diff --git a/java/java-tests/testData/configurationStore/module-in-sub-group/.idea/modules.xml b/java/java-tests/testData/configurationStore/module-in-sub-group/.idea/modules.xml
new file mode 100644
index 000000000000..0aba3e2aca56
--- /dev/null
+++ b/java/java-tests/testData/configurationStore/module-in-sub-group/.idea/modules.xml
@@ -0,0 +1,8 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="ProjectModuleManager">
+    <modules>
+      <module fileurl="file://$PROJECT_DIR$/foo/foo.iml" filepath="$PROJECT_DIR$/foo/foo.iml" group="group/subGroup" />
+    </modules>
+  </component>
+</project>
\ No newline at end of file
diff --git a/java/java-tests/testData/configurationStore/module-in-sub-group/foo/foo.iml b/java/java-tests/testData/configurationStore/module-in-sub-group/foo/foo.iml
new file mode 100644
index 000000000000..70ec6cce375a
--- /dev/null
+++ b/java/java-tests/testData/configurationStore/module-in-sub-group/foo/foo.iml
@@ -0,0 +1,7 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<module type="EMPTY_MODULE" version="4">
+  <component name="NewModuleRootManager" inherit-compiler-output="true">
+    <exclude-output />
+    <orderEntry type="sourceFolder" forTests="false" />
+  </component>
+</module>
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/configurationStore/SaveProjectTest.kt b/java/java-tests/testSrc/com/intellij/java/configurationStore/SaveProjectTest.kt
index b1c49e75cfc2..bac5a2f411c5 100644
--- a/java/java-tests/testSrc/com/intellij/java/configurationStore/SaveProjectTest.kt
+++ b/java/java-tests/testSrc/com/intellij/java/configurationStore/SaveProjectTest.kt
@@ -10,7 +10,6 @@ import com.intellij.testFramework.rules.ProjectModelRule
 import com.intellij.util.io.assertMatches
 import com.intellij.util.io.directoryContentOf
 import com.intellij.util.io.systemIndependentPath
-import kotlinx.coroutines.runBlocking
 import org.junit.ClassRule
 import org.junit.Rule
 import org.junit.Test
@@ -41,14 +40,25 @@ class SaveProjectTest {
   @Test
   fun `save module with group`() {
     val module = projectModel.createModule("foo")
-    runWriteActionAndWait {
-      val model = projectModel.moduleManager.modifiableModel
-      model.setModuleGroupPath(module, arrayOf("group"))
-      model.commit()
+    fun setGroupPath(path: Array<String>?) {
+      runWriteActionAndWait {
+        val model = projectModel.moduleManager.modifiableModel
+        model.setModuleGroupPath(module, path)
+        model.commit()
+      }
     }
 
+    setGroupPath(arrayOf("group"))
     projectModel.saveProjectState()
     projectModel.baseProjectDir.root.assertMatches(directoryContentOf(configurationStoreTestDataRoot.resolve("module-in-group")))
+
+    setGroupPath(arrayOf("group", "subGroup"))
+    projectModel.saveProjectState()
+    projectModel.baseProjectDir.root.assertMatches(directoryContentOf(configurationStoreTestDataRoot.resolve("module-in-sub-group")))
+
+    setGroupPath(null)
+    projectModel.saveProjectState()
+    projectModel.baseProjectDir.root.assertMatches(directoryContentOf(configurationStoreTestDataRoot.resolve("single-module")))
   }
 
   @Test
diff --git a/platform/workspaceModel/ide/src/com/intellij/workspaceModel/ide/impl/jps/serialization/JpsProjectSerializersImpl.kt b/platform/workspaceModel/ide/src/com/intellij/workspaceModel/ide/impl/jps/serialization/JpsProjectSerializersImpl.kt
index e4a550c91e6a..16152dddf4da 100644
--- a/platform/workspaceModel/ide/src/com/intellij/workspaceModel/ide/impl/jps/serialization/JpsProjectSerializersImpl.kt
+++ b/platform/workspaceModel/ide/src/com/intellij/workspaceModel/ide/impl/jps/serialization/JpsProjectSerializersImpl.kt
@@ -23,6 +23,7 @@ import com.intellij.workspaceModel.storage.WorkspaceEntityStorage
 import com.intellij.workspaceModel.storage.WorkspaceEntityStorageBuilder
 import com.intellij.workspaceModel.storage.bridgeEntities.FacetEntity
 import com.intellij.workspaceModel.storage.bridgeEntities.ModuleEntity
+import com.intellij.workspaceModel.storage.bridgeEntities.ModuleGroupPathEntity
 import com.intellij.workspaceModel.storage.url.VirtualFileUrl
 import com.intellij.workspaceModel.storage.url.VirtualFileUrlManager
 import it.unimi.dsi.fastutil.ints.Int2ObjectOpenHashMap
@@ -396,14 +397,26 @@ class JpsProjectSerializersImpl(directorySerializersFactories: List<JpsDirectory
       }
       val url = actualFileSource?.let { getActualFileUrl(it) }
       val internalSource = getInternalFileSource(source)
-      if (url != null && internalSource != null && url !in fileSerializersByUrl.keys
-          && (ModuleEntity::class.java in entities || FacetEntity::class.java in entities)) {
-        moduleListSerializersByUrl.values.forEach { moduleListSerializer ->
-          if (moduleListSerializer.entitySourceFilter(source)) {
-            val newSerializer = moduleListSerializer.createSerializer(internalSource, virtualFileManager.fromUrl(url), null)
-            fileSerializersByUrl.put(url, newSerializer)
-            moduleSerializers[newSerializer] = moduleListSerializer
-            affectedFileFactories.add(moduleListSerializer)
+      if (url != null && internalSource != null
+          && (ModuleEntity::class.java in entities || FacetEntity::class.java in entities || ModuleGroupPathEntity::class.java in entities)) {
+        val existingSerializers = fileSerializersByUrl.getValues(url)
+        val moduleGroup = (entities[ModuleGroupPathEntity::class.java]?.first() as? ModuleGroupPathEntity)?.path?.joinToString("/")
+        if (existingSerializers.isEmpty() || existingSerializers.any { it is ModuleImlFileEntitiesSerializer && it.modulePath.group != moduleGroup }) {
+          moduleListSerializersByUrl.values.forEach { moduleListSerializer ->
+            if (moduleListSerializer.entitySourceFilter(source)) {
+              if (existingSerializers.isNotEmpty()) {
+                existingSerializers.forEach {
+                  if (it is ModuleImlFileEntitiesSerializer) {
+                    moduleSerializers.remove(it)
+                    fileSerializersByUrl.remove(url, it)
+                  }
+                }
+              }
+              val newSerializer = moduleListSerializer.createSerializer(internalSource, virtualFileManager.fromUrl(url), moduleGroup)
+              fileSerializersByUrl.put(url, newSerializer)
+              moduleSerializers[newSerializer] = moduleListSerializer
+              affectedFileFactories.add(moduleListSerializer)
+            }
           }
         }
       }