diff --git a/python/src/com/jetbrains/python/testing/PyTestsShared.kt b/python/src/com/jetbrains/python/testing/PyTestsShared.kt
index e4e5b9ed9841..59afe4452183 100644
--- a/python/src/com/jetbrains/python/testing/PyTestsShared.kt
+++ b/python/src/com/jetbrains/python/testing/PyTestsShared.kt
@@ -63,6 +63,7 @@ import com.jetbrains.python.run.*
 import com.jetbrains.python.run.targetBasedConfiguration.PyRunTargetVariant
 import com.jetbrains.python.run.targetBasedConfiguration.TargetWithVariant
 import com.jetbrains.python.run.targetBasedConfiguration.createRefactoringListenerIfPossible
+import com.jetbrains.python.run.targetBasedConfiguration.targetAsPsiElement
 import com.jetbrains.reflection.DelegationProperty
 import com.jetbrains.reflection.Properties
 import com.jetbrains.reflection.Property
@@ -756,7 +757,18 @@ object PyTestsConfigurationProducer : AbstractPythonTestConfigurationProducer<Py
     val psiElement = context?.psiLocation ?: return false
     val targetForConfig = PyTestsConfigurationProducer.getTargetForConfig(configuration,
                                                                           psiElement) ?: return false
-    return configuration.target == targetForConfig.first
+
+    if (configuration.target != targetForConfig.first) return false
+
+
+    //Even of both configurations have same targets, it could be that both have same qname which is resolved
+    // to different elements due to different working folders.
+    // Resolve them and check files
+    if (configuration.target.targetType != PyRunTargetVariant.PYTHON) return true
+
+    val targetPsi = targetAsPsiElement(configuration.target.targetType, configuration.target.target, configuration,
+                                       configuration.getWorkingDirectoryAsVirtual()) ?: return true
+    return targetPsi.containingFile == psiElement.containingFile
   }
 }
 
diff --git a/python/testData/testRunner/env/createConfigurationTest/configurationByContext/__init__.py b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/__init__.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/python/testData/testRunner/env/createConfigurationTest/configurationByContext/bar/__init__.py b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/bar/__init__.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/python/testData/testRunner/env/createConfigurationTest/configurationByContext/bar/test_test.py b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/bar/test_test.py
new file mode 100644
index 000000000000..da0cb95dfcb9
--- /dev/null
+++ b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/bar/test_test.py
@@ -0,0 +1,2 @@
+def test_test():
+        print("bar")
\ No newline at end of file
diff --git a/python/testData/testRunner/env/createConfigurationTest/configurationByContext/foo/__init__.py b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/foo/__init__.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/python/testData/testRunner/env/createConfigurationTest/configurationByContext/foo/test_test.py b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/foo/test_test.py
new file mode 100644
index 000000000000..45e7ef253fd8
--- /dev/null
+++ b/python/testData/testRunner/env/createConfigurationTest/configurationByContext/foo/test_test.py
@@ -0,0 +1,2 @@
+def test_test():
+    print("foo")
\ No newline at end of file
diff --git a/python/testSrc/com/jetbrains/env/python/testing/PythonPyTestingTest.java b/python/testSrc/com/jetbrains/env/python/testing/PythonPyTestingTest.java
index 7e3904d62c37..0fcc63573a01 100644
--- a/python/testSrc/com/jetbrains/env/python/testing/PythonPyTestingTest.java
+++ b/python/testSrc/com/jetbrains/env/python/testing/PythonPyTestingTest.java
@@ -17,6 +17,7 @@ import com.jetbrains.env.PyProcessWithConsoleTestTask;
 import com.jetbrains.env.python.testing.CreateConfigurationTestTask.PyConfigurationValidationTask;
 import com.jetbrains.env.ut.PyTestTestProcessRunner;
 import com.jetbrains.python.PyNames;
+import com.jetbrains.python.psi.PyFile;
 import com.jetbrains.python.psi.PyFunction;
 import com.jetbrains.python.run.targetBasedConfiguration.PyRunTargetVariant;
 import com.jetbrains.python.testing.ConfigurationTarget;
@@ -337,6 +338,47 @@ public final class PythonPyTestingTest extends PyEnvTestCase {
       new CreateConfigurationMultipleCasesTask<>(myFrameworkName, PyTestConfiguration.class));
   }
 
+  /**
+   * Create configuration by right click and check that same configuration is chosen when clicked on same element.
+   * New one created in other case.
+   */
+  @Test
+  public void testConfigurationByContext() {
+    runPythonTest(
+      new CreateConfigurationTestTask<PyTestConfiguration>(myFrameworkName, PyTestConfiguration.class) {
+
+        @NotNull
+        private PyFunction getFunction(@NotNull final String folder) {
+          final PyFile file = (PyFile)myFixture.configureByFile(String.format("configurationByContext/%s/test_test.py", folder));
+          assert file != null;
+          final PyFunction function = file.findTopLevelFunction("test_test");
+          assert function != null;
+          return function;
+        }
+
+        @Override
+        protected void checkConfiguration(@NotNull final PyTestConfiguration configuration,
+                                          @NotNull final PsiElement elementToRightClickOn) {
+
+
+          final PyTestConfiguration sameConfig = createConfigurationByElement(getFunction("bar"), PyTestConfiguration.class);
+          Assert.assertEquals("Same element must provide same config", sameConfig, configuration);
+
+          final PyTestConfiguration differentConfig = createConfigurationByElement(getFunction("foo"), PyTestConfiguration.class);
+          //Although targets are same, working dirs are different
+          assert differentConfig.getTarget().equals(configuration.getTarget());
+
+          Assert.assertNotEquals("Function from different folder must provide different config", differentConfig, configuration);
+        }
+
+        @NotNull
+        @Override
+        protected List<PsiElement> getPsiElementsToRightClickOn() {
+          return Collections.singletonList(getFunction("bar"));
+        }
+      });
+  }
+
   /**
    * Checks tests are resolved when launched from subfolder
    */