diff --git a/packages/playwright-test/src/util.ts b/packages/playwright-test/src/util.ts
index 0d5274eb8a..11da8cc48b 100644
--- a/packages/playwright-test/src/util.ts
+++ b/packages/playwright-test/src/util.ts
@@ -141,7 +141,7 @@ export function expectType(receiver: any, type: string, matcherName: string) {
 }
 
 export function sanitizeForFilePath(s: string) {
-  return s.replace(/[\x00-\x2F\x3A-\x40\x5B-\x60\x7B-\x7F]+/g, '-');
+  return s.replace(/[\x00-\x2C\x2E-\x2F\x3A-\x40\x5B-\x60\x7B-\x7F]+/g, '-');
 }
 
 export function addSuffixToFilePath(filePath: string, suffix: string, customExtension?: string, sanitize = false): string {
diff --git a/tests/playwright-test/test-output-dir.spec.ts b/tests/playwright-test/test-output-dir.spec.ts
index b47541da38..393f67773f 100644
--- a/tests/playwright-test/test-output-dir.spec.ts
+++ b/tests/playwright-test/test-output-dir.spec.ts
@@ -429,6 +429,19 @@ test('should allow nonAscii characters in the output dir', async ({ runInlineTes
   expect(outputDir).toBe(path.join(testInfo.outputDir, 'test-results', 'my-test-こんにちは世界'));
 });
 
+test('should not mangle double dashes', async ({ runInlineTest }, testInfo) => {
+  const result = await runInlineTest({
+    'my--file.spec.js': `
+      const { test } = pwt;
+      test('my--test', async ({}, testInfo) => {
+        console.log('\\n%%' + testInfo.outputDir);
+      });
+    `,
+  });
+  const outputDir = result.output.split('\n').filter(x => x.startsWith('%%'))[0].slice('%%'.length);
+  expect(outputDir).toBe(path.join(testInfo.outputDir, 'test-results', 'my--file-my--test'));
+});
+
 test('should allow include the describe name the output dir', async ({ runInlineTest }, testInfo) => {
   const result = await runInlineTest({
     'my-test.spec.js': `