diff --git a/packages/playwright/src/common/configLoader.ts b/packages/playwright/src/common/configLoader.ts
index 08a9c0a48d..de568114a1 100644
--- a/packages/playwright/src/common/configLoader.ts
+++ b/packages/playwright/src/common/configLoader.ts
@@ -286,7 +286,16 @@ function validateProject(file: string, project: Project, title: string) {
   }
 }
 
-export function resolveConfigFile(configFileOrDirectory: string): string | undefined {
+export function resolveConfigLocation(configFile: string | undefined): ConfigLocation {
+  const configFileOrDirectory = configFile ? path.resolve(process.cwd(), configFile) : process.cwd();
+  const resolvedConfigFile = resolveConfigFile(configFileOrDirectory);
+  return {
+    resolvedConfigFile,
+    configDir: resolvedConfigFile ? path.dirname(resolvedConfigFile) : configFileOrDirectory,
+  };
+}
+
+function resolveConfigFile(configFileOrDirectory: string): string | undefined {
   const resolveConfig = (configFile: string) => {
     if (fs.existsSync(configFile))
       return configFile;
@@ -309,22 +318,15 @@ export function resolveConfigFile(configFileOrDirectory: string): string | undef
       return configFile;
     // If there is no config, assume this as a root testing directory.
     return undefined;
-  } else {
-    // When passed a file, it must be a config file.
-    const configFile = resolveConfig(configFileOrDirectory);
-    return configFile!;
   }
+  // When passed a file, it must be a config file.
+  return configFileOrDirectory!;
 }
 
 export async function loadConfigFromFileRestartIfNeeded(configFile: string | undefined, overrides?: ConfigCLIOverrides, ignoreDeps?: boolean): Promise<FullConfigInternal | null> {
-  const configFileOrDirectory = configFile ? path.resolve(process.cwd(), configFile) : process.cwd();
-  const resolvedConfigFile = resolveConfigFile(configFileOrDirectory);
-  if (restartWithExperimentalTsEsm(resolvedConfigFile))
+  const location = resolveConfigLocation(configFile);
+  if (restartWithExperimentalTsEsm(location.resolvedConfigFile))
     return null;
-  const location: ConfigLocation = {
-    configDir: resolvedConfigFile ? path.dirname(resolvedConfigFile) : configFileOrDirectory,
-    resolvedConfigFile,
-  };
   return await loadConfig(location, overrides, ignoreDeps);
 }
 
diff --git a/packages/playwright/src/runner/testServer.ts b/packages/playwright/src/runner/testServer.ts
index da1584de96..19a43beed0 100644
--- a/packages/playwright/src/runner/testServer.ts
+++ b/packages/playwright/src/runner/testServer.ts
@@ -21,7 +21,7 @@ import { ManualPromise, gracefullyProcessExitDoNotHang, isUnderTest } from 'play
 import type { Transport, HttpServer } from 'playwright-core/lib/utils';
 import type * as reporterTypes from '../../types/testReporter';
 import { collectAffectedTestFiles, dependenciesForTestFile } from '../transform/compilationCache';
-import type { FullConfigInternal } from '../common/config';
+import type { ConfigLocation, FullConfigInternal } from '../common/config';
 import { InternalReporter } from '../reporters/internalReporter';
 import { createReporterForTestServer, createReporters } from './reporters';
 import { TestRun, createTaskRunnerForList, createTaskRunnerForTestServer, createTaskRunnerForWatchSetup, createTaskRunnerForListFiles } from './tasks';
@@ -33,7 +33,7 @@ import { Watcher } from '../fsWatcher';
 import type { ReportEntry, TestServerInterface, TestServerInterfaceEventEmitters } from '../isomorphic/testServerInterface';
 import { Runner } from './runner';
 import type { ConfigCLIOverrides } from '../common/ipc';
-import { loadConfig, resolveConfigFile, restartWithExperimentalTsEsm } from '../common/configLoader';
+import { loadConfig, resolveConfigLocation, restartWithExperimentalTsEsm } from '../common/configLoader';
 import { webServerPluginsForConfig } from '../plugins/webServerPlugin';
 import type { TraceViewerRedirectOptions, TraceViewerServerOptions } from 'playwright-core/lib/server/trace/viewer/traceViewer';
 import type { TestRunnerPluginRegistration } from '../plugins';
@@ -44,15 +44,15 @@ const originalStdoutWrite = process.stdout.write;
 const originalStderrWrite = process.stderr.write;
 
 class TestServer {
-  private _configFile: string | undefined;
+  private _configLocation: ConfigLocation;
   private _dispatcher: TestServerDispatcher | undefined;
 
