diff --git a/packages/playwright-test/src/cli.ts b/packages/playwright-test/src/cli.ts
index def8b74e27..baa3750732 100644
--- a/packages/playwright-test/src/cli.ts
+++ b/packages/playwright-test/src/cli.ts
@@ -20,10 +20,9 @@ import { Command } from 'commander';
 import fs from 'fs';
 import path from 'path';
 import type { Config } from './types';
-import { Runner, builtInReporters, BuiltInReporter } from './runner';
+import { Runner, builtInReporters, BuiltInReporter, kDefaultConfigFiles } from './runner';
 import { stopProfiling, startProfiling } from './profiler';
 import { FilePatternFilter } from './util';
-import { Loader } from './loader';
 import { showHTMLReport } from './reporters/html';
 import { GridServer } from 'playwright-core/lib/grid/gridServer';
 import dockerFactory from 'playwright-core/lib/grid/dockerGridFactory';
@@ -31,17 +30,6 @@ import { createGuid } from 'playwright-core/lib/utils/utils';
 
 const defaultTimeout = 30000;
 const defaultReporter: BuiltInReporter = process.env.CI ? 'dot' : 'list';
-const tsConfig = 'playwright.config.ts';
-const jsConfig = 'playwright.config.js';
-const mjsConfig = 'playwright.config.mjs';
-const defaultConfig: Config = {
-  preserveOutput: 'always',
-  reporter: [ [defaultReporter] ],
-  reportSlowTests: { max: 5, threshold: 15000 },
-  timeout: defaultTimeout,
-  updateSnapshots: 'missing',
-  workers: Math.ceil(require('os').cpus().length / 2),
-};
 
 export function addTestCommand(program: Command) {
   const command = program.command('test [test-filter...]');
@@ -49,7 +37,7 @@ export function addTestCommand(program: Command) {
   command.option('--browser <browser>', `Browser to use for tests, one of "all", "chromium", "firefox" or "webkit" (default: "chromium")`);
   command.option('--headed', `Run tests in headed browsers (default: headless)`);
   command.option('--debug', `Run tests with Playwright Inspector. Shortcut for "PWDEBUG=1" environment variable and "--timeout=0 --maxFailures=1 --headed --workers=1" options`);
-  command.option('-c, --config <file>', `Configuration file, or a test directory with optional "${tsConfig}"/"${jsConfig}"`);
+  command.option('-c, --config <file>', `Configuration file, or a test directory with optional ${kDefaultConfigFiles.map(file => `"${file}"`).join('/')}`);
   command.option('--forbid-only', `Fail if test.only is called (default: false)`);
   command.option('-g, --grep <grep>', `Only run tests matching this regular expression (default: ".*")`);
   command.option('-gv, --grep-invert <grep>', `Only run tests that do not match this regular expression`);
@@ -98,7 +86,18 @@ Examples:
   $ npx playwright show-report playwright-report`);
 }
 
-async function createLoader(opts: { [key: string]: any }): Promise<Loader> {
+async function runTests(args: string[], opts: { [key: string]: any }) {
+  await startProfiling();
+
+  const defaultConfig: Config = {
+    preserveOutput: 'always',
+    reporter: [ [defaultReporter] ],
+    reportSlowTests: { max: 5, threshold: 15000 },
+    timeout: defaultTimeout,
+    updateSnapshots: 'missing',
+    workers: Math.ceil(require('os').cpus().length / 2),
+  };
+
   if (opts.browser) {
     const browserOpt = opts.browser.toLowerCase();
     if (!['all', 'chromium', 'firefox', 'webkit'].includes(browserOpt))
@@ -122,55 +121,14 @@ async function createLoader(opts: { [key: string]: any }): Promise<Loader> {
     process.env.PWDEBUG = '1';
   }
 
-  const loader = new Loader(defaultConfig, overrides);
+  const runner = new Runner(overrides, defaultConfig);
 
-  async function loadConfig(configFile: string) {
-    if (fs.existsSync(configFile)) {
-      if (process.stdout.isTTY)
-        console.log(`Using config at ` + configFile);
-      const loadedConfig = await loader.loadConfigFile(configFile);
-      if (('projects' in loadedConfig) && opts.browser)
-        throw new Error(`Cannot use --browser option when configuration file defines projects. Specify browserName in the projects instead.`);
-      return true;
-    }
-    return false;
-  }
+  // When no --config option is passed, let's look for the config file in the current directory.
+  const configFile = opts.config ? path.resolve(process.cwd(), opts.config) : process.cwd();
+  const config = await runner.loadConfigFromFile(configFile);
+  if (('projects' in config) && opts.browser)
+    throw new Error(`Cannot use --browser option when configuration file defines projects. Specify browserName in the projects instead.`);
 
