diff --git a/python/testData/testRunner/env/pytest/config/MyConfig.xml b/python/testData/testRunner/env/pytest/config/MyConfig.xml
new file mode 100644
index 000000000000..6133b0e6479b
--- /dev/null
+++ b/python/testData/testRunner/env/pytest/config/MyConfig.xml
@@ -0,0 +1,16 @@
+<configuration default="false" name="MyConfig" type="tests" factoryName="py.test">
+  <module name="tst"/>
+  <option name="INTERPRETER_OPTIONS" value=""/>
+  <option name="PARENT_ENVS" value="true"/>
+  <option name="SDK_HOME" value="C:\temp\tst\venv\Scripts\python.exe"/>
+  <option name="WORKING_DIRECTORY" value=""/>
+  <option name="IS_MODULE_SDK" value="false"/>
+  <option name="ADD_CONTENT_ROOTS" value="true"/>
+  <option name="ADD_SOURCE_ROOTS" value="true"/>
+  <EXTENSION ID="PythonCoverageRunConfigurationExtension" runner="coverage.py"/>
+  <option name="_new_keywords" value="&quot;keywords&quot;"/>
+  <option name="_new_additionalArguments" value="&quot;--additional-args&quot;"/>
+  <option name="_new_target" value="&quot;foo.py&quot;"/>
+  <option name="_new_targetType" value="&quot;PATH&quot;"/>
+  <method/>
+</configuration>
\ No newline at end of file
diff --git a/python/testData/testRunner/env/pytest/config/MyConfigWithCustom.xml b/python/testData/testRunner/env/pytest/config/MyConfigWithCustom.xml
new file mode 100644
index 000000000000..c4d37f296d26
--- /dev/null
+++ b/python/testData/testRunner/env/pytest/config/MyConfigWithCustom.xml
@@ -0,0 +1,16 @@
+<configuration default="false" name="MyConfigWithCustom" type="tests" factoryName="py.test">
+  <module name="tst"/>
+  <option name="INTERPRETER_OPTIONS" value=""/>
+  <option name="PARENT_ENVS" value="true"/>
+  <option name="SDK_HOME" value="C:\temp\tst\venv\Scripts\python.exe"/>
+  <option name="WORKING_DIRECTORY" value=""/>
+  <option name="IS_MODULE_SDK" value="false"/>
+  <option name="ADD_CONTENT_ROOTS" value="true"/>
+  <option name="ADD_SOURCE_ROOTS" value="true"/>
+  <EXTENSION ID="PythonCoverageRunConfigurationExtension" runner="coverage.py"/>
+  <option name="_new_keywords" value="&quot;keywords&quot;"/>
+  <option name="_new_additionalArguments" value="&quot;--additional-args&quot;"/>
+  <option name="_new_target" value="&quot;spam&quot;"/>
+  <option name="_new_targetType" value="&quot;CUSTOM&quot;"/>
+  <method/>
+</configuration>
\ 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 5f95549c87a8..a00adf4cd522 100644
--- a/python/testSrc/com/jetbrains/env/python/testing/PythonPyTestingTest.java
+++ b/python/testSrc/com/jetbrains/env/python/testing/PythonPyTestingTest.java
@@ -11,22 +11,31 @@ import com.intellij.testFramework.fixtures.CodeInsightTestFixture;
 import com.intellij.util.PathUtil;
 import com.jetbrains.env.EnvTestTagsRequired;
 import com.jetbrains.env.PyEnvTestCase;
+import com.jetbrains.env.PyExecutionFixtureTestTask;
 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.PyFunction;
 import com.jetbrains.python.run.targetBasedConfiguration.PyRunTargetVariant;
+import com.jetbrains.python.testing.ConfigurationTarget;
 import com.jetbrains.python.testing.PyTestConfiguration;
 import com.jetbrains.python.testing.PyTestFactory;
 import com.jetbrains.python.testing.PyTestFrameworkService;
 import com.jetbrains.python.tools.sdkTools.SdkCreationType;
 import org.hamcrest.Matchers;
+import org.jdom.Element;
+import org.jdom.JDOMException;
+import org.jdom.input.SAXBuilder;
 import org.jetbrains.annotations.NotNull;
 import org.junit.Assert;
 import org.junit.Test;
 
 import java.io.IOException;
+import java.io.StringReader;
+import java.nio.ByteBuffer;
+import java.nio.CharBuffer;
+import java.nio.charset.Charset;
 import java.util.Collections;
 import java.util.List;
 
@@ -54,6 +63,42 @@ public final class PythonPyTestingTest extends PyEnvTestCase {
     });
   }
 
+  /**
+   * Provides existing .xml and checks that configuration is able to parse it
+   */
+  @Test
+  public void testDeserialization() {
+    runPythonTest(new PyExecutionFixtureTestTask("testRunner/env/pytest/config/") {
+      @Override
+      public void runTestOn(String sdkHome) throws Exception {
+        final PyTestConfiguration configuration = configureByFile("MyConfig.xml");
+        assertEquals("Wrong target type", new ConfigurationTarget("foo.py", PyRunTargetVariant.PATH), configuration.getTarget());
+        assertEquals("Wrong keywords", "keywords", configuration.getKeywords());
+        assertEquals("Wrong arguments", "--additional-args", configuration.getAdditionalArguments());
+
+
+        final PyTestConfiguration configurationWithCustom = configureByFile("MyConfigWithCustom.xml");
+        assertEquals("Wrong target type", new ConfigurationTarget("spam", PyRunTargetVariant.CUSTOM), configurationWithCustom.getTarget());
+        assertEquals("Wrong keywords", "keywords", configurationWithCustom.getKeywords());
+        assertEquals("Wrong arguments", "--additional-args", configurationWithCustom.getAdditionalArguments());
+      }
+
+      @NotNull
+      private PyTestConfiguration configureByFile(@NotNull final String path) throws IOException, JDOMException {
+        final VirtualFile file = myFixture.getTempDirFixture().getFile(path);
+        assert file != null : "No config found";
+
+        final SAXBuilder builder = new SAXBuilder();
+        final CharBuffer data = Charset.defaultCharset().decode(ByteBuffer.wrap(file.contentsToByteArray()));
+        final Element element = builder.build(new StringReader(data.toString())).getRootElement();
+
+        final PyTestConfiguration configuration = new PyTestConfiguration(myFixture.getProject(), PyTestFactory.INSTANCE);
+        configuration.readExternal(element);
+        return configuration;
+      }
+    });
+  }
+
   /**
    * Ensures that python target pointing to module works correctly
    */
@@ -116,7 +161,8 @@ public final class PythonPyTestingTest extends PyEnvTestCase {
   @Test
   public void testTestNameBeforeTestStarted() {
     runPythonTest(
-      new PyProcessWithConsoleTestTask<PyTestTestProcessRunner>("/testRunner/env/pytest/testNameBeforeTestStarted", SdkCreationType.EMPTY_SDK) {
+      new PyProcessWithConsoleTestTask<PyTestTestProcessRunner>("/testRunner/env/pytest/testNameBeforeTestStarted",
+                                                                SdkCreationType.EMPTY_SDK) {
 
         @NotNull
         @Override