-  constructor(configFile: string | undefined) {
-    this._configFile = configFile;
+  constructor(configLocation: ConfigLocation) {
+    this._configLocation = configLocation;
   }
 
   async start(options: { host?: string, port?: number }): Promise<HttpServer> {
-    this._dispatcher = new TestServerDispatcher(this._configFile);
+    this._dispatcher = new TestServerDispatcher(this._configLocation);
     return await startTraceViewerServer({ ...options, transport: this._dispatcher.transport });
   }
 
@@ -63,7 +63,7 @@ class TestServer {
 }
 
 class TestServerDispatcher implements TestServerInterface {
-  private _configFile: string | undefined;
+  private _configLocation: ConfigLocation;
   private _globalWatcher: Watcher;
   private _testWatcher: Watcher;
   private _testRun: { run: Promise<reporterTypes.FullResult['status']>, stop: ManualPromise<void> } | undefined;
@@ -77,8 +77,8 @@ class TestServerDispatcher implements TestServerInterface {
   private _closeOnDisconnect = false;
   private _devServerHandle: (() => Promise<void>) | undefined;
 
-  constructor(configFile: string | undefined) {
-    this._configFile = configFile;
+  constructor(configLocation: ConfigLocation) {
+    this._configLocation = configLocation;
     this.transport = {
       dispatch: (method, params) => (this as any)[method](params),
       onclose: () => {
@@ -145,7 +145,7 @@ class TestServerDispatcher implements TestServerInterface {
     await this.runGlobalTeardown();
 
     const { reporter, report } = await this._collectingReporter();
-    const { config, error } = await this._loadConfig(this._configFile);
+    const { config, error } = await this._loadConfig();
     if (!config) {
       reporter.onError(error!);
       return { status: 'failed', report };
@@ -178,7 +178,7 @@ class TestServerDispatcher implements TestServerInterface {
     if (this._devServerHandle)
       return { status: 'failed', report: [] };
     const { reporter, report } = await this._collectingReporter();
-    const { config, error } = await this._loadConfig(this._configFile);
+    const { config, error } = await this._loadConfig();
     if (!config) {
       reporter.onError(error!);
       return { status: 'failed', report };
@@ -212,14 +212,14 @@ class TestServerDispatcher implements TestServerInterface {
   }
 
   async clearCache(params: Parameters<TestServerInterface['clearCache']>[0]): ReturnType<TestServerInterface['clearCache']> {
-    const { config } = await this._loadConfig(this._configFile);
+    const { config } = await this._loadConfig();
     if (config)
       await clearCacheAndLogToConsole(config);
   }
 
   async listFiles(params: Parameters<TestServerInterface['listFiles']>[0]): ReturnType<TestServerInterface['listFiles']> {
     const { reporter, report } = await this._collectingReporter();
-    const { config, error } = await this._loadConfig(this._configFile);
+    const { config, error } = await this._loadConfig();
     if (!config) {
       reporter.onError(error!);
       return { status: 'failed', report };
@@ -250,7 +250,7 @@ class TestServerDispatcher implements TestServerInterface {
       retries: 0,
     };
     const { reporter, report } = await this._collectingReporter();
-    const { config, error } = await this._loadConfig(this._configFile, overrides);
+    const { config, error } = await this._loadConfig(overrides);
     if (!config) {
       reporter.onError(error!);
       return { report: [], status: 'failed' };
@@ -315,7 +315,7 @@ class TestServerDispatcher implements TestServerInterface {
     else
       process.env.PW_LIVE_TRACE_STACKS = undefined;
 
