diff --git a/autoload/ale/python.vim b/autoload/ale/python.vim
index 9eb198fb46..148683d6d5 100644
--- a/autoload/ale/python.vim
+++ b/autoload/ale/python.vim
@@ -108,12 +108,17 @@ function! ale#python#AutoVirtualenvEnvString(buffer) abort
 
     if !empty(l:venv_dir)
         let l:strs = [ ]
+        " venv/bin directory
+        let l:pathdir = join([l:venv_dir, s:bin_dir], s:sep)
 
         " expand PATH correctly inside of the appropriate shell.
+        " set VIRTUAL_ENV to point to venv
         if has('win32')
-            call add(l:strs, 'set PATH=' . ale#Escape(l:venv_dir) . ';%PATH% && ')
+            call add(l:strs, 'set PATH=' . ale#Escape(l:pathdir) . ';%PATH% && ')
+            call add(l:strs, 'set VIRTUAL_ENV=' . ale#Escape(l:venv_dir) . ' && ')
         else
-            call add(l:strs, 'PATH=' . ale#Escape(l:venv_dir) . '":$PATH" ')
+            call add(l:strs, 'PATH=' . ale#Escape(l:pathdir) . '":$PATH" ')
+            call add(l:strs, 'VIRTUAL_ENV=' . ale#Escape(l:venv_dir) . ' ')
         endif
 
         return join(l:strs, '')
diff --git a/test/test_python_virtualenv.vader b/test/test_python_virtualenv.vader
index cb49d3155f..25699873ff 100644
--- a/test/test_python_virtualenv.vader
+++ b/test/test_python_virtualenv.vader
@@ -14,10 +14,10 @@ Execute(ale#python#FindVirtualenv falls back to $VIRTUAL_ENV when no directories
 Execute(ale#python#AutoVirtualenvEnvString should return the correct values):
   if has('win32')
     AssertEqual
-    \ 'set PATH=/opt/example/;%PATH% && ',
+    \ 'set PATH=/opt/example/\Scripts;%PATH% && set VIRTUAL_ENV=/opt/example/ && ',
     \ ale#python#AutoVirtualenvEnvString(bufnr(''))
   else
     AssertEqual
-    \ 'PATH=''/opt/example/''":$PATH" ',
+    \ 'PATH=''/opt/example//bin''":$PATH" VIRTUAL_ENV=''/opt/example/'' ',
     \ ale#python#AutoVirtualenvEnvString(bufnr(''))
   endif