diff --git a/internal/command/arguments/test.go b/internal/command/arguments/test.go
index bd5d3ec213..3a11394489 100644
--- a/internal/command/arguments/test.go
+++ b/internal/command/arguments/test.go
@@ -78,7 +78,10 @@ func ParseTest(args []string) (*Test, tfdiags.Diagnostics) {
 			"The -junit-xml option is currently not compatible with remote test execution via the -cloud-run flag. If you are interested in JUnit XML output for remotely-executed tests please open an issue in GitHub."))
 	}
 
-	if test.OperationParallelism < 1 {
+	// Only set the default parallelism if this is not a cloud-run test.
+	// A cloud-run test will eventually run its own local test, and if the
+	// user still hasn't set the parallelism, that run will use the default.
+	if test.OperationParallelism < 1 && len(test.CloudRunSource) == 0 {
 		test.OperationParallelism = DefaultParallelism
 	}
 
diff --git a/internal/command/arguments/test_test.go b/internal/command/arguments/test_test.go
index 018c961721..8d62bcb0e4 100644
--- a/internal/command/arguments/test_test.go
+++ b/internal/command/arguments/test_test.go
@@ -146,6 +146,18 @@ func TestParseTest(t *testing.T) {
 			},
 			wantDiags: nil,
 		},
+		"cloud-with-parallelism-0": {
+			args: []string{"-parallelism=0", "-cloud-run=foobar"},
+			want: &Test{
+				CloudRunSource:       "foobar",
+				Filter:               nil,
+				TestDirectory:        "tests",
+				ViewType:             ViewHuman,
+				Vars:                 &Vars{},
+				OperationParallelism: 0,
+			},
+			wantDiags: nil,
+		},
 		"unknown flag": {
 			args: []string{"-boop"},
 			want: &Test{