-    const { config, error } = await this._loadConfig(this._configFile, overrides);
+    const { config, error } = await this._loadConfig(overrides);
     if (!config) {
       const wireReporter = await this._wireReporter(e => this._dispatchEvent('report', e));
       wireReporter.onError(error!);
@@ -359,7 +359,7 @@ class TestServerDispatcher implements TestServerInterface {
   }
 
   async findRelatedTestFiles(params: Parameters<TestServerInterface['findRelatedTestFiles']>[0]): ReturnType<TestServerInterface['findRelatedTestFiles']> {
-    const { config, error } = await this._loadConfig(this._configFile);
+    const { config, error } = await this._loadConfig();
     if (error)
       return { testFiles: [], errors: [error] };
     const runner = new Runner(config!);
@@ -393,11 +393,9 @@ class TestServerDispatcher implements TestServerInterface {
     gracefullyProcessExitDoNotHang(0);
   }
 
-  private async _loadConfig(configFile: string | undefined, overrides?: ConfigCLIOverrides): Promise<{ config: FullConfigInternal | null, error?: reporterTypes.TestError }> {
-    const configFileOrDirectory = configFile ? path.resolve(process.cwd(), configFile) : process.cwd();
-    const resolvedConfigFile = resolveConfigFile(configFileOrDirectory);
+  private async _loadConfig(overrides?: ConfigCLIOverrides): Promise<{ config: FullConfigInternal | null, error?: reporterTypes.TestError }> {
     try {
-      const config = await loadConfig({ resolvedConfigFile, configDir: resolvedConfigFile === configFileOrDirectory ? path.dirname(resolvedConfigFile) : configFileOrDirectory  }, overrides);
+      const config = await loadConfig(this._configLocation, overrides);
       // Preserve plugin instances between setup and build.
       if (!this._plugins)
         this._plugins = config.plugins || [];
@@ -411,7 +409,8 @@ class TestServerDispatcher implements TestServerInterface {
 }
 
 export async function runUIMode(configFile: string | undefined, options: TraceViewerServerOptions & TraceViewerRedirectOptions): Promise<reporterTypes.FullResult['status'] | 'restarted'> {
-  return await innerRunTestServer(configFile, options, async (server: HttpServer, cancelPromise: ManualPromise<void>) => {
+  const configLocation = resolveConfigLocation(configFile);
+  return await innerRunTestServer(configLocation, options, async (server: HttpServer, cancelPromise: ManualPromise<void>) => {
     await installRootRedirect(server, [], { ...options, webApp: 'uiMode.html' });
     if (options.host !== undefined || options.port !== undefined) {
       await openTraceInBrowser(server.urlPrefix());
@@ -428,23 +427,24 @@ export async function runUIMode(configFile: string | undefined, options: TraceVi
 }
 
 export async function runTestServer(configFile: string | undefined, options: { host?: string, port?: number }): Promise<reporterTypes.FullResult['status'] | 'restarted'> {
-  return await innerRunTestServer(configFile, options, async server => {
+  const configLocation = resolveConfigLocation(configFile);
+  return await innerRunTestServer(configLocation, options, async server => {
     // eslint-disable-next-line no-console
     console.log('Listening on ' + server.urlPrefix().replace('http:', 'ws:') + '/' + server.wsGuid());
   });
 }
 
-async function innerRunTestServer(configFile: string | undefined, options: { host?: string, port?: number }, openUI: (server: HttpServer, cancelPromise: ManualPromise<void>) => Promise<void>): Promise<reporterTypes.FullResult['status'] | 'restarted'> {
+async function innerRunTestServer(configLocation: ConfigLocation, options: { host?: string, port?: number }, openUI: (server: HttpServer, cancelPromise: ManualPromise<void>, configLocation: ConfigLocation) => Promise<void>): Promise<reporterTypes.FullResult['status'] | 'restarted'> {
   if (restartWithExperimentalTsEsm(undefined, true))
     return 'restarted';
-  const testServer = new TestServer(configFile);
+  const testServer = new TestServer(configLocation);
   const cancelPromise = new ManualPromise<void>();
   const sigintWatcher = new SigIntWatcher();
   process.stdin.on('close', () => gracefullyProcessExitDoNotHang(0));
   void sigintWatcher.promise().then(() => cancelPromise.resolve());
   try {
     const server = await testServer.start(options);
-    await openUI(server, cancelPromise);
+    await openUI(server, cancelPromise, configLocation);
     await cancelPromise;
   } finally {
     await testServer.stop();