diff --git a/lib/tests/setuplib_test.php b/lib/tests/setuplib_test.php
index a17971deabc..f1f999d5c38 100644
--- a/lib/tests/setuplib_test.php
+++ b/lib/tests/setuplib_test.php
@@ -155,6 +155,9 @@ class core_setuplib_testcase extends advanced_testcase {
         $this->setCurrentTimeStart();
         $timestampfile = "$CFG->localcachedir/.lastpurged";
 
+        // Delete existing localcache directory, as this is testing first call
+        // to make_localcache_directory.
+        remove_dir($CFG->localcachedir, true);
         $dir = make_localcache_directory('', false);
         $this->assertSame($CFG->localcachedir, $dir);
         $this->assertFileNotExists("$CFG->localcachedir/.htaccess");