diff --git a/tools/testing/selftests/Makefile b/tools/testing/selftests/Makefile
index b43c5f41fb3e..f2ebf8cf4686 100644
--- a/tools/testing/selftests/Makefile
+++ b/tools/testing/selftests/Makefile
@@ -99,6 +99,15 @@ ARCH           ?= $(SUBARCH)
 export KSFT_KHDR_INSTALL_DONE := 1
 export BUILD
 
+# build and run gpio when output directory is the src dir.
+# gpio has dependency on tools/gpio and builds tools/gpio
+# objects in the src directory in all cases making the src
+# repo dirty even when objects are relocated.
+ifneq (1,$(DEFAULT_INSTALL_HDR_PATH))
+	TMP := $(filter-out gpio, $(TARGETS))
+	TARGETS := $(TMP)
+endif
+
 # set default goal to all, so make without a target runs all, even when
 # all isn't the first target in the file.
 .DEFAULT_GOAL := all