diff --git a/CHANGELOG.md b/CHANGELOG.md
index d47e6ac8da..cac942d892 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -86,6 +86,14 @@
       parameter Verbose.
     - Moved localization strings from xSQLServer.strings.psd1 to
       xSQLServerHelper.strings.psd1.
+  - Changes to Connect-SQL and Import-SQLPSModule
+    - Now it correctly loads the correct assemblies when SqlServer module is
+      present (issue #649).
+    - Now SQLPS module will be correctly loaded (discovered) after installation
+      of SQL Server. Previously resources depending on SQLPS module could fail
+      because SQLPS was not found after installation because the PSModulePath
+      environment variable in the (LCM) PowerShell session did not contain the new
+      module path.
 - Changes to xSQLServerSetup
   - BREAKING CHANGE: Replaced StartWin32Process helper function with the cmdlet
     Start-Process (issue #41, #93 and #126).
diff --git a/Tests/Unit/xSQLServerHelper.Tests.ps1 b/Tests/Unit/xSQLServerHelper.Tests.ps1
index e7ea4fd0e0..6da15cb0e4 100644
--- a/Tests/Unit/xSQLServerHelper.Tests.ps1
+++ b/Tests/Unit/xSQLServerHelper.Tests.ps1
@@ -1071,6 +1071,7 @@ InModuleScope $script:moduleName {
     Describe 'Testing Connect-SQL' -Tag ConnectSql {
         BeforeEach {
             Mock -CommandName New-InvalidOperationException -MockWith $mockThrowLocalizedMessage -Verifiable
+            Mock -CommandName Import-SQLPSModule
             Mock -CommandName New-Object `
                 -MockWith $mockNewObject_MicrosoftDatabaseEngine `
                 -ParameterFilter $mockNewObject_MicrosoftDatabaseEngine_ParameterFilter `
diff --git a/xSQLServerHelper.psm1 b/xSQLServerHelper.psm1
index 7f7971b828..2a032b6d1c 100644
--- a/xSQLServerHelper.psm1
+++ b/xSQLServerHelper.psm1
@@ -37,7 +37,7 @@ function Connect-SQL
         $SetupCredential
     )
 
-    $null = [System.Reflection.Assembly]::LoadWithPartialName('Microsoft.SqlServer.Smo')
+    Import-SQLPSModule
 
     if ($SQLInstanceName -eq 'MSSQLSERVER')
     {
@@ -697,6 +697,15 @@ function Import-SQLPSModule
     else
     {
         Write-Verbose -Message ($script:localizedData.PreferredModuleNotFound) -Verbose
+
+        <#
+            After installing SQL Server the current PowerShell session doesn't know about the new path
+            that was added for the SQLPS module.
+            This reloads PowerShell session environment variable PSModulePath to make sure it contains
+            all paths.
+        #>
+        $env:PSModulePath = [System.Environment]::GetEnvironmentVariable('PSModulePath', 'Machine')
+
         $module = (Get-Module -FullyQualifiedName 'SQLPS' -ListAvailable).Name
     }