diff --git a/lib/init/grass.py b/lib/init/grass.py
index 00126c662a3..a599a1acbad 100755
--- a/lib/init/grass.py
+++ b/lib/init/grass.py
@@ -2169,6 +2169,7 @@ def main() -> None:
     find_grass_python_package()
 
     from grass.app.runtime import RuntimePaths
+    from grass.script.setup import get_install_path
 
     global \
         CMD_NAME, \
@@ -2183,7 +2184,7 @@ def main() -> None:
     GRASS_VERSION = runtime_paths.version
     GRASS_VERSION_MAJOR = runtime_paths.version_major
     GRASS_VERSION_GIT = runtime_paths.grass_version_git
-    GISBASE = runtime_paths.gisbase
+    GISBASE = get_install_path(runtime_paths.gisbase)
     CONFIG_PROJSHARE = runtime_paths.config_projshare
 
     grass_config_dir = create_grass_config_dir()
diff --git a/python/grass/app/runtime.py b/python/grass/app/runtime.py
index 5290e0a2642..b34e5c0c0cf 100644
--- a/python/grass/app/runtime.py
+++ b/python/grass/app/runtime.py
@@ -78,12 +78,9 @@ def __get_dir(self, env_var):
         If the environmental variable not yet set, it is retrived and
         set from resource_paths."""
         if env_var in self.env and len(self.env[env_var]) > 0:
-            res = os.path.normpath(self.env[env_var])
-        else:
-            path = getattr(res_paths, env_var)
-            res = os.path.normpath(os.path.join(res_paths.GRASS_PREFIX, path))
-            self.env[env_var] = res
-        return res
+            return os.path.normpath(self.env[env_var])
+        path = getattr(res_paths, env_var)
+        return os.path.normpath(os.path.join(res_paths.GRASS_PREFIX, path))
 
 
 def get_grass_config_dir(*, env):
@@ -187,6 +184,9 @@ def set_executable_paths(install_path, grass_config_dir, env):
 
 def set_paths(install_path, grass_config_dir):
     """Set variables with executable paths, library paths, and other paths"""
+    # Set main prefix.
+    # See also grass.script.setup.setup_runtime_env.
+    os.environ["GISBASE"] = install_path
     set_executable_paths(
         install_path=install_path, grass_config_dir=grass_config_dir, env=os.environ
     )
diff --git a/python/grass/app/tests/grass_app_runtime.py b/python/grass/app/tests/grass_app_runtime.py
new file mode 100644
index 00000000000..af0bb4be677
--- /dev/null
+++ b/python/grass/app/tests/grass_app_runtime.py
@@ -0,0 +1,83 @@
+"""Tests of runtime setup, mostly focused on paths
+
+The install path (aka GISBASE) tests are assuming, or focusing on a non-FHS
+installation. Their potential to fail is with broken builds and installs.
+"""
+
+from pathlib import Path
+
+import pytest
+
+from grass.app.runtime import RuntimePaths
+from grass.script.setup import get_install_path
+
+
+def return_as_is(x):
+    """Return the parameter exactly as received"""
+    return x
+
+
+def test_install_path_consistent():
+    """Differently sourced install paths should be the same.
+
+    Dynamically determined install path and compile-time install path should be
+    the same in a healthy installation.
+
+    This is a non-FHS oriented test.
+    """
+    assert get_install_path() == RuntimePaths().gisbase
+
+
+@pytest.mark.parametrize("path_type", [str, Path, return_as_is])
+def test_install_path_used_as_result(path_type):
+    """Passing a valid compile-time install path should return the same path.
+
+    If the path is not recognized as install path or there is a problem with the
+    dynamic determination of the install path, the test will fail.
+
+    This is a non-FHS oriented test.
+    """
+    path = RuntimePaths().gisbase
+    assert get_install_path(path_type(path)) == path
+
+
+def test_consistent_install_path_returned():
+    """Two subsequent calls should return the same result.
+
+    The environment should not be modified by the call, so the result should
+    always be the same.
+
+    This is a non-FHS oriented test.
+    """
+    assert get_install_path() == get_install_path()
+
+
+@pytest.mark.parametrize("path_type", [str, Path, return_as_is])
+def test_feeding_output_as_input_again(path_type):
+    """Passing result of the get_install_path back to it should give the same result.
+
+    When a dynamically path gets returned by the function, the same path should be
+    the one returned again when called with that path (sort of like calling the same
+    function twice because we can't tell here if it is a newly computed path or the
+    provided path if they are the same).
+
+    We use this to test different path types.
+
+    This is a non-FHS oriented test.
+    """
+    path = get_install_path()
+    assert path == get_install_path(path_type(path))
+
+
+@pytest.mark.parametrize("path_type", [str, Path, return_as_is])
+def test_passing_non_existent_path(path_type):
+    """Passing result of the get_install_path back to it should give the same result.
+
+    When a dynamically path gets returned by the function, the same path should be
+    the one returned again when called with that path (sort of like calling the same
+    function twice because we can't tell here if it is a newly computed path or the
+    provided path if they are the same).
+
+    This is a non-FHS oriented test.
+    """
+    assert get_install_path(path_type("/does/not/exist")) == get_install_path()
diff --git a/python/grass/script/setup.py b/python/grass/script/setup.py
index 3338bed2479..b70beb3ad7f 100644
--- a/python/grass/script/setup.py
+++ b/python/grass/script/setup.py
@@ -80,6 +80,8 @@
 # is known, this would allow moving things from there, here
 # then this could even do locking
 
