diff --git a/.changeset/early-seahorses-stare.md b/.changeset/early-seahorses-stare.md
new file mode 100644
index 0000000000..963058a26f
--- /dev/null
+++ b/.changeset/early-seahorses-stare.md
@@ -0,0 +1,5 @@
+---
+'@backstage/backend-common': patch
+---
+
+Fixing issue with `AzureUrlReader` that doesn't do `subpath` directories correctly
diff --git a/packages/backend-common/src/reading/AzureUrlReader.test.ts b/packages/backend-common/src/reading/AzureUrlReader.test.ts
index c7c8853929..fc1f6a03f3 100644
--- a/packages/backend-common/src/reading/AzureUrlReader.test.ts
+++ b/packages/backend-common/src/reading/AzureUrlReader.test.ts
@@ -220,6 +220,21 @@ describe('AzureUrlReader', () => {
       expect(indexMarkdownFile.toString()).toBe('# Test\n');
     });
 
+    it('returns the wanted files from an archive when a subpath is passed through', async () => {
+      const response = await processor.readTree(
+        'https://dev.azure.com/organization/project/_git/repository?path=%2Fdocs',
+      );
+
+      expect(response.etag).toBe('123abc2');
+
+      const files = await response.files();
+
+      expect(files.length).toBe(1);
+      const indexMarkdownFile = await files[0].content();
+
+      expect(indexMarkdownFile.toString()).toBe('# Test\n');
+    });
+
     it('creates a directory with the wanted files', async () => {
       const response = await processor.readTree(
         'https://dev.azure.com/organization/project/_git/repository',
diff --git a/packages/backend-common/src/reading/AzureUrlReader.ts b/packages/backend-common/src/reading/AzureUrlReader.ts
index 910e8e04a5..2269393cbf 100644
--- a/packages/backend-common/src/reading/AzureUrlReader.ts
+++ b/packages/backend-common/src/reading/AzureUrlReader.ts
@@ -94,8 +94,6 @@ export class AzureUrlReader implements UrlReader {
     url: string,
     options?: ReadTreeOptions,
   ): Promise<ReadTreeResponse> {
-    // TODO: Support filepath based reading tree feature like other providers
-
     // Get latest commit SHA
 
     const commitsAzureResponse = await fetch(
@@ -129,10 +127,13 @@ export class AzureUrlReader implements UrlReader {
       throw new Error(message);
     }
 
+    const { filepath } = parseGitUrl(url);
+
     return await this.deps.treeResponseFactory.fromZipArchive({
       stream: archiveAzureResponse.body as unknown as Readable,
       etag: commitSha,
       filter: options?.filter,
+      subpath: filepath,
     });
   }
 
diff --git a/packages/backend-common/src/reading/tree/ZipArchiveResponse.test.ts b/packages/backend-common/src/reading/tree/ZipArchiveResponse.test.ts
index f6f9a7845a..a54bac0c4a 100644
--- a/packages/backend-common/src/reading/tree/ZipArchiveResponse.test.ts
+++ b/packages/backend-common/src/reading/tree/ZipArchiveResponse.test.ts
@@ -62,36 +62,6 @@ describe('ZipArchiveResponse', () => {
     ]);
   });
 
-  it('should read files and strip root dir if requested', async () => {
-    const stream = fs.createReadStream('/test-archive-with-extra-root-dir.zip');
-
-    const res = new ZipArchiveResponse(
-      stream,
-      '',
-      '/tmp',
-      'etag',
-      undefined,
-      true,
-    );
-    const files = await res.files();
-
-    expect(files).toEqual([
-      {
-        path: 'mkdocs.yml',
-        content: expect.any(Function),
-      },
-      {
-        path: 'docs/index.md',
-        content: expect.any(Function),
-      },
-    ]);
-    const contents = await Promise.all(files.map(f => f.content()));
-    expect(contents.map(c => c.toString('utf8').trim())).toEqual([
-      'site_name: Test',
-      '# Test',
-    ]);
-  });
-
   it('should read files with filter', async () => {
     const stream = fs.createReadStream('/test-archive.zip');
 
diff --git a/packages/backend-common/src/reading/tree/ZipArchiveResponse.ts b/packages/backend-common/src/reading/tree/ZipArchiveResponse.ts
index fb22f24b94..e07cedde87 100644
--- a/packages/backend-common/src/reading/tree/ZipArchiveResponse.ts
+++ b/packages/backend-common/src/reading/tree/ZipArchiveResponse.ts
@@ -24,7 +24,6 @@ import {
   ReadTreeResponseDirOptions,
   ReadTreeResponseFile,
 } from '../types';
-import { stripFirstDirectoryFromPath } from './util';
 
 /**
  * Wraps a zip archive stream into a tree response reader.
@@ -38,7 +37,6 @@ export class ZipArchiveResponse implements ReadTreeResponse {
     private readonly workDir: string,
     public readonly etag: string,
     private readonly filter?: (path: string, info: { size: number }) => boolean,
-    private readonly stripFirstDirectory?: boolean,
   ) {
     if (subPath) {
       if (!subPath.endsWith('/')) {
@@ -68,12 +66,8 @@ export class ZipArchiveResponse implements ReadTreeResponse {
   }
 
   private shouldBeIncluded(entry: Entry): boolean {
-    const strippedPath = this.stripFirstDirectory
-      ? stripFirstDirectoryFromPath(entry.path)
-      : entry.path;
-
     if (this.subPath) {
-      if (!strippedPath.startsWith(this.subPath)) {
+      if (!entry.path.startsWith(this.subPath)) {
         return false;
       }
     }
@@ -102,11 +96,7 @@ export class ZipArchiveResponse implements ReadTreeResponse {
 
         if (this.shouldBeIncluded(entry)) {
           files.push({
-            path: this.getInnerPath(
-              this.stripFirstDirectory
-                ? stripFirstDirectoryFromPath(entry.path)
-                : entry.path,
-            ),
+            path: this.getInnerPath(entry.path),
             content: () => entry.buffer(),
           });
         } else {
@@ -154,11 +144,7 @@ export class ZipArchiveResponse implements ReadTreeResponse {
         // Ignore directory entries since we handle that with the file entries
         // as a zip can have files with directories without directory entries
         if (entry.type === 'File' && this.shouldBeIncluded(entry)) {
-          const entryPath = this.getInnerPath(
-            this.stripFirstDirectory
-              ? stripFirstDirectoryFromPath(entry.path)
-              : entry.path,
-          );
+          const entryPath = this.getInnerPath(entry.path);
           const dirname = platformPath.dirname(entryPath);
           if (dirname) {
             await fs.mkdirp(platformPath.join(dir, dirname));