diff --git a/packages/playwright-test/src/common/config.ts b/packages/playwright-test/src/common/config.ts
index 198eff70ac..6de5ea0e68 100644
--- a/packages/playwright-test/src/common/config.ts
+++ b/packages/playwright-test/src/common/config.ts
@@ -164,7 +164,9 @@ export class FullProjectInternal {
       grep: takeFirst(projectConfig.grep, config.grep, defaultGrep),
       grepInvert: takeFirst(projectConfig.grepInvert, config.grepInvert, null),
       outputDir: takeFirst(configCLIOverrides.outputDir, pathResolve(configDir, projectConfig.outputDir), pathResolve(configDir, config.outputDir), path.join(throwawayArtifactsPath, 'test-results')),
-      repeatEach: takeFirst(configCLIOverrides.repeatEach, projectConfig.repeatEach, config.repeatEach, 1),
+      // Note: we either apply the cli override for repeatEach or not, depending on whether the
+      // project is top-level vs dependency. See collectProjectsAndTestFiles in loadUtils.
+      repeatEach: takeFirst(projectConfig.repeatEach, config.repeatEach, 1),
       retries: takeFirst(configCLIOverrides.retries, projectConfig.retries, config.retries, 0),
       metadata: takeFirst(projectConfig.metadata, config.metadata, undefined),
       name: takeFirst(projectConfig.name, config.name, ''),
diff --git a/packages/playwright-test/src/runner/loadUtils.ts b/packages/playwright-test/src/runner/loadUtils.ts
index 8a5b9a7b77..202c7ad403 100644
--- a/packages/playwright-test/src/runner/loadUtils.ts
+++ b/packages/playwright-test/src/runner/loadUtils.ts
@@ -73,6 +73,12 @@ export async function collectProjectsAndTestFiles(testRun: TestRun, additionalFi
     }
   }
 
+  // Apply overrides that are only applicable to top-level projects.
+  for (const [project, type] of projectClosure) {
+    if (type === 'top-level')
+      project.project.repeatEach = project.fullConfig.configCLIOverrides.repeatEach ?? project.project.repeatEach;
+  }
+
   testRun.projects = [...filesToRunByProject.keys()];
   testRun.projectFiles = filesToRunByProject;
   testRun.projectType = projectClosure;
diff --git a/tests/playwright-test/deps.spec.ts b/tests/playwright-test/deps.spec.ts
index 57a3ce5783..5c10b4b850 100644
--- a/tests/playwright-test/deps.spec.ts
+++ b/tests/playwright-test/deps.spec.ts
@@ -559,3 +559,25 @@ test('should complain about teardown used multiple times', async ({ runInlineTes
   expect(result.exitCode).toBe(1);
   expect(result.output).toContain(`Project C can not be designated as teardown to multiple projects (A and B)`);
 });
+
+test('should only apply --repeat-each to top-level', async ({ runInlineTest }) => {
+  const result = await runInlineTest({
+    'playwright.config.ts': `
+      module.exports = {
+        projects: [
+          { name: 'A' },
+          { name: 'B', dependencies: ['A'] },
+          { name: 'C', dependencies: ['A'] },
+        ],
+      };`,
+    'test.spec.ts': `
+      import { test, expect } from '@playwright/test';
+      test('test', async ({}, testInfo) => {
+        console.log('\\n%%' + testInfo.project.name);
+      });
+    `,
+  }, { 'workers': 1, 'repeat-each': 2 });
+  expect(result.exitCode).toBe(0);
+  expect(result.passed).toBe(5);
+  expect(result.outputLines).toEqual(['A', 'B', 'B', 'C', 'C']);
+});