diff --git a/src/cargo/core/compiler/build_runner/mod.rs b/src/cargo/core/compiler/build_runner/mod.rs
index 16476693784..ec8d6bd1ebc 100644
--- a/src/cargo/core/compiler/build_runner/mod.rs
+++ b/src/cargo/core/compiler/build_runner/mod.rs
@@ -262,7 +262,7 @@ impl<'a, 'gctx> BuildRunner<'a, 'gctx> {
                         }
 
                         for (lt, arg) in &output.linker_args {
-                            if lt.applies_to(&unit.target) {
+                            if lt.applies_to(&unit.target, unit.mode) {
                                 args.push("-C".into());
                                 args.push(format!("link-arg={}", arg).into());
                             }
diff --git a/src/cargo/core/compiler/custom_build.rs b/src/cargo/core/compiler/custom_build.rs
index 8928c93be10..5483eabc84f 100644
--- a/src/cargo/core/compiler/custom_build.rs
+++ b/src/cargo/core/compiler/custom_build.rs
@@ -37,6 +37,7 @@ use crate::core::compiler::build_runner::UnitHash;
 use crate::core::compiler::fingerprint::DirtyReason;
 use crate::core::compiler::job_queue::JobState;
 use crate::core::{profiles::ProfileRoot, PackageId, Target};
+use crate::util::command_prelude::CompileMode;
 use crate::util::errors::CargoResult;
 use crate::util::internal;
 use crate::util::machine_message::{self, Message};
@@ -196,10 +197,11 @@ pub enum LinkArgTarget {
 
 impl LinkArgTarget {
     /// Checks if this link type applies to a given [`Target`].
-    pub fn applies_to(&self, target: &Target) -> bool {
+    pub fn applies_to(&self, target: &Target, mode: CompileMode) -> bool {
+        let is_test = mode.is_any_test();
         match self {
             LinkArgTarget::All => true,
-            LinkArgTarget::Cdylib => target.is_cdylib(),
+            LinkArgTarget::Cdylib => !is_test && target.is_cdylib(),
             LinkArgTarget::Bin => target.is_bin(),
             LinkArgTarget::SingleBin(name) => target.is_bin() && target.name() == name,
             LinkArgTarget::Test => target.is_test(),
diff --git a/src/cargo/core/compiler/mod.rs b/src/cargo/core/compiler/mod.rs
index a0a42e84532..3ec3b74ba93 100644
--- a/src/cargo/core/compiler/mod.rs
+++ b/src/cargo/core/compiler/mod.rs
@@ -360,6 +360,7 @@ fn rustc(
                     pass_l_flag,
                     &target,
                     current_id,
+                    mode,
                 )?;
                 add_plugin_deps(&mut rustc, &script_outputs, &build_scripts, &root_output)?;
             }
@@ -494,6 +495,7 @@ fn rustc(
         pass_l_flag: bool,
         target: &Target,
         current_id: PackageId,
+        mode: CompileMode,
     ) -> CargoResult<()> {
         for key in build_scripts.to_link.iter() {
             let output = build_script_outputs.get(key.1).ok_or_else(|| {
@@ -520,7 +522,9 @@ fn rustc(
                 // clause should have been kept in the `if` block above. For
                 // now, continue allowing it for cdylib only.
                 // See https://github.com/rust-lang/cargo/issues/9562
-                if lt.applies_to(target) && (key.0 == current_id || *lt == LinkArgTarget::Cdylib) {
+                if lt.applies_to(target, mode)
+                    && (key.0 == current_id || *lt == LinkArgTarget::Cdylib)
+                {
                     rustc.arg("-C").arg(format!("link-arg={}", arg));
                 }
             }
diff --git a/tests/testsuite/build_script_extra_link_arg.rs b/tests/testsuite/build_script_extra_link_arg.rs
index ee58e309fe9..fc1e03f987e 100644
--- a/tests/testsuite/build_script_extra_link_arg.rs
+++ b/tests/testsuite/build_script_extra_link_arg.rs
@@ -443,3 +443,40 @@ fn cdylib_both_forms() {
 "#]])
         .run();
 }
+
+// https://github.com/rust-lang/cargo/issues/12663
+#[cargo_test]
+fn cdylib_extra_link_args_should_not_apply_to_unit_tests() {
+    let p = project()
+        .file(
+            "Cargo.toml",
+            r#"
+                [package]
+                name = "foo"
+                version = "0.5.0"
+                edition = "2015"
+
+                [lib]
+                crate-type = ["lib", "cdylib"]
+            "#,
+        )
+        .file(
+            "src/lib.rs",
+            r#"
+                #[test]
+                fn noop() {}
+            "#,
+        )
+        .file(
+            "build.rs",
+            r#"
+                fn main() {
+                    // This would fail if cargo passed `-lhack` to building the test because `hack` doesn't exist.
+                    println!("cargo::rustc-link-arg-cdylib=-lhack");
+                }
+            "#,
+        )
+        .build();
+
+    p.cargo("test --lib").run();
+}