getChildLocation(otherRascal, src)));
+        }
+    }
+
     private static void addLibraryToSourcePath(URIResolverRegistry reg, IListWriter srcsWriter, IListWriter messages, ISourceLocation jar) {
         if (!reg.exists(URIUtil.getChildLocation(jar, RascalManifest.META_INF_RASCAL_MF))) {
             // skip all the non Rascal libraries
@@ -788,7 +856,18 @@ private static String computeMavenCommandName() {
      */
     public void printInterpreterConfigurationStatus(PrintWriter out) {
         out.println("Module paths:");
-        getSrcs().forEach((f) -> out.println(" ".repeat(4) + f));
+        getSrcs().forEach(f -> {
+            var l = (ISourceLocation) f;
+            var s = " ".repeat(4) + l;
+            if (l.getScheme().equals("std") || l.getScheme().equals("project")) {
+                try {
+                    s += " at " + URIResolverRegistry.getInstance().logicalToPhysical(l);
+                } catch (IOException e) {
+                    s += " at unknown physical location";
+                }
+            }
+            out.println(s);
+        });
         out.println("JVM library classpath:");
         getLibsAndTarget().forEach((l) -> out.println(" ".repeat(4) + l));
         out.flush();
diff --git a/src/org/rascalmpl/typepal/Typepal.rsc b/src/org/rascalmpl/typepal/Typepal.rsc
new file mode 100644
index 00000000000..12676023bcd
--- /dev/null
+++ b/src/org/rascalmpl/typepal/Typepal.rsc
@@ -0,0 +1,5 @@
+module Typepal
+
+// TODO: This is intended to be a temporary placeholder module (useful for
+// testing `PathConfig` changes). It should be removed when `typepal` has been
+// merged into `rascal`.
\ No newline at end of file