diff --git a/test_runner/fixtures/neon_fixtures.py b/test_runner/fixtures/neon_fixtures.py
index 390b94c2ead3b..220159e1dc4cb 100644
--- a/test_runner/fixtures/neon_fixtures.py
+++ b/test_runner/fixtures/neon_fixtures.py
@@ -490,7 +490,6 @@ def __init__(
         self.env: Optional[NeonEnv] = None
         self.keep_remote_storage_contents: bool = True
         self.neon_binpath = neon_binpath
-        self.neon_local_binpath = neon_binpath
         self.pg_distrib_dir = pg_distrib_dir
         self.pg_version = pg_version
         self.preserve_database_files = preserve_database_files
@@ -638,11 +637,17 @@ def _build_and_use_snapshot_impl(
     def from_repo_dir(
         self,
         repo_dir: Path,
+        neon_binpath: Optional[Path] = None,
+        pg_distrib_dir: Optional[Path] = None,
     ) -> NeonEnv:
         """
         A simple method to import data into the current NeonEnvBuilder from a snapshot of a repo dir.
         """
 
+        # Setting custom `neon_binpath` and `pg_distrib_dir` is useful for compatibility tests
+        self.neon_binpath = neon_binpath or self.neon_binpath
+        self.pg_distrib_dir = pg_distrib_dir or self.pg_distrib_dir
+
         # Get the initial tenant and timeline from the snapshot config
         snapshot_config_toml = repo_dir / "config"
         with snapshot_config_toml.open("r") as f:
@@ -1017,10 +1022,9 @@ def __init__(self, config: NeonEnvBuilder):
         self.pg_version = config.pg_version
         # Binary path for pageserver, safekeeper, etc
         self.neon_binpath = config.neon_binpath
-        # Binary path for neon_local test-specific binaries
-        self.neon_local_binpath = config.neon_local_binpath
-        if self.neon_local_binpath is None:
-            self.neon_local_binpath = self.neon_binpath
+        # Binary path for neon_local test-specific binaries: may be overridden
+        # after construction for compat testing
+        self.neon_local_binpath = config.neon_binpath
         self.pg_distrib_dir = config.pg_distrib_dir
         self.endpoint_counter = 0
         self.storage_controller_config = config.storage_controller_config
diff --git a/test_runner/regress/test_compatibility.py b/test_runner/regress/test_compatibility.py
index 787c114fc1f7d..e1ccb3e0c6408 100644
--- a/test_runner/regress/test_compatibility.py
+++ b/test_runner/regress/test_compatibility.py
@@ -233,18 +233,17 @@ def test_forward_compatibility(
         neon_env_builder.pageserver_validate_vectored_get = None
 
         neon_env_builder.num_safekeepers = 3
-
-        # Use previous version's production binaries (pageserver, safekeeper, pg_distrib_dir, etc.).
-        # But always use the current version's neon_local binary.
-        # This is because we want to test the compatibility of the data format, not the compatibility of the neon_local CLI.
-        neon_env_builder.neon_binpath = compatibility_neon_bin
-        neon_env_builder.pg_distrib_dir = compatibility_postgres_distrib_dir
-        neon_env_builder.neon_local_binpath = neon_env_builder.neon_local_binpath
-
+        neon_local_binpath = neon_env_builder.neon_binpath
         env = neon_env_builder.from_repo_dir(
             compatibility_snapshot_dir / "repo",
+            neon_binpath=compatibility_neon_bin,
+            pg_distrib_dir=compatibility_postgres_distrib_dir,
         )
 
+        # Use current neon_local even though we're using old binaries for
+        # everything else: our test code is written for latest CLI args.
+        env.neon_local_binpath = neon_local_binpath
+
         neon_env_builder.start()
 
         check_neon_works(