diff --git a/src/openai/lib/azure.py b/src/openai/lib/azure.py
index b76b83c61c..a1a473bc09 100644
--- a/src/openai/lib/azure.py
+++ b/src/openai/lib/azure.py
@@ -55,11 +55,21 @@ def _build_request(
     ) -> httpx.Request:
         if options.url in _deployments_endpoints and is_mapping(options.json_data):
             model = options.json_data.get("model")
-            if model is not None and not "/deployments" in str(self.base_url):
+            if model is not None and "/deployments/" not in str(self.base_url.path):
                 options.url = f"/deployments/{model}{options.url}"
 
         return super()._build_request(options)
 
+    @override
+    def _prepare_url(self, url: str) -> httpx.URL:
+        if "/deployments/" in str(self.base_url.path) and url not in _deployments_endpoints:
+            merge_url = httpx.URL(url)
+            if merge_url.is_relative_url:
+                merge_path = f"{self.base_url.path.rsplit('/deployments/', maxsplit=1)[0]}/{merge_url.path.lstrip('/')}"
+                return self.base_url.copy_with(path=merge_path)
+
+        return super()._prepare_url(url)
+
 
 class AzureOpenAI(BaseAzureClient[httpx.Client, Stream[Any]], OpenAI):
     @overload
diff --git a/tests/lib/test_azure.py b/tests/lib/test_azure.py
index 9360b2925a..6aab036c5f 100644
--- a/tests/lib/test_azure.py
+++ b/tests/lib/test_azure.py
@@ -1,3 +1,5 @@
+from __future__ import annotations
+
 from typing import Union
 from typing_extensions import Literal
 
@@ -22,21 +24,6 @@
 )
 
