diff --git a/CHANGELOG.md b/CHANGELOG.md
index 08c941b1..e7bae1cb 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -12,6 +12,7 @@ A preview of the next release can be installed from
 - Add `java.util.ScheduledFuture`
 - Support `Runnable` to be used without import
 - Allow `catch` to be used as var name
+- [#1646](https://github.com/babashka/babashka/issues/1646): command-line-args are dropped when file exists with same name
 
 ## 1.3.186 (2023-11-02)
 
diff --git a/src/babashka/main.clj b/src/babashka/main.clj
index 3d1aee96..99aa73f6 100644
--- a/src/babashka/main.clj
+++ b/src/babashka/main.clj
@@ -741,11 +741,10 @@ Use bb run --help to show this help output.
      (if-not opt opts-map
              ;; FILE > TASK > SUBCOMMAND
              (cond
-               (.isFile (io/file opt))
-               (if (or (:file opts-map) (:jar opts-map))
-                 opts-map ; we've already parsed the file opt
-                 (parse-file-opt options opts-map))
-
+               (and (not (or (:file opts-map)
+                             (:jar opts-map)))
+                    (.isFile (io/file opt)))
+               (parse-file-opt options opts-map)
                (contains? tasks opt)
                (assoc opts-map
                       :run opt
@@ -1181,7 +1180,6 @@ Use bb run --help to show this help output.
                              edn)]
                    (vreset! common/bb-edn edn)))
         opts (parse-opts args opts)
-        ;; _ (.println System/err (str bb-edn))
         min-bb-version (:min-bb-version bb-edn)]
     (System/setProperty "java.class.path" "")
     (when min-bb-version
diff --git a/test/babashka/main_test.clj b/test/babashka/main_test.clj
index 1d80f4b6..c223225e 100644
--- a/test/babashka/main_test.clj
+++ b/test/babashka/main_test.clj
@@ -69,7 +69,9 @@
   (testing "file opts parsing does not mess with :command-line-args"
     (is (= {:prn true, :expressions ["(prn :foo)"]}
            (-> (let [opts (main/parse-file-opt ["-e" "(prn :foo)"] {})]
-                 (main/parse-opts ["-e" "(prn :foo)"] opts)))))))
+                 (main/parse-opts ["-e" "(prn :foo)"] opts)))))
+    (is (= {:file "foo", :command-line-args ["README.md"]}
+           (main/parse-opts ["README.md"] {:file "foo"})))))
 
 (deftest version-test
   (is (= [1 0 0] (main/parse-version "1.0.0-SNAPSHOT")))