diff --git a/packages/host/app/components/operator-mode/create-file-modal.gts b/packages/host/app/components/operator-mode/create-file-modal.gts
index 0c9887a5d8..7ca6ab85d4 100644
--- a/packages/host/app/components/operator-mode/create-file-modal.gts
+++ b/packages/host/app/components/operator-mode/create-file-modal.gts
@@ -32,6 +32,7 @@ import {
 } from '@cardstack/boxel-ui/icons';
 
 import {
+  cardIdToURL,
   specRef,
   chooseCard,
   baseRealm,
@@ -826,7 +827,16 @@ export default class CreateFileModal extends Component<Signature> {
       ref: { name: exportName, module },
     } = (this.definitionClass ?? spec)!; // we just checked above to make sure one of these exists
     let className = convertToClassName(this.displayName);
-    let absoluteModule = new URL(module, spec?.id);
+    const absoluteModuleHref = (
+      codeRefWithAbsoluteURL(
+        {
+          module: spec?.moduleHref ?? module,
+          name: exportName,
+        },
+        new URL(this.selectedRealmURL),
+      ) as ResolvedCodeRef
+    ).module;
+    const absoluteModule = new URL(absoluteModuleHref);
     let moduleURL = maybeRelativeURL(
       absoluteModule,
       url,
@@ -929,9 +939,7 @@ export class ${className} extends ${exportName} {
 
     let { ref } = (this.definitionClass ? this.definitionClass : spec)!; // we just checked above to make sure one of these exist
 
-    let relativeTo = spec
-      ? new URL(spec.id!) // only new cards are missing urls
-      : undefined;
+    let relativeTo = spec?.id ? cardIdToURL(spec.id) : undefined;
     // we make the code ref use an absolute URL for safety in
     // the case it's being created in a different realm than where the card
     // definition comes from. The server will make relative URL if appropriate after creation
diff --git a/packages/host/tests/acceptance/code-submode/create-file-test.gts b/packages/host/tests/acceptance/code-submode/create-file-test.gts
index 295e34792d..3bff0c60e3 100644
--- a/packages/host/tests/acceptance/code-submode/create-file-test.gts
+++ b/packages/host/tests/acceptance/code-submode/create-file-test.gts
@@ -9,7 +9,12 @@ import {
 import { getService } from '@universal-ember/test-support';
 import { module, test } from 'qunit';
 
-import { baseRealm, Deferred } from '@cardstack/runtime-common';
+import {
+  baseRealm,
+  Deferred,
+  registerCardReferencePrefix,
+  unregisterCardReferencePrefix,
+} from '@cardstack/runtime-common';
 
 import type FileUploadService from '@cardstack/host/services/file-upload';
 
@@ -37,6 +42,8 @@ import type { TestRealmAdapter } from '../../helpers/adapter';
 const testRealmURL2 = 'http://test-realm/test2/';
 const testRealmAIconURL = 'https://i.postimg.cc/L8yXRvws/icon.png';
 
+const testPrefixRealmURL2 = `@test-realm/test2/`;
+
 const files: Record<string, any> = {
   '.realm.json': {
     name: 'Test Workspace A',
@@ -183,6 +190,32 @@ const filesB: Record<string, any> = {
       },
     },
   },
+  'animal.gts': `
+    import { contains, field, CardDef } from "https://cardstack.com/base/card-api";
+    import StringField from "https://cardstack.com/base/string";
+
+    export class Animal extends CardDef {
+      static displayName = 'Animal';
+      @field name = contains(StringField);
+    }
+  `,
+  'spec/animal.json': {
+    data: {
+      type: 'card',
+      attributes: {
+        cardTitle: 'Animal',
+        cardDescription: 'Spec for Animal',
+        specType: 'card',
+        ref: { module: '@test-realm/test2/animal', name: 'Animal' },
+      },
+      meta: {
+        adoptsFrom: {
+          module: 'https://cardstack.com/base/spec',
+          name: 'Spec',
+        },
+      },
+    },
+  },
 };
 
 module('Acceptance | code submode | create-file tests', function (hooks) {
@@ -1234,6 +1267,66 @@ export class TestCard extends CardDef {
     });
   });
 
+  module('when a selected spec uses a prefix-form ref', function (hooks) {
+    hooks.before(function () {
+      registerCardReferencePrefix(testPrefixRealmURL2, testRealmURL2);
+    });
+
+    hooks.after(function () {
+      unregisterCardReferencePrefix(testPrefixRealmURL2);
+    });
+
+    test<TestContextWithSave>('can create new card definition in workspace A that extends a card from workspace B via prefix-form ref', async function (assert) {
+      assert.expect(2);
+      await visitOperatorMode(`${baseRealm.url}card-api.gts`);
+      await openNewFileModal('Card Definition');
+      await click('[data-test-select-card-type]');
+      await waitFor('[data-test-card-catalog-modal]');
+      await waitFor(
+        `[data-test-card-catalog-item="${testRealmURL2}spec/animal"]`,
+      );
+      await click(
+        `[data-test-card-catalog-item="${testRealmURL2}spec/animal"]`,
+      );
+      await click('[data-test-card-catalog-go-button]');
+      await waitFor(`[data-test-selected-type="Animal"]`);
+
+      await fillIn('[data-test-display-name-field]', 'Test Card');
+      await fillIn('[data-test-file-name-field]', 'test-card');
+
+      let deferred = new Deferred<void>();
+      this.onSave((url, content) => {
+        if (typeof content !== 'string') {
+          throw new Error(`expected string save data`);
+        }
+        assert.strictEqual(
+          content,
+          `
+import { Animal } from '${testRealmURL2}animal';
+import { Component } from 'https://cardstack.com/base/card-api';
+export class TestCard extends Animal {
+  static displayName = "Test Card";
+}`.trim(),
+          'The source uses the resolved absolute module URL',
+        );
+        assert.strictEqual(
+          url.href,
+          `${testRealmURL}test-card.gts`,
+          [
+            'Saved file URL should point to Test Workspace A',
+            `Expected: ${testRealmURL}test-card.gts`,
+            `Actual: ${url.href}`,
+          ].join('\n'),
+        );
+        deferred.fulfill();
+      });
+
+      await click('[data-test-create-definition]');
+      await waitFor('[data-test-create-file-modal]', { count: 0 });
+      await deferred.promise;
+    });
+  });
+
   module(
     'when the user lacks write permissions in remote realm',
     function (hooks) {