 
-@pytest.mark.parametrize("client", [sync_client, async_client])
-def test_implicit_deployment_path(client: Client) -> None:
-    req = client._build_request(
-        FinalRequestOptions.construct(
-            method="post",
-            url="/chat/completions",
-            json_data={"model": "my-deployment-model"},
-        )
-    )
-    assert (
-        req.url
-        == "https://example-resource.azure.openai.com/openai/deployments/my-deployment-model/chat/completions?api-version=2023-07-01"
-    )
-
-
 @pytest.mark.parametrize(
     "client,method",
     [
@@ -64,3 +51,357 @@ def test_client_copying_override_options(client: Client) -> None:
         api_version="2022-05-01",
     )
     assert copied._custom_query == {"api-version": "2022-05-01"}
+
+
+@pytest.mark.parametrize(
+    "client,base_url,api_path,json_data,expected",
+    [
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+            ),
+            "https://example-resource.azure.openai.com/openai/",
+            "/chat/completions",
+            {"model": "my-deployment"},
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+            ),
+            "https://example-resource.azure.openai.com/openai/",
+            "/models",
+            {},
+            "https://example-resource.azure.openai.com/openai/models?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+            ),
+            "https://example-resource.azure.openai.com/openai/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example-resource.azure.openai.com/openai/assistants?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+                azure_deployment="my-deployment"
+            ),
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/",
+            "/chat/completions",
+            {"model": "placeholder"},
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+                azure_deployment="my-deployment"
+            ),
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/",
+            "/models",
+            {},
+            "https://example-resource.azure.openai.com/openai/models?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+                azure_deployment="my-deployment"
+            ),
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example-resource.azure.openai.com/openai/assistants?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU/deployments/my-deployment",
+            ),
+            "https://example.azure-api.net/PTU/deployments/my-deployment/",
+            "/chat/completions",
+            {"model": "placeholder"},
+            "https://example.azure-api.net/PTU/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU/deployments/my-deployment",
+            ),
+            "https://example.azure-api.net/PTU/deployments/my-deployment/",
+            "/models",
+            {},
+            "https://example.azure-api.net/PTU/models?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU/deployments/my-deployment",
+            ),
+            "https://example.azure-api.net/PTU/deployments/my-deployment/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example.azure-api.net/PTU/assistants?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU",
+            ),
+            "https://example.azure-api.net/PTU/",
+            "/chat/completions",
+            {"model": "my-deployment"},
+            "https://example.azure-api.net/PTU/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU",
+            ),
+            "https://example.azure-api.net/PTU/",
+            "/models",
+            {},
+            "https://example.azure-api.net/PTU/models?api-version=2024-02-01"
+        ),
+        (
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU",
+            ),
+            "https://example.azure-api.net/PTU/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example.azure-api.net/PTU/assistants?api-version=2024-02-01"
+        ),
+        (   # The below test case fails -- even before the change in _prepare_url
+            AzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/deployments",
+            ),
+            "https://example.azure-api.net/deployments/",
+            "/chat/completions",
+            {"model": "my-deployment"},
+            "https://example.azure-api.net/deployments/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+            ),
+            "https://example-resource.azure.openai.com/openai/",
+            "/chat/completions",
+            {"model": "my-deployment"},
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+            ),
+            "https://example-resource.azure.openai.com/openai/",
+            "/models",
+            {},
+            "https://example-resource.azure.openai.com/openai/models?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+            ),
+            "https://example-resource.azure.openai.com/openai/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example-resource.azure.openai.com/openai/assistants?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+                azure_deployment="my-deployment"
+            ),
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/",
+            "/chat/completions",
+            {"model": "placeholder"},
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+                azure_deployment="my-deployment"
+            ),
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/",
+            "/models",
+            {},
+            "https://example-resource.azure.openai.com/openai/models?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                azure_endpoint="https://example-resource.azure.openai.com",
+                azure_deployment="my-deployment"
+            ),
+            "https://example-resource.azure.openai.com/openai/deployments/my-deployment/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example-resource.azure.openai.com/openai/assistants?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU/deployments/my-deployment",
+            ),
+            "https://example.azure-api.net/PTU/deployments/my-deployment/",
+            "/chat/completions",
+            {"model": "placeholder"},
+            "https://example.azure-api.net/PTU/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU/deployments/my-deployment",
+            ),
+            "https://example.azure-api.net/PTU/deployments/my-deployment/",
+            "/models",
+            {},
+            "https://example.azure-api.net/PTU/models?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU/deployments/my-deployment",
+            ),
+            "https://example.azure-api.net/PTU/deployments/my-deployment/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example.azure-api.net/PTU/assistants?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU",
+            ),
+            "https://example.azure-api.net/PTU/",
+            "/chat/completions",
+            {"model": "my-deployment"},
+            "https://example.azure-api.net/PTU/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU",
+            ),
+            "https://example.azure-api.net/PTU/",
+            "/models",
+            {},
+            "https://example.azure-api.net/PTU/models?api-version=2024-02-01"
+        ),
+        (
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/PTU",
+            ),
+            "https://example.azure-api.net/PTU/",
+            "/assistants",
+            {"model": "gpt-4"},
+            "https://example.azure-api.net/PTU/assistants?api-version=2024-02-01"
+        ),
+        (   # The below test case fails -- even before the change in _prepare_url
+            AsyncAzureOpenAI(
+                api_version="2024-02-01",
+                api_key="example API key",
+                base_url="https://example.azure-api.net/deployments",
+            ),
+            "https://example.azure-api.net/deployments/",
+            "/chat/completions",
+            {"model": "my-deployment"},
+            "https://example.azure-api.net/deployments/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+        )
+    ],
+)
+def test_client_prepare_url(client: Client, base_url: str, api_path: str, json_data: dict[str, str], expected: str) -> None:
+    req = client._build_request(
+        FinalRequestOptions.construct(
+            method="post",
+            url=api_path,
+            json_data=json_data,
+        )
+    )
+    assert req.url == expected
+    assert client.base_url == base_url
+
+
+def test_client_sets_base_url(client: Client) -> None:
+    client = AzureOpenAI(
+        api_version="2024-02-01",
+        api_key="example API key",
+        azure_endpoint="https://example-resource.azure.openai.com",
+        azure_deployment="my-deployment"
+    )
+    assert client.base_url == "https://example-resource.azure.openai.com/openai/deployments/my-deployment/"
+    req = client._build_request(
+        FinalRequestOptions.construct(
+            method="post",
+            url="/chat/completions",
+            json_data= {"model": "placeholder"},
+        )
+    )
+    assert req.url == "https://example-resource.azure.openai.com/openai/deployments/my-deployment/chat/completions?api-version=2024-02-01"
+    req = client._build_request(
+        FinalRequestOptions.construct(
+            method="post",
+            url="/models",
+            json_data= {},
+        )
+    )
+    assert req.url == "https://example-resource.azure.openai.com/openai/models?api-version=2024-02-01"
+
+    # user sets base_url to target different endpoint
+    client.base_url = "https://example-resource.azure.openai.com/openai/deployments/different-deployment/"
+    req = client._build_request(
+        FinalRequestOptions.construct(
+            method="post",
+            url="/chat/completions",
+            json_data= {"model": "placeholder"},
+        )
+    )
+    assert req.url == "https://example-resource.azure.openai.com/openai/deployments/different-deployment/chat/completions?api-version=2024-02-01"
+    req = client._build_request(
+        FinalRequestOptions.construct(
+            method="post",
+            url="/models",
+            json_data= {},
+        )
+    )
+    assert req.url == "https://example-resource.azure.openai.com/openai/models?api-version=2024-02-01"
\ No newline at end of file