diff --git a/src/dune_engine/build_config.ml b/src/dune_engine/build_config.ml
index 2a33d63b453..e5d636bb7cd 100644
--- a/src/dune_engine/build_config.ml
+++ b/src/dune_engine/build_config.ml
@@ -77,7 +77,7 @@ type t =
   ; cache_config : Dune_cache.Config.t
   ; cache_debug_flags : Cache_debug_flags.t
   ; implicit_default_alias : Path.Build.t -> unit Action_builder.t option Memo.t
-  ; execution_parameters : dir:Path.Source.t -> Execution_parameters.t Memo.t
+  ; execution_parameters : dir:Path.Build.t -> Execution_parameters.t Memo.t
   ; source_tree : (module Source_tree)
   ; action_runner : Action_exec.input -> Action_runner.t option
   ; action_runners : unit -> Action_runner.t list
diff --git a/src/dune_engine/build_config_intf.ml b/src/dune_engine/build_config_intf.ml
index 883de499d96..f87d46b1282 100644
--- a/src/dune_engine/build_config_intf.ml
+++ b/src/dune_engine/build_config_intf.ml
@@ -136,7 +136,7 @@ module type Build_config = sig
     -> sandboxing_preference:Sandbox_mode.t list
     -> rule_generator:(module Gen_rules.Rule_generator)
     -> implicit_default_alias:(Path.Build.t -> unit Action_builder.t option Memo.t)
-    -> execution_parameters:(dir:Path.Source.t -> Execution_parameters.t Memo.t)
+    -> execution_parameters:(dir:Path.Build.t -> Execution_parameters.t Memo.t)
     -> source_tree:(module Source_tree)
     -> shared_cache:(module Shared_cache_intf.S)
     -> write_error_summary:(Build_system_error.Set.t -> unit Fiber.t)
@@ -157,7 +157,7 @@ module type Build_config = sig
     ; cache_config : Dune_cache.Config.t
     ; cache_debug_flags : Cache_debug_flags.t
     ; implicit_default_alias : Path.Build.t -> unit Action_builder.t option Memo.t
-    ; execution_parameters : dir:Path.Source.t -> Execution_parameters.t Memo.t
+    ; execution_parameters : dir:Path.Build.t -> Execution_parameters.t Memo.t
     ; source_tree : (module Source_tree)
     ; action_runner : Action_exec.input -> Action_runner.t option
     ; action_runners : unit -> Action_runner.t list
diff --git a/src/dune_engine/build_system.ml b/src/dune_engine/build_system.ml
index d6d2a6027ab..bc51b67c03f 100644
--- a/src/dune_engine/build_system.ml
+++ b/src/dune_engine/build_system.ml
@@ -440,7 +440,7 @@ end = struct
     let head_target = Targets.Validated.head targets in
     let* execution_parameters =
       match Dpath.Target_dir.of_target dir with
-      | Regular (With_context (_, dir)) | Anonymous_action (With_context (_, dir)) ->
+      | Regular (With_context (_, _)) | Anonymous_action (With_context (_, _)) ->
         (Build_config.get ()).execution_parameters ~dir
       | Anonymous_action Root | Regular Root | Invalid _ ->
         Code_error.raise "invalid dir for rule execution" [ "dir", Path.Build.to_dyn dir ]
diff --git a/src/dune_rules/main.ml b/src/dune_rules/main.ml
index fe217ca61f1..90935aed80d 100644
--- a/src/dune_rules/main.ml
+++ b/src/dune_rules/main.ml
@@ -26,15 +26,18 @@ let implicit_default_alias dir =
 
 let execution_parameters =
   let f path =
-    let open Memo.O in
-    let+ dir = Source_tree.nearest_dir path
-    and+ ep = Execution_parameters.default in
-    Dune_project.update_execution_parameters (Source_tree.Dir.project dir) ep
+    match Path.Build.drop_build_context path with
+    | None -> Dune_engine.Execution_parameters.default
+    | Some path ->
+      let open Memo.O in
+      let+ dir = Source_tree.nearest_dir path
+      and+ ep = Execution_parameters.default in
+      Dune_project.update_execution_parameters (Source_tree.Dir.project dir) ep
   in
   let memo =
     Memo.create
       "execution-parameters-of-dir"
-      ~input:(module Path.Source)
+      ~input:(module Path.Build)
       ~cutoff:Execution_parameters.equal
       f
   in