diff --git a/src/runtimes/node/utils/zip.ts b/src/runtimes/node/utils/zip.ts
index 55cb9c064..4d1a804b3 100644
--- a/src/runtimes/node/utils/zip.ts
+++ b/src/runtimes/node/utils/zip.ts
@@ -108,10 +108,6 @@ const createZipArchive = async function ({
   const destPath = join(destFolder, `${basename(filename, extension)}.zip`)
   const { archive, output } = startZip(destPath)
 
-  // We don't need an entry file if it would end up with the same path as the
-  // function's main file.
-  const needsEntryFile = !isNamedLikeEntryFile(mainFile, { basePath, filename })
-
   // There is a naming conflict with the entry file if one of the supporting
   // files (i.e. not the main file) has the path that the entry file needs to
   // take.
@@ -121,6 +117,10 @@ const createZipArchive = async function ({
     mainFile,
   })
 
+  // We don't need an entry file if it would end up with the same path as the
+  // function's main file. Unless we have a file conflict and need to move everything into a subfolder
+  const needsEntryFile = hasEntryFileConflict || !isNamedLikeEntryFile(mainFile, { basePath, filename })
+
   // If there is a naming conflict, we move all user files (everything other
   // than the entry file) to its own sub-directory.
   const userNamespace = hasEntryFileConflict ? DEFAULT_USER_SUBDIRECTORY : ''
diff --git a/tests/fixtures/naming_conflict/func1/func1.js b/tests/fixtures/naming_conflict/func1/func1.js
new file mode 100644
index 000000000..272ae546a
--- /dev/null
+++ b/tests/fixtures/naming_conflict/func1/func1.js
@@ -0,0 +1,3 @@
+exports.handler = function handler (event, context) {
+  return import('./func1.mjs').then(m => m.handler(event, context))
+}
diff --git a/tests/fixtures/naming_conflict/func1/func1.mjs b/tests/fixtures/naming_conflict/func1/func1.mjs
new file mode 100644
index 000000000..767df32b9
--- /dev/null
+++ b/tests/fixtures/naming_conflict/func1/func1.mjs
@@ -0,0 +1 @@
+export const handler = () => true
diff --git a/tests/main.test.ts b/tests/main.test.ts
index d3564a918..8f86394be 100644
--- a/tests/main.test.ts
+++ b/tests/main.test.ts
@@ -1383,6 +1383,28 @@ describe('zip-it-and-ship-it', () => {
     },
   )
 
+  testMany(
+    'Generates a entry file if no entry file needed but naming conflict occurs',
+    ['bundler_default', 'bundler_nft'],
+    async (options) => {
+      const fixtureName = 'naming_conflict'
+      const opts = merge(options, {
+        basePath: join(FIXTURES_DIR, fixtureName),
+      })
+      const { tmpDir } = await zipNode(fixtureName, {
+        opts,
+        length: 1,
+      })
+
+      const function2Entry = await importFunctionFile(`${tmpDir}/func1.js`)
+
+      expect(await function2Entry.handler()).toBe(true)
+
+      await expect(`${tmpDir}/src/func1.js`).toPathExist()
+      await expect(`${tmpDir}/src/func1.mjs`).toPathExist()
+    },
+  )
+
   testMany(
     'Bundles functions from multiple directories when the first argument of `zipFunctions()` is an array',
     ['bundler_esbuild', 'bundler_default', 'bundler_nft'],