diff --git a/crates/bevy_asset/src/io/embedded/mod.rs b/crates/bevy_asset/src/io/embedded/mod.rs
index 0448a7cdd83a7..de583f7367831 100644
--- a/crates/bevy_asset/src/io/embedded/mod.rs
+++ b/crates/bevy_asset/src/io/embedded/mod.rs
@@ -111,13 +111,30 @@ macro_rules! embedded_path {
     }};
 
     ($source_path: expr, $path_str: expr) => {{
-        let crate_name = module_path!().split(':').next().unwrap();
-        let after_src = file!().split($source_path).nth(1).unwrap();
-        let file_path = std::path::Path::new(after_src)
-            .parent()
-            .unwrap()
-            .join($path_str);
-        std::path::Path::new(crate_name).join(file_path)
+        let Some(crate_name) = module_path!().split(':').next() else {
+            panic!(
+                "Could not find crate name. Expected ':' in module path `{}`",
+                module_path!()
+            );
+        };
+        if let Some(after_src) = file!().split($source_path).nth(1) {
+            let file_path = if let Some(parent) = std::path::Path::new(after_src).parent() {
+                parent.join($path_str)
+            } else {
+                panic!(
+                    "Expected parent path for `{}` derived from `{}`",
+                    after_src,
+                    file!()
+                );
+            };
+            std::path::Path::new(crate_name).join(file_path)
+        } else {
+            panic!(
+                "Expected source path `{}` in file path `{}`",
+                $source_path,
+                file!()
+            );
+        }
     }};
 }
 
@@ -200,7 +217,11 @@ macro_rules! embedded_asset {
             .resource_mut::<$crate::io::embedded::EmbeddedAssetRegistry>();
         let path = $crate::embedded_path!($source_path, $path);
         #[cfg(feature = "embedded_watcher")]
-        let full_path = std::path::Path::new(file!()).parent().unwrap().join($path);
+        let full_path = if let Some(parent) = std::path::Path::new(file!()).parent() {
+            parent.join($path)
+        } else {
+            panic!("Expected parent path for `{}`", file!())
+        };
         #[cfg(not(feature = "embedded_watcher"))]
         let full_path = std::path::PathBuf::new();
         embedded.insert_asset(full_path, &path, include_bytes!($path));
@@ -255,3 +276,61 @@ macro_rules! load_internal_binary_asset {
         );
     }};
 }
+
+#[cfg(test)]
+mod tests {
+    use std::path::PathBuf;
+
+    #[test]
+    fn test_embedded_path_no_panics() {
+        #[cfg(not(windows))]
+        assert_eq!(file!(), "crates/bevy_asset/src/io/embedded/mod.rs");
+        #[cfg(windows)]
+        assert_eq!(file!(), "crates\\bevy_asset\\src\\io\\embedded\\mod.rs");
+
+        #[cfg(not(windows))]
+        let path = PathBuf::from("bevy_asset/io/embedded/embed.png");
+        #[cfg(windows)]
+        let path = PathBuf::from("bevy_asset\\io\\embedded\\embed.png");
+
+        // One argument for embedded_path! uses '/src/' as its source_path.
+        assert_eq!(&embedded_path!("embed.png"), &path);
+        assert_eq!(&embedded_path!("/src/", "embed.png"), &path);
+    }
+
+    /// Using a slightly different source path parameter causes the crate_name to be omitted.
+    /// Possible bug.
+    #[test]
+    fn test_embedded_path_questionable() {
+        #[cfg(not(windows))]
+        let path = PathBuf::from("/io/embedded/embed.png");
+        #[cfg(windows)]
+        let path = PathBuf::from("\\io\\embedded\\embed.png");
+        assert_eq!(&embedded_path!("/src", "embed.png"), &path);
+        assert_eq!(&embedded_path!("src", "embed.png"), &path);
+    }
+
+    #[test]
+    #[should_panic(
+        // Unix
+        // expected = "Expected source path `NOT-IN-PATH` in file path `crates/bevy_asset/src/io/embedded/mod.rs`"
+        // Windows
+        // expected = "Expected source path `NOT-IN-PATH` in file path `crates\\bevy_asset\\src\\io\\embedded\\mod.rs`"
+        expected = "Expected source path `NOT-IN-PATH` in file path `crates"
+    )]
+    fn test_embedded_path_nonexistent_src_path() {
+        embedded_path!("NOT-IN-PATH", "embed.png");
+    }
+
+    #[test]
+    #[should_panic(
+        // Unix
+        // expected = "Expected parent path for `` derived from `crates/bevy_asset/src/io/embedded/mod.rs`"
+        // Windows
+        // expected = "Expected parent path for `` derived from `crates\\bevy_asset\\src\\io\\embedded\\mod.rs`"
+        expected = "Expected parent path for `` derived from `crates"
+    )]
+    fn test_embedded_parent_panic() {
+        embedded_path!("mod.rs", "embed.png");
+    }
+}