diff --git a/packages/playwright-test/src/workerRunner.ts b/packages/playwright-test/src/workerRunner.ts
index 70841081f0..b227324536 100644
--- a/packages/playwright-test/src/workerRunner.ts
+++ b/packages/playwright-test/src/workerRunner.ts
@@ -393,8 +393,11 @@ export class WorkerRunner extends EventEmitter {
 
       // Run "afterAll" hooks for suites that are not shared with the next test.
       const nextSuites = new Set(getSuites(nextTest));
+      // In case of failure the worker will be stopped and we have to make sure that afterAll
+      // hooks run before test fixtures teardown.
+      const isFailure = testInfo.status !== 'skipped' && testInfo.status !== testInfo.expectedStatus;
       for (const suite of reversedSuites) {
-        if (!nextSuites.has(suite)) {
+        if (!nextSuites.has(suite) || isFailure) {
           const afterAllError = await this._runAfterAllHooksForSuite(suite, testInfo);
           firstAfterHooksError = firstAfterHooksError || afterAllError;
         }
diff --git a/tests/playwright-test/playwright.trace.spec.ts b/tests/playwright-test/playwright.trace.spec.ts
index 5ccf498254..adcc69deb3 100644
--- a/tests/playwright-test/playwright.trace.spec.ts
+++ b/tests/playwright-test/playwright.trace.spec.ts
@@ -211,6 +211,37 @@ test('should work in serial mode', async ({ runInlineTest }, testInfo) => {
   expect(fs.existsSync(testInfo.outputPath('test-results', 'a-serial-fails', 'trace.zip'))).toBeTruthy();
 });
 
+test('should not override trace file in afterAll', async ({ runInlineTest, server }, testInfo) => {
+  const result = await runInlineTest({
+    'playwright.config.ts': `
+      module.exports = { use: { trace: 'retain-on-failure' } };
+    `,
+    'a.spec.ts': `
+      const { test } = pwt;
+
+      test('test 1', async ({ page }) => {
+        await page.goto('about:blank');
+        throw 'oh no!';
+      });
+
+      // Another test in the same file to affect after hooks order.
+      test('test 2', async ({}) => {
+      });
+
+      test.afterAll(async ({ request }) => {
+        await request.get('${server.EMPTY_PAGE}');
+      });
+    `,
+  }, { workers: 1 });
+
+  expect(result.exitCode).toBe(1);
+  expect(result.passed).toBe(1);
+  expect(result.failed).toBe(1);
+  expect(fs.existsSync(testInfo.outputPath('test-results', 'a-test-1', 'trace.zip'))).toBeTruthy();
+  expect(fs.existsSync(testInfo.outputPath('test-results', 'a-test-1', 'trace-1.zip'))).toBeTruthy();
+});
+
+
 async function parseTrace(file: string): Promise<Map<string, Buffer>> {
   const zipFS = new ZipFileSystem(file);
   const resources = new Map<string, Buffer>();