+from __future__ import annotations
+
 from pathlib import Path
 import datetime
 import os
@@ -109,7 +111,7 @@ def set_gui_path():
         sys.path.insert(0, gui_path)
 
 
-def get_install_path(path=None):
+def get_install_path(path: str | Path | None = None) -> str:
     """Get path to GRASS installation usable for setup of environmental variables.
 
     The function tries to determine path tp GRASS installation so that the
@@ -145,19 +147,21 @@ def ask_executable(arg):
             [arg, "--config", "path"], text=True, check=True, capture_output=True
         ).stdout.strip()
 
+    # Directory was provided as a parameter.
+    if path and os.path.isdir(path):
+        return os.fspath(path)
+
     # Executable was provided as parameter.
     if path and shutil.which(path):
         # The path was provided by the user and it is an executable
         # (on path or provided with full path), so raise exception on failure.
-        return ask_executable(path)
-
-    # Presumably directory was provided.
-    if path:
-        return path
+        path_from_executable = ask_executable(path)
+        if os.path.isdir(path_from_executable):
+            return path_from_executable
 
-    # GISBASE is already set.
+    # GISBASE is set from the outside or already set.
     env_gisbase = os.environ.get("GISBASE")
-    if env_gisbase:
+    if env_gisbase and os.path.isdir(env_gisbase):
         return env_gisbase
 
     # Executable provided in environment (name is from grass-session).
@@ -165,7 +169,9 @@ def ask_executable(arg):
     # at this point (to be re-evaluated).
     grass_bin = os.environ.get("GRASSBIN")
     if grass_bin and shutil.which(grass_bin):
-        return ask_executable(grass_bin)
+        path_from_executable = ask_executable(grass_bin)
+        if os.path.isdir(path_from_executable):
+            return path_from_executable
 
     # Derive the path from path to this file (Python module).
     # This is the standard way when there is no user-provided settings.
@@ -176,7 +182,7 @@ def ask_executable(arg):
     bin_path = install_path / "bin"
     lib_path = install_path / "lib"
     if bin_path.is_dir() and lib_path.is_dir():
-        return install_path
+        return os.fspath(install_path)
 
     # As a last resort, try running grass command if it exists.
     # This is less likely give the right result than the relative path on systems
@@ -184,9 +190,13 @@ def ask_executable(arg):
     # However, it allows for non-standard installations with standard command.
     grass_bin = "grass"
     if grass_bin and shutil.which(grass_bin):
-        return ask_executable(grass_bin)
+        path_from_executable = ask_executable(grass_bin)
+        if os.path.isdir(path_from_executable):
+            return path_from_executable
 
-    return None
+    # We fallback to whatever was provided. This may help trace the issue
+    # in broken installations.
+    return os.fspath(path) if path else path
 
 
 def setup_runtime_env(gisbase=None, *, env=None):
@@ -202,11 +212,7 @@ def setup_runtime_env(gisbase=None, *, env=None):
     If _gisbase_ is not provided, a heuristic is used to find the path to GRASS
     installation (see the :func:`get_install_path` function for details).
     """
-    if not gisbase:
-        gisbase = get_install_path()
-
-    # Accept Path objects.
-    gisbase = os.fspath(gisbase)
+    gisbase = get_install_path(gisbase)
 
     # If environment is not provided, use the global one.
     if not env:
@@ -221,7 +227,9 @@ def setup_runtime_env(gisbase=None, *, env=None):
         RuntimePaths,
     )
 
-    # Set GISBASE
+    runtime_paths = RuntimePaths(env=env)
+    # Set main prefix.
+    # See also grass.app.runtime.set_paths.
     env["GISBASE"] = gisbase
     set_executable_paths(
         install_path=gisbase,
@@ -229,7 +237,7 @@ def setup_runtime_env(gisbase=None, *, env=None):
         env=env,
     )
     set_dynamic_library_path(
-        variable_name=RuntimePaths().ld_library_path_var, install_path=gisbase, env=env
+        variable_name=runtime_paths.ld_library_path_var, install_path=gisbase, env=env
     )
     set_python_path_variable(install_path=gisbase, env=env)
     set_path_to_python_executable(env=env)