diff --git a/libmamba/src/api/configuration.cpp b/libmamba/src/api/configuration.cpp
index b2df44b90..17f771398 100644
--- a/libmamba/src/api/configuration.cpp
+++ b/libmamba/src/api/configuration.cpp
@@ -1893,23 +1893,43 @@ namespace mamba
                                            context.prefix_params.target_prefix / ".mambarc" };
 
         std::vector<fs::u8path> sources;
+        std::set<fs::u8path> known_locations;
+
+        // We only want to insert locations once, with the least precedence
+        // to emulate conda's IndexSet behavior
+
+        // This is especially important when the base env is active
+        // as target_prefix and root_prefix are the same.
+        // If there is a .condarc in the root_prefix, we don't want
+        // to load it twice, once for the root_prefix and once for the
+        // target_prefix with the highest precedence.
+        auto insertIntoSources = [&](const std::vector<fs::u8path>& locations)
+        {
+            for (auto& location : locations)
+            {
+                if (known_locations.insert(location).second)
+                {
+                    sources.emplace_back(location);
+                }
+            }
+        };
 
         if (level >= RCConfigLevel::kSystemDir)
         {
-            sources.insert(sources.end(), system.begin(), system.end());
+            insertIntoSources(system);
         }
         if ((level >= RCConfigLevel::kRootPrefix) && !context.prefix_params.root_prefix.empty())
         {
-            sources.insert(sources.end(), root.begin(), root.end());
+            insertIntoSources(root);
         }
         if (level >= RCConfigLevel::kHomeDir)
         {
-            sources.insert(sources.end(), conda_user.begin(), conda_user.end());
-            sources.insert(sources.end(), mamba_user.begin(), mamba_user.end());
+            insertIntoSources(conda_user);
+            insertIntoSources(mamba_user);
         }
         if ((level >= RCConfigLevel::kTargetPrefix) && !context.prefix_params.target_prefix.empty())
         {
-            sources.insert(sources.end(), prefix.begin(), prefix.end());
+            insertIntoSources(prefix);
         }
 
         // Sort by precedence
diff --git a/libmamba/tests/include/mambatests.hpp b/libmamba/tests/include/mambatests.hpp
index 352333668..d9c6355de 100644
--- a/libmamba/tests/include/mambatests.hpp
+++ b/libmamba/tests/include/mambatests.hpp
@@ -45,7 +45,7 @@ namespace mambatests
     }
 
     // Provides the context object to use in all tests needing it.
-    // Note that this context is setup to handle logigng and signal handling.
+    // Note that this context is setup to handle logging and signal handling.
     inline mamba::Context& context()
     {
         return singletons().context;
diff --git a/libmamba/tests/src/core/test_configuration.cpp b/libmamba/tests/src/core/test_configuration.cpp
index 49f2a6bab..e368b529f 100644
--- a/libmamba/tests/src/core/test_configuration.cpp
+++ b/libmamba/tests/src/core/test_configuration.cpp
@@ -1112,6 +1112,39 @@ namespace mamba
                 }
             }
 
+            // Regression test for https://github.com/mamba-org/mamba/issues/2704
+            TEST_CASE_FIXTURE(Configuration, "deduplicate_rc_files")
+            {
+                using namespace detail;
+
+                std::vector<fs::u8path> sources;
+
+                auto temp_prefix = std::make_unique<TemporaryDirectory>();
+                auto temp_home = std::make_unique<TemporaryDirectory>();
+
+                util::set_env("MAMBA_ROOT_PREFIX", temp_prefix->path().string());
+
+                // the target_prefix is the same as the root_prefix for the base env
+                util::set_env("MAMBA_TARGET_PREFIX", temp_prefix->path().string());
+                util::set_env("HOME", temp_home->path().string());
+                util::set_env("USERPROFILE", temp_home->path().string());
+
+                auto root_config_file = temp_prefix->path() / ".condarc";
+                std::ofstream out_root_config(root_config_file.std_path());
+                out_root_config << "channel_alias: http://outer.com\n";
+                out_root_config.close();
+
+                auto user_config_file = temp_home->path() / ".condarc";
+                std::ofstream out_user_config(user_config_file.std_path());
+                out_user_config << "channel_alias: http://inner.com\n";
+                out_user_config.close();
+
+                config.load();
+
+                REQUIRE_EQ(config.sources().size(), 2);
+                REQUIRE_EQ(config.at("channel_alias").value<std::string>(), "http://inner.com");
+            }
+
             TEST_CASE_FIXTURE(Configuration, "print_scalar_node")
             {
                 using namespace detail;