@@ -21,6 +21,8 @@ User orchestrators remain generators, and activities retain their synchronous
 or asynchronous calling convention. Synchronous functions retain synchronous
 client bindings, and invocation logging context is preserved.
 Worker payload-size and storage errors retain their original error details.
+Activity wrappers preserve the application's source directory for
+`context.function_directory`, including when payload storage is not configured.
 
 ## v2.0.0rc1
 
 
@@ -21,7 +21,7 @@
     builtin_http_poll_orchestrator,
 )
 from ..internal.compat.activity import wrap_activity, wrap_activity_payloads
-from ..internal.invocation import wrap_invocation
+from ..internal.invocation import preserve_function_source, wrap_invocation
 from ..worker import DurableFunctionsWorker
 
 
@@ -454,6 +454,7 @@ def set_client_metadata(client_bound: Callable[..., Any]) -> None:
                     annotations[client_name] = str
                 client_bound.__annotations__ = annotations
                 setattr(client_bound, "client_function", function)
+                preserve_function_source(client_bound, function)
 
             if is_async_function:
                 @wraps(function)
 
@@ -33,6 +33,7 @@
 from azure.functions._durable_functions import df_loads
 
 from ..converters import ActivityTriggerConverter
+from ..invocation import preserve_function_source
 from ..payloads import (
     ActivityPayload,
     deexternalize_payload,
@@ -174,6 +175,7 @@ def wrap_activity(fn: Callable[..., Any], input_name: str) -> Callable[..., Any]
         if ret_ann is not inspect.Parameter.empty:
             annotations["return"] = ret_ann
     adapter.__annotations__ = annotations
+    preserve_function_source(adapter, fn)
     return adapter
 
 
@@ -222,4 +224,5 @@ def sync_wrapper(*args: Any, **kwargs: Any) -> Any:
         wrapper = sync_wrapper
 
     setattr(wrapper, "__signature__", signature)
+    preserve_function_source(wrapper, fn)
     return wrapper
@@ -11,6 +11,7 @@
 from concurrent.futures import ThreadPoolExecutor
 from contextvars import ContextVar, copy_context
 from functools import lru_cache, wraps
+from types import FunctionType
 from typing import Any, Callable, ParamSpec, TypeVar
 
 import azure.functions as func
@@ -20,6 +21,12 @@
 _Result = TypeVar("_Result")
 
 
+def preserve_function_source(wrapper: Callable[..., Any], original: Callable[..., Any]) -> None:
+    """Preserve the filename used by the Functions worker to index the app directory."""
+    if isinstance(wrapper, FunctionType) and isinstance(original, FunctionType):
+        wrapper.__code__ = wrapper.__code__.replace(co_filename=original.__code__.co_filename)
+
+
 @lru_cache(maxsize=1)
 def _fallback_executor() -> ThreadPoolExecutor:
     setting = os.environ.get("PYTHON_THREADPOOL_THREAD_COUNT")
 
@@ -4,6 +4,7 @@
 """Blob-backed payload round trips through the real Functions bindings."""
 
 import json
+from pathlib import Path
 from typing import Any
 
 import azure.functions as func
@@ -19,6 +20,7 @@
 def payload_echo(payload: dict, client: df.SyncDurableFunctionsClient, context: func.Context) -> dict:
     assert isinstance(client, df.SyncDurableFunctionsClient)
     assert context.thread_local_storage.invocation_id == context.invocation_id
+    assert json.loads((Path(context.function_directory) / "host.json").read_text())["version"] == "2.0"
     return {"data": payload["data"], "stages": [*payload["stages"], "activity"]}
 
 
@@ -32,8 +34,9 @@ def payload_roundtrip(ctx: task.OrchestrationContext, payload: dict[str, Any]):
 
 @bp.activity_trigger(input_name="payload")
 @bp.durable_client_input(client_name="client")
-async def payload_echo_async(payload: dict, client: df.DurableFunctionsClient) -> dict:
+async def payload_echo_async(payload: dict, client: df.DurableFunctionsClient, context: func.Context) -> dict:
     assert isinstance(client, df.DurableFunctionsClient)
+    assert json.loads((Path(context.function_directory) / "host.json").read_text())["version"] == "2.0"
     return {"data": payload["data"], "stages": [*payload["stages"], "activity"]}
 
 
 
@@ -32,6 +32,34 @@ def act(x):
     assert wrap_activity(act, "x") is act
 
 
+@pytest.mark.parametrize("native", [False, True])
+@pytest.mark.parametrize("user_async", [False, True])
+async def test_activity_wrappers_preserve_indexed_source_directory(monkeypatch, native, user_async):
+    monkeypatch.setattr(payloads, "_payload_store", None)
+
+    def activity(payload):
+        return payload
+
+    async def async_activity(payload):
+        return payload
+
+    def native_activity(context, payload):
+        return payload
+
+    async def async_native_activity(context, payload):
+        return payload
+
+    original = (async_native_activity if user_async else native_activity) if native else (
+        async_activity if user_async else activity)
+    adapted = wrap_activity(original, "payload")
+    wrapped = wrap_activity_payloads(adapted, "payload")
+    assert inspect.getfile(adapted) == inspect.getfile(original)
+    assert inspect.getfile(wrapped) == inspect.getfile(original)
+    assert inspect.iscoroutinefunction(wrapped) == user_async
+    result = await wrapped("value") if user_async else wrapped("value")
+    assert result == "value"
+
+
 def test_two_param_activity_is_adapted_to_single_input():
     def act(ctx, payload):
         return (ctx, payload)
 
@@ -278,7 +278,9 @@ async def async_activity(payload, client, context):
     client_decorator = app.durable_client_input(client_name="client")
     registered = (client_decorator(activity_decorator(function)) if client_outer
                   else activity_decorator(client_decorator(function)))
+    original_filename = inspect.getfile(function)
     function = registered.build().get_user_function()
+    assert inspect.getfile(function) == original_filename
     assert inspect.iscoroutinefunction(function) == user_async
     result = function(payload="result", client="{}", context=invocation)
     assert (await result if user_async else result) == "result"