diff --git a/tests/tests.cmake b/tests/tests.cmake
index eff63d86..e60d1a2d 100644
--- a/tests/tests.cmake
+++ b/tests/tests.cmake
@@ -87,14 +87,12 @@ if(BUILD_TESTING)
 
         target_link_libraries("${TEST}" PRIVATE liblzma tests_w32res)
 
-        # Put the test programs into their own subdirectory so they don't
-        # pollute the top-level dir which might contain xz and xzdec.
-        set_target_properties("${TEST}" PROPERTIES
-            RUNTIME_OUTPUT_DIRECTORY "${CMAKE_CURRENT_BINARY_DIR}/tests_bin"
-        )
-
+        # We used to put the test executables into their own subdirectory,
+        # but it can create problems on Windows when BUILD_SHARED_LIBS=ON.
+        # The executables and liblzma.dll should be in the same directory to
+        # ensure that the correct liblzma.dll file is always found and used.
         add_test(NAME "${TEST}"
-                 COMMAND "${CMAKE_CURRENT_BINARY_DIR}/tests_bin/${TEST}"
+                 COMMAND "${CMAKE_CURRENT_BINARY_DIR}/${TEST}"
         )
 
         # Set srcdir environment variable so that the tests find their