diff --git a/python/src/com/jetbrains/python/testing/universalTests/PyUniversalTests.kt b/python/src/com/jetbrains/python/testing/universalTests/PyUniversalTests.kt
index 1cce104a8d4e..545a606775ca 100644
--- a/python/src/com/jetbrains/python/testing/universalTests/PyUniversalTests.kt
+++ b/python/src/com/jetbrains/python/testing/universalTests/PyUniversalTests.kt
@@ -572,7 +572,7 @@ abstract class PyUniversalTestConfiguration(project: Project,
     // contains tests etc
     when (element) {
       is PyFile -> isTestFile(element)
-      is PsiDirectory -> element.children.any { it is PyFile && isTestFile(it) }
+      is PsiDirectory -> element.name.contains("test", true) || element.children.any { it is PyFile && isTestFile(it) }
       is PyFunction -> PythonUnitTestUtil.isTestCaseFunction(element, runBareFunctions)
       is PyClass -> PythonUnitTestUtil.isTestCaseClass(element, TypeEvalContext.userInitiated(element.project, element.containingFile))
       else -> false
diff --git a/python/testData/testRunner/env/createConfigurationTest/folder_with_word_tests_in_name/__init__.py b/python/testData/testRunner/env/createConfigurationTest/folder_with_word_tests_in_name/__init__.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/python/testSrc/com/jetbrains/env/python/testing/CreateConfigurationByFileTask.java b/python/testSrc/com/jetbrains/env/python/testing/CreateConfigurationByFileTask.java
index 8307cba57e25..189189b2feeb 100644
--- a/python/testSrc/com/jetbrains/env/python/testing/CreateConfigurationByFileTask.java
+++ b/python/testSrc/com/jetbrains/env/python/testing/CreateConfigurationByFileTask.java
@@ -55,7 +55,7 @@ class CreateConfigurationByFileTask<T extends AbstractPythonTestRunConfiguration
    */
   CreateConfigurationByFileTask(@Nullable final String testRunnerName,
                                 @NotNull final Class<T> expectedConfigurationType) {
-    this(testRunnerName, expectedConfigurationType, "test_file.py", "test_class.py");
+    this(testRunnerName, expectedConfigurationType, "test_file.py", "test_class.py", "folder_with_word_tests_in_name");
   }
 
   @NotNull