diff --git a/src/testTree.ts b/src/testTree.ts
index c16ed4917..60969a398 100644
--- a/src/testTree.ts
+++ b/src/testTree.ts
@@ -81,6 +81,12 @@ export class TestTree extends DisposableBase {
       this._loadingItem.parent.children.delete(this._loadingItem.id);
     else if (this._testController.items.get(this._loadingItem.id))
       this._testController.items.delete(this._loadingItem.id);
+
+    // There might be scenarios where there are no test inside a Workspace folder. Clean them up after loading.
+    this._testController.items.forEach(item => {
+      if (item.children.size === 0)
+        this._testController.items.delete(item.id);
+    });
   }
 
   collectTestsInside(rootItem: vscodeTypes.TestItem): vscodeTypes.TestItem[] {
diff --git a/tests/list-tests.spec.ts b/tests/list-tests.spec.ts
index cb3e685b6..48998a2ac 100644
--- a/tests/list-tests.spec.ts
+++ b/tests/list-tests.spec.ts
@@ -759,6 +759,35 @@ test('should list tests in multi-folder workspace', async ({ activate }, testInf
   `);
 });
 
+test('should not keep empty workspace-folders in a workspace', async ({ activate }, testInfo) => {
+  const { testController } = await activate({}, {
+    workspaceFolders: [
+      [testInfo.outputPath('folder1'), {}],
+      [testInfo.outputPath('folder2'), {
+        'playwright.config.js': `module.exports = { testDir: './' }`,
+        'test.spec.ts': `
+          import { test } from '@playwright/test';
+          test('two', async () => {});
+        `,
+      }]
+    ]
+  });
+
+  // Make sure folder1 is not listed.
+  await expect(testController).toHaveTestTree(`
+    -   folder2
+      -   test.spec.ts
+  `);
+
+  await testController.expandTestItems(/test.spec.ts/);
+  // Make sure folder1 is not listed.
+  await expect(testController).toHaveTestTree(`
+    -   folder2
+      -   test.spec.ts
+        -   two [2:0]
+  `);
+});
+
 test('should merge items from different projects', async ({ activate }, testInfo) => {
   const { vscode, testController } = await activate({
     'playwright.config.ts': `module.exports = {