diff --git a/History.md b/History.md
index 59a86bcf22..09664f6c17 100644
--- a/History.md
+++ b/History.md
@@ -1,5 +1,12 @@
 ## v.NEXT
 
+## v1.7.0.3, 2018-06-13
+
+* Fixed [Issue #9991](https://github.com/meteor/meteor/issues/9991),
+  introduced in
+  [Meteor 1.7.0.2](https://github.com/meteor/meteor/pull/9990)
+  by [PR #9977](https://github.com/meteor/meteor/pull/9977).
+
 ## v1.7.0.2, 2018-06-13
 
 * Node has been updated to version
diff --git a/packages/meteor-tool/package.js b/packages/meteor-tool/package.js
index 0c3f6c7a78..5cce8e2483 100644
--- a/packages/meteor-tool/package.js
+++ b/packages/meteor-tool/package.js
@@ -1,6 +1,6 @@
 Package.describe({
   summary: "The Meteor command-line tool",
-  version: '1.7.0_2'
+  version: '1.7.0_3'
 });
 
 Package.includeTool();
diff --git a/scripts/admin/meteor-release-experimental.json b/scripts/admin/meteor-release-experimental.json
index da3dc5e1ee..873da558e9 100644
--- a/scripts/admin/meteor-release-experimental.json
+++ b/scripts/admin/meteor-release-experimental.json
@@ -1,6 +1,6 @@
 {
   "track": "METEOR",
-  "version": "1.7.0.2-rc.0",
+  "version": "1.7.0.3-rc.0",
   "recommended": false,
   "official": false,
   "description": "Meteor"
diff --git a/scripts/admin/meteor-release-official.json b/scripts/admin/meteor-release-official.json
index 35eb8d9854..2716086cd7 100644
--- a/scripts/admin/meteor-release-official.json
+++ b/scripts/admin/meteor-release-official.json
@@ -1,11 +1,12 @@
 {
   "track": "METEOR",
-  "version": "1.7.0.2",
+  "version": "1.7.0.3",
   "recommended": false,
   "official": true,
   "patchFrom": [
     "1.7",
-    "1.7.0.1"
+    "1.7.0.1",
+    "1.7.0.2"
   ],
   "description": "The Official Meteor Distribution"
 }
diff --git a/tools/isobuild/package-source.js b/tools/isobuild/package-source.js
index 18a39c3322..4912e71993 100644
--- a/tools/isobuild/package-source.js
+++ b/tools/isobuild/package-source.js
@@ -889,6 +889,7 @@ _.extend(PackageSource.prototype, {
             sourceArch: this,
             ignoreFiles,
             isApp: true,
+            testModule,
           };
 
           // If this architecture has a mainModule defined in
@@ -1025,8 +1026,9 @@ _.extend(PackageSource.prototype, {
         return fileOptions;
       }
 
-      // Files in `imports/` should be lazily loaded *apart* from tests
-      if (dir === "imports" && ! isTestFile) {
+      // Files in `imports/` and `tests/` directories should be lazily
+      // loaded *apart* from tests.
+      if ((dir === "imports" || dir === "tests") && ! isTestFile) {
         fileOptions.lazy = true;
       }
 
@@ -1080,6 +1082,7 @@ _.extend(PackageSource.prototype, {
     watchSet,
     isApp,
     sourceArch,
+    testModule,
     loopChecker = new SymlinkLoopChecker(this.sourceRoot),
     ignoreFiles = []
   }) {
@@ -1102,10 +1105,10 @@ _.extend(PackageSource.prototype, {
     // Unless we're running tests, ignore all test filenames and if we are, ignore the
     // type of file we *aren't* running
     if (!global.testCommandMetadata || global.testCommandMetadata.isTest) {
-      Array.prototype.push.apply(sourceReadOptions.exclude, APP_TEST_FILENAME_REGEXPS);
+      sourceReadOptions.exclude.push(...APP_TEST_FILENAME_REGEXPS);
     }
     if (!global.testCommandMetadata || global.testCommandMetadata.isAppTest) {
-      Array.prototype.push.apply(sourceReadOptions.exclude, TEST_FILENAME_REGEXPS);
+      sourceReadOptions.exclude.push(...TEST_FILENAME_REGEXPS);
     }
 
     // Read top-level source files, excluding control files that were not
@@ -1116,13 +1119,21 @@ _.extend(PackageSource.prototype, {
       controlFiles.push('package.js');
     }
 
-    const anyLevelExcludes = [
-      /^tests\/$/,
+    const anyLevelExcludes = [];
+
+    // If we have a meteor.testModule from package.json, then we don't
+    // need to exclude tests/ directories from the search, because we
+    // trust meteor.testModule to identify a single test entry point.
+    if (! testModule) {
+      anyLevelExcludes.push(/^tests\/$/);
+    }
+
+    anyLevelExcludes.push(
       archinfo.matches(arch, "os")
         ? /^client\/$/
         : /^server\/$/,
       ...sourceReadOptions.exclude,
-    ];
+    );
 
     const topLevelExcludes = isApp ? [
       ...anyLevelExcludes,