diff --git a/changelog/12328.bugfix.rst b/changelog/12328.bugfix.rst
new file mode 100644
index 000000000..f33442585
--- /dev/null
+++ b/changelog/12328.bugfix.rst
@@ -0,0 +1 @@
+Fix a regression in pytest 8.0.0 where package-scoped parameterized items were not correctly reordered to minimize setups/teardowns in some cases.
diff --git a/src/_pytest/fixtures.py b/src/_pytest/fixtures.py
index 3ce8b3fb4..06da52aed 100644
--- a/src/_pytest/fixtures.py
+++ b/src/_pytest/fixtures.py
@@ -187,7 +187,8 @@ def get_parametrized_fixture_keys(
         if scope is Scope.Session:
             scoped_item_path = None
         elif scope is Scope.Package:
-            scoped_item_path = item.path
+            # Package key = module's directory.
+            scoped_item_path = item.path.parent
         elif scope is Scope.Module:
             scoped_item_path = item.path
         elif scope is Scope.Class:
diff --git a/testing/python/fixtures.py b/testing/python/fixtures.py
index 15d7c33b2..d54bcc4d4 100644
--- a/testing/python/fixtures.py
+++ b/testing/python/fixtures.py
@@ -4274,6 +4274,39 @@ class TestScopeOrdering:
         request = TopRequest(items[0], _ispytest=True)
         assert request.fixturenames == "s1 p1 m1 m2 c1 f2 f1".split()
 
+    def test_parametrized_package_scope_reordering(self, pytester: Pytester) -> None:
+        """A paramaterized package-scoped fixture correctly reorders items to
+        minimize setups & teardowns.
+
+        Regression test for #12328.
+        """
+        pytester.makepyfile(
+            __init__="",
+            conftest="""
+                import pytest
+                @pytest.fixture(scope="package", params=["a", "b"])
+                def fix(request):
+                    return request.param
+            """,
+            test_1="def test1(fix): pass",
+            test_2="def test2(fix): pass",
+        )
+
+        result = pytester.runpytest("--setup-plan")
+        assert result.ret == ExitCode.OK
+        result.stdout.fnmatch_lines(
+            [
+                "  SETUP    P fix['a']",
+                "        test_1.py::test1[a] (fixtures used: fix, request)",
+                "        test_2.py::test2[a] (fixtures used: fix, request)",
+                "  TEARDOWN P fix['a']",
+                "  SETUP    P fix['b']",
+                "        test_1.py::test1[b] (fixtures used: fix, request)",
+                "        test_2.py::test2[b] (fixtures used: fix, request)",
+                "  TEARDOWN P fix['b']",
+            ],
+        )
+
     def test_multiple_packages(self, pytester: Pytester) -> None:
         """Complex test involving multiple package fixtures. Make sure teardowns
         are executed in order.