-  async function loadConfigFromDirectory(directory: string) {
-    const configNames = [tsConfig, jsConfig, mjsConfig];
-    for (const configName of configNames) {
-      if (await loadConfig(path.resolve(directory, configName)))
-        return true;
-    }
-    return false;
-  }
-
-  if (opts.config) {
-    const configFile = path.resolve(process.cwd(), opts.config);
-    if (!fs.existsSync(configFile))
-      throw new Error(`${opts.config} does not exist`);
-    if (fs.statSync(configFile).isDirectory()) {
-      // When passed a directory, look for a config file inside.
-      if (!await loadConfigFromDirectory(configFile)) {
-        // If there is no config, assume this as a root testing directory.
-        loader.loadEmptyConfig(configFile);
-      }
-    } else {
-      // When passed a file, it must be a config file.
-      await loadConfig(configFile);
-    }
-  } else if (!await loadConfigFromDirectory(process.cwd())) {
-    // No --config option, let's look for the config file in the current directory.
-    // If not, scan the world.
-    loader.loadEmptyConfig(process.cwd());
-  }
-  return loader;
-}
-
-async function runTests(args: string[], opts: { [key: string]: any }) {
-  await startProfiling();
-
-  const loader = await createLoader(opts);
   const filePatternFilters: FilePatternFilter[] = args.map(arg => {
     const match = /^(.*):(\d+)$/.exec(arg);
     return {
@@ -179,7 +137,6 @@ async function runTests(args: string[], opts: { [key: string]: any }) {
     };
   });
 
-  const runner = new Runner(loader);
   if (process.env.PLAYWRIGHT_DOCKER)
     runner.addInternalGlobalSetup(launchDockerContainer);
   const result = await runner.run(!!opts.list, filePatternFilters, opts.project || undefined);
diff --git a/packages/playwright-test/src/loader.ts b/packages/playwright-test/src/loader.ts
index f344196e56..21abc096ac 100644
--- a/packages/playwright-test/src/loader.ts
+++ b/packages/playwright-test/src/loader.ts
@@ -68,9 +68,10 @@ export class Loader {
     return rawConfig;
   }
 
-  loadEmptyConfig(rootDir: string) {
+  loadEmptyConfig(rootDir: string): Config {
     this._config = {};
     this._processConfigObject(rootDir);
+    return {};
   }
 
   private _processConfigObject(rootDir: string) {
diff --git a/packages/playwright-test/src/runner.ts b/packages/playwright-test/src/runner.ts
index 6d3ba0e793..e2149a33e0 100644
--- a/packages/playwright-test/src/runner.ts
+++ b/packages/playwright-test/src/runner.ts
@@ -35,13 +35,14 @@ import EmptyReporter from './reporters/empty';
 import HtmlReporter from './reporters/html';
 import { ProjectImpl } from './project';
 import { Minimatch } from 'minimatch';
-import { FullConfig } from './types';
+import { Config, FullConfig } from './types';
 import { WebServer } from './webServer';
 import { raceAgainstDeadline } from 'playwright-core/lib/utils/async';
 
 const removeFolderAsync = promisify(rimraf);
 const readDirAsync = promisify(fs.readdir);
 const readFileAsync = promisify(fs.readFile);
+export const kDefaultConfigFiles = ['playwright.config.ts', 'playwright.config.js', 'playwright.config.mjs'];
 
 type InternalGlobalSetupFunction = () => Promise<() => Promise<void>>;
 
@@ -51,8 +52,42 @@ export class Runner {
   private _didBegin = false;
   private _internalGlobalSetups: Array<InternalGlobalSetupFunction> = [];
 
-  constructor(loader: Loader) {
-    this._loader = loader;
+  constructor(configOverrides: Config, defaultConfig: Config = {}) {
+    this._loader = new Loader(defaultConfig, configOverrides);
+  }
+
+  async loadConfigFromFile(configFileOrDirectory: string): Promise<Config> {
+    const loadConfig = async (configFile: string) => {
+      if (fs.existsSync(configFile)) {
+        if (process.stdout.isTTY)
+          console.log(`Using config at ` + configFile);
+        const config = await this._loader.loadConfigFile(configFile);
+        return config;
+      }
+    };
+
+    const loadConfigFromDirectory = async (directory: string) => {
+      for (const configName of kDefaultConfigFiles) {
+        const config = await loadConfig(path.resolve(directory, configName));
+        if (config)
+          return config;
+      }
+    };
+
+    if (!fs.existsSync(configFileOrDirectory))
+      throw new Error(`${configFileOrDirectory} does not exist`);
+    if (fs.statSync(configFileOrDirectory).isDirectory()) {
+      // When passed a directory, look for a config file inside.
+      const config = await loadConfigFromDirectory(configFileOrDirectory);
+      if (config)
+        return config;
+      // If there is no config, assume this as a root testing directory.
+      return this._loader.loadEmptyConfig(configFileOrDirectory);
+    } else {
+      // When passed a file, it must be a config file.
+      const config = await loadConfig(configFileOrDirectory);
+      return config!;
+    }
   }
 
   private async _createReporter(list: boolean) {