diff --git a/docs/source/running_mypy.rst b/docs/source/running_mypy.rst
index d4061fcdc103..603264b8b6d9 100644
--- a/docs/source/running_mypy.rst
+++ b/docs/source/running_mypy.rst
@@ -443,9 +443,9 @@ How mypy determines fully qualified module names depends on if the options
 
    With :option:`--explicit-package-bases <mypy --explicit-package-bases>`, mypy
    will locate the nearest parent directory that is a member of the ``MYPYPATH``
-   environment variable, the :confval:`mypy_path` config or is the current
-   working directory. Mypy will then use the relative path to determine the
-   fully qualified module name.
+   environment variable, the :confval:`mypy_path` config or, if neither of those
+   configuration options are specified, then the current working directory.
+   Mypy will then use the relative path to determine the fully qualified module name.
 
    For example, say your directory tree consists solely of
    ``src/namespace_pkg/mod.py``. If you run the command following command, mypy
diff --git a/mypy/find_sources.py b/mypy/find_sources.py
index a44648f261ed..80ec2b1deaca 100644
--- a/mypy/find_sources.py
+++ b/mypy/find_sources.py
@@ -73,7 +73,7 @@ def normalise_package_base(root: str) -> str:
 def get_explicit_package_bases(options: Options) -> Optional[List[str]]:
     """Returns explicit package bases to use if the option is enabled, or None if disabled.
 
-    We currently use MYPYPATH and the current directory as the package bases. In the future,
+    We currently use MYPYPATH or the current directory as the package bases. In the future,
     when --namespace-packages is the default could also use the values passed with the
     --package-root flag, see #9632.
 
@@ -82,7 +82,7 @@ def get_explicit_package_bases(options: Options) -> Optional[List[str]]:
     """
     if not options.explicit_package_bases:
         return None
-    roots = mypy_path() + options.mypy_path + [os.getcwd()]
+    roots = mypy_path() + options.mypy_path or [os.getcwd()]
     return [normalise_package_base(root) for root in roots]
 
 
diff --git a/mypy/main.py b/mypy/main.py
index 90134de9c438..9797784553c8 100644
--- a/mypy/main.py
+++ b/mypy/main.py
@@ -162,7 +162,8 @@ def flush_errors(new_messages: List[str], serious: bool) -> None:
     try:
         # Keep a dummy reference (res) for memory profiling afterwards, as otherwise
         # the result could be freed.
-        res = build.build(sources, options, None, flush_errors, fscache, stdout, stderr)
+        alt_lib_path = "" if options.explicit_package_bases else None
+        res = build.build(sources, options, alt_lib_path, flush_errors, fscache, stdout, stderr)
     except CompileError as e:
         blockers = True
         if not e.use_stdout:
@@ -862,7 +863,7 @@ def add_invertible_flag(flag: str,
                     "mypy.readthedocs.io/en/stable/running_mypy.html#running-mypy")
     add_invertible_flag(
         '--explicit-package-bases', default=False,
-        help="Use current directory and MYPYPATH to determine module names of files passed",
+        help="Use current directory or MYPYPATH to determine module names of files passed",
         group=code_group)
     code_group.add_argument(
         "--exclude",
diff --git a/mypy/modulefinder.py b/mypy/modulefinder.py
index df5c556409a3..fe3017ff4a92 100644
--- a/mypy/modulefinder.py
+++ b/mypy/modulefinder.py
@@ -698,7 +698,7 @@ def compute_search_paths(sources: List[BuildSource],
     # alt_lib_path is used by some tests to bypass the normal lib_path mechanics.
     # If we don't have one, grab directories of source files.
     python_path: List[str] = []
-    if not alt_lib_path:
+    if alt_lib_path is None:
         for source in sources:
             # Include directory of the program file in the module search path.
             if source.base_dir:
diff --git a/mypy/options.py b/mypy/options.py
index 310fff5dbfe5..904779625246 100644
--- a/mypy/options.py
+++ b/mypy/options.py
@@ -93,7 +93,7 @@ def __init__(self) -> None:
         # multiple directories. This flag affects both import discovery and the association of
         # input files/modules/packages to the relevant file and fully qualified module name.
         self.namespace_packages = False
-        # Use current directory and MYPYPATH to determine fully qualified module names of files
+        # Use current directory or MYPYPATH to determine fully qualified module names of files
         # passed by automatically considering their subdirectories as packages. This is only
         # relevant if namespace packages are enabled, since otherwise examining __init__.py's is
         # sufficient to determine module names for files. As a possible alternative, add a single