diff --git a/src/poetry/utils/env/env_manager.py b/src/poetry/utils/env/env_manager.py
index 0c1d52e0433..2087b1b3f6e 100644
--- a/src/poetry/utils/env/env_manager.py
+++ b/src/poetry/utils/env/env_manager.py
@@ -125,7 +125,7 @@ def activate(self, python: str) -> Env:
         if self.use_in_project_venv():
             create = False
             venv = self.in_project_venv
-            if venv.exists():
+            if venv.is_dir():
                 # We need to check if the patch version is correct
                 _venv = VirtualEnv(venv)
                 current_patch = ".".join(str(v) for v in _venv.version_info[:3])
@@ -452,7 +452,7 @@ def create_venv(
                     f"Invalid template string in 'virtualenvs.prompt' setting: {e}"
                 ) from e
 
-        if not venv.exists():
+        if not venv.is_dir():
             if create_venv is False:
                 self._io.write_error_line(
                     "<fg=black;bg=yellow>"
@@ -463,6 +463,12 @@ def create_venv(
 
                 return self.get_system_env()
 
+            if venv.is_file():
+                self._io.write_error_line(
+                    f"<warning>{venv} is not a virtual environment but a file. Removing it.</warning>"
+                )
+                venv.unlink()
+
             self._io.write_error_line(
                 f"Creating virtualenv <c1>{name}</> in"
                 f" {venv_path if not WINDOWS else get_real_windows_path(venv_path)!s}"
diff --git a/tests/utils/env/conftest.py b/tests/utils/env/conftest.py
index c5250195854..8e24245e1b6 100644
--- a/tests/utils/env/conftest.py
+++ b/tests/utils/env/conftest.py
@@ -4,6 +4,8 @@
 
 import pytest
 
+from cleo.io.buffered_io import BufferedIO
+
 from poetry.utils.env import EnvManager
 
 
@@ -19,5 +21,10 @@ def poetry(project_factory: ProjectFactory, fixture_dir: FixtureDirGetter) -> Po
 
 
 @pytest.fixture
-def manager(poetry: Poetry) -> EnvManager:
-    return EnvManager(poetry)
+def io() -> BufferedIO:
+    return BufferedIO()
+
+
+@pytest.fixture
+def manager(poetry: Poetry, io: BufferedIO) -> EnvManager:
+    return EnvManager(poetry, io)
diff --git a/tests/utils/env/test_env_manager.py b/tests/utils/env/test_env_manager.py
index 71e05e4cb5c..cc6878968c6 100644
--- a/tests/utils/env/test_env_manager.py
+++ b/tests/utils/env/test_env_manager.py
@@ -32,6 +32,7 @@
     from collections.abc import Iterator
     from unittest.mock import MagicMock
 
+    from cleo.io.buffered_io import BufferedIO
     from pytest import LogCaptureFixture
     from pytest_mock import MockerFixture
 
@@ -470,6 +471,56 @@ def test_activate_with_in_project_setting_does_not_fail_if_no_venvs_dir(
     assert not envs_file.exists()
 
 
+def test_activate_with_in_project_setting_if_venv_is_file(
+    manager: EnvManager,
+    poetry: Poetry,
+    io: BufferedIO,
+    config: Config,
+    tmp_path: Path,
+    mocker: MockerFixture,
+    venv_flags_default: dict[str, bool],
+    mocked_python_register: MockedPythonRegister,
+) -> None:
+    if "VIRTUAL_ENV" in os.environ:
+        del os.environ["VIRTUAL_ENV"]
+
+    config.merge(
+        {
+            "virtualenvs": {
+                "path": str(tmp_path / "virtualenvs"),
+                "in-project": True,
+            }
+        }
+    )
+
+    mocked_python_register("3.7.1")
+    m = mocker.patch("poetry.utils.env.EnvManager.build_venv")
+
+    venv_path = poetry.file.path.parent / ".venv"
+    assert not venv_path.exists()
+    venv_path.touch()
+    assert venv_path.is_file()
+
+    manager.activate("python3.7")
+
+    m.assert_called_with(
+        poetry.file.path.parent / ".venv",
+        executable=Path("/usr/bin/python3.7"),
+        flags=venv_flags_default,
+        prompt="simple-project-py3.7",
+    )
+
+    envs_file = TOMLFile(tmp_path / "virtualenvs" / "envs.toml")
+    assert not envs_file.exists()
+
+    # The .venv file is removed, but no .venv is created because we mocked build_venv.
+    assert not venv_path.exists()
+    assert (
+        f"{venv_path} is not a virtual environment but a file. Removing it."
+        in io.fetch_error()
+    )
+
+
 def test_deactivate_non_activated_but_existing(
     tmp_path: Path,
     manager: EnvManager,