diff --git a/airflow-core/tests/unit/api_fastapi/auth/managers/simple/conftest.py b/airflow-core/tests/unit/api_fastapi/auth/managers/simple/conftest.py
index 92cc89f581f5b..122e8a35cbea1 100644
--- a/airflow-core/tests/unit/api_fastapi/auth/managers/simple/conftest.py
+++ b/airflow-core/tests/unit/api_fastapi/auth/managers/simple/conftest.py
@@ -31,6 +31,22 @@
 from tests_common.test_utils.config import conf_vars
 
 
+@pytest.fixture(autouse=True)
+def isolated_password_file(tmp_path):
+    """
+    Point the SimpleAuthManager generated-password file at a per-test path.
+
+    By default the file lives under ``AIRFLOW_HOME``, a single path shared by every
+    test process. Fixtures and tests here create, overwrite, and delete it, so under
+    parallel (xdist) runs one process can delete the file another is mid-read on,
+    raising ``FileNotFoundError``. Giving each test its own ``tmp_path`` file removes
+    that cross-process race.
+    """
+    password_file = tmp_path / "simple_auth_manager_passwords.json.generated"
+    with conf_vars({("core", "simple_auth_manager_passwords_file"): str(password_file)}):
+        yield
+
+
 @pytest.fixture
 def auth_manager():
     auth_manager = SimpleAuthManager()