diff --git a/changelog/11104.bugfix.rst b/changelog/11104.bugfix.rst
new file mode 100644
index 00000000000..10f0db92515
--- /dev/null
+++ b/changelog/11104.bugfix.rst
@@ -0,0 +1,3 @@
+Fixed a regression in pytest 7.3.2 which caused to :confval:`testpaths` to be considered for loading initial conftests,
+even when it was not utilized (e.g. when explicit paths were given on the command line).
+Now the ``testpaths`` are only considered when they are in use.
diff --git a/src/_pytest/config/__init__.py b/src/_pytest/config/__init__.py
index 686be1277f3..c9a4b7f63cb 100644
--- a/src/_pytest/config/__init__.py
+++ b/src/_pytest/config/__init__.py
@@ -527,9 +527,12 @@ def pytest_configure(self, config: "Config") -> None:
     #
     def _set_initial_conftests(
         self,
-        namespace: argparse.Namespace,
+        args: Sequence[Union[str, Path]],
+        pyargs: bool,
+        noconftest: bool,
         rootpath: Path,
-        testpaths_ini: Sequence[str],
+        confcutdir: Optional[Path],
+        importmode: Union[ImportMode, str],
     ) -> None:
         """Load initial conftest files given a preparsed "namespace".
 
@@ -539,17 +542,12 @@ def _set_initial_conftests(
         common options will not confuse our logic here.
         """
         current = Path.cwd()
-        self._confcutdir = (
-            absolutepath(current / namespace.confcutdir)
-            if namespace.confcutdir
-            else None
-        )
-        self._noconftest = namespace.noconftest
-        self._using_pyargs = namespace.pyargs
-        testpaths = namespace.file_or_dir + testpaths_ini
+        self._confcutdir = absolutepath(current / confcutdir) if confcutdir else None
+        self._noconftest = noconftest
+        self._using_pyargs = pyargs
         foundanchor = False
-        for testpath in testpaths:
-            path = str(testpath)
+        for intitial_path in args:
+            path = str(intitial_path)
             # remove node-id syntax
             i = path.find("::")
             if i != -1:
@@ -563,10 +561,10 @@ def _set_initial_conftests(
             except OSError:  # pragma: no cover
                 anchor_exists = False
             if anchor_exists:
-                self._try_load_conftest(anchor, namespace.importmode, rootpath)
+                self._try_load_conftest(anchor, importmode, rootpath)
                 foundanchor = True
         if not foundanchor:
-            self._try_load_conftest(current, namespace.importmode, rootpath)
+            self._try_load_conftest(current, importmode, rootpath)
 
     def _is_in_confcutdir(self, path: Path) -> bool:
         """Whether a path is within the confcutdir.
@@ -1140,10 +1138,25 @@ def _processopt(self, opt: "Argument") -> None:
 
     @hookimpl(trylast=True)
     def pytest_load_initial_conftests(self, early_config: "Config") -> None:
+        # We haven't fully parsed the command line arguments yet, so
+        # early_config.args it not set yet. But we need it for
+        # discovering the initial conftests. So "pre-run" the logic here.
+        # It will be done for real in `parse()`.
+        args, args_source = early_config._decide_args(
+            args=early_config.known_args_namespace.file_or_dir,
+            pyargs=early_config.known_args_namespace.pyargs,
+            testpaths=early_config.getini("testpaths"),
+            invocation_dir=early_config.invocation_params.dir,
+            rootpath=early_config.rootpath,
+            warn=False,
+        )
         self.pluginmanager._set_initial_conftests(
-            early_config.known_args_namespace,
+            args=args,
+            pyargs=early_config.known_args_namespace.pyargs,
+            noconftest=early_config.known_args_namespace.noconftest,
             rootpath=early_config.rootpath,
-            testpaths_ini=self.getini("testpaths"),
+            confcutdir=early_config.known_args_namespace.confcutdir,
+            importmode=early_config.known_args_namespace.importmode,
         )
 
     def _initini(self, args: Sequence[str]) -> None:
diff --git a/testing/test_collection.py b/testing/test_collection.py
index bbcb358b6ff..3021398720f 100644
--- a/testing/test_collection.py
+++ b/testing/test_collection.py
@@ -1264,11 +1264,18 @@ def pytest_sessionstart(session):
         testpaths = some_path
         """
     )
+
+    # No command line args - falls back to testpaths.
     result = pytester.runpytest()
+    assert result.ret == ExitCode.INTERNAL_ERROR
     result.stdout.fnmatch_lines(
         "INTERNALERROR* Exception: pytest_sessionstart hook successfully run"
     )
 
+    # No fallback.
+    result = pytester.runpytest(".")
+    assert result.ret == ExitCode.NO_TESTS_COLLECTED
+
 
 def test_large_option_breaks_initial_conftests(pytester: Pytester) -> None:
     """Long option values do not break initial conftests handling (#10169)."""
diff --git a/testing/test_conftest.py b/testing/test_conftest.py
index c64bd11d4ed..f857cde04ba 100644
--- a/testing/test_conftest.py
+++ b/testing/test_conftest.py
@@ -1,4 +1,3 @@
-import argparse
 import os
 import textwrap
 from pathlib import Path
@@ -7,6 +6,8 @@
 from typing import Generator
 from typing import List
 from typing import Optional
+from typing import Sequence
+from typing import Union
 
 import pytest
 from _pytest.config import ExitCode
@@ -24,18 +25,18 @@ def ConftestWithSetinitial(path) -> PytestPluginManager:
 
 
 def conftest_setinitial(
-    conftest: PytestPluginManager, args, confcutdir: Optional["os.PathLike[str]"] = None
+    conftest: PytestPluginManager,
+    args: Sequence[Union[str, Path]],
+    confcutdir: Optional[Path] = None,
 ) -> None:
-    class Namespace:
-        def __init__(self) -> None:
-            self.file_or_dir = args
-            self.confcutdir = os.fspath(confcutdir) if confcutdir is not None else None
-            self.noconftest = False
-            self.pyargs = False
-            self.importmode = "prepend"
-
-    namespace = cast(argparse.Namespace, Namespace())
-    conftest._set_initial_conftests(namespace, rootpath=Path(args[0]), testpaths_ini=[])
+    conftest._set_initial_conftests(
+        args=args,
+        pyargs=False,
+        noconftest=False,
+        rootpath=Path(args[0]),
+        confcutdir=confcutdir,
+        importmode="prepend",
+    )
 
 
 @pytest.mark.usefixtures("_sys_snapshot")