diff --git a/tools/releasetools/Android.bp b/tools/releasetools/Android.bp
index 25483f3..0661763 100644
--- a/tools/releasetools/Android.bp
+++ b/tools/releasetools/Android.bp
@@ -438,46 +438,6 @@
 }
 
 python_binary_host {
-    name: "merge_builds",
-    defaults: ["releasetools_binary_defaults"],
-    srcs: [
-        "merge_builds.py",
-    ],
-    libs: [
-        "releasetools_build_super_image",
-        "releasetools_common",
-    ],
-}
-
-python_binary_host {
-    name: "merge_target_files",
-    defaults: ["releasetools_binary_defaults"],
-    srcs: [
-        "merge_target_files.py",
-    ],
-    libs: [
-        "releasetools_add_img_to_target_files",
-        "releasetools_build_super_image",
-        "releasetools_check_target_files_vintf",
-        "releasetools_common",
-        "releasetools_find_shareduid_violation",
-        "releasetools_img_from_target_files",
-        "releasetools_ota_from_target_files",
-    ],
-    required: [
-        "checkvintf",
-        "host_init_verifier",
-        "secilc",
-    ],
-    target: {
-        darwin: {
-            // libs dep "releasetools_ota_from_target_files" is disabled on darwin
-            enabled: false,
-        },
-    },
-}
-
-python_binary_host {
     name: "ota_from_target_files",
     defaults: [
         "releasetools_binary_defaults",
@@ -595,11 +555,12 @@
         "check_partition_sizes.py",
         "check_target_files_signatures.py",
         "make_recovery_patch.py",
-        "merge_target_files.py",
         "ota_package_parser.py",
         "sign_apex.py",
         "sign_target_files_apks.py",
         "validate_target_files.py",
+        ":releasetools_merge_sources",
+        ":releasetools_merge_tests",
 
         "test_*.py",
     ],
diff --git a/tools/releasetools/OWNERS b/tools/releasetools/OWNERS
index 4ceb6ff..59235e0 100644
--- a/tools/releasetools/OWNERS
+++ b/tools/releasetools/OWNERS
@@ -1,6 +1,3 @@
 elsk@google.com
 nhdo@google.com
 zhangkelvin@google.com
-
-per-file *merge_*.py = danielnorman@google.com, jgalmes@google.com, rseymour@google.com
-
diff --git a/tools/releasetools/merge/Android.bp b/tools/releasetools/merge/Android.bp
new file mode 100644
index 0000000..c07d8ee
--- /dev/null
+++ b/tools/releasetools/merge/Android.bp
@@ -0,0 +1,69 @@
+// Copyright (C) 2022 The Android Open Source Project
+//
+// Licensed under the Apache License, Version 2.0 (the "License");
+// you may not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//      http://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS,
+// WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+// See the License for the specific language governing permissions and
+// limitations under the License.
+
+package {
+    default_applicable_licenses: ["Android-Apache-2.0"],
+}
+
+filegroup {
+    name: "releasetools_merge_sources",
+    srcs: [
+        "merge_target_files.py",
+    ],
+}
+
+filegroup {
+    name: "releasetools_merge_tests",
+    srcs: [
+        "test_merge_target_files.py",
+    ],
+}
+
+python_binary_host {
+    name: "merge_target_files",
+    defaults: ["releasetools_binary_defaults"],
+    srcs: [":releasetools_merge_sources"],
+    libs: [
+        "releasetools_add_img_to_target_files",
+        "releasetools_build_super_image",
+        "releasetools_check_target_files_vintf",
+        "releasetools_common",
+        "releasetools_find_shareduid_violation",
+        "releasetools_img_from_target_files",
+        "releasetools_ota_from_target_files",
+    ],
+    required: [
+        "checkvintf",
+        "host_init_verifier",
+        "secilc",
+    ],
+    target: {
+        darwin: {
+            // libs dep "releasetools_ota_from_target_files" is disabled on darwin
+            enabled: false,
+        },
+    },
+}
+
+python_binary_host {
+    name: "merge_builds",
+    defaults: ["releasetools_binary_defaults"],
+    srcs: [
+        "merge_builds.py",
+    ],
+    libs: [
+        "releasetools_build_super_image",
+        "releasetools_common",
+    ],
+}
diff --git a/tools/releasetools/merge/OWNERS b/tools/releasetools/merge/OWNERS
new file mode 100644
index 0000000..9012e3a
--- /dev/null
+++ b/tools/releasetools/merge/OWNERS
@@ -0,0 +1,3 @@
+danielnorman@google.com
+jgalmes@google.com
+rseymour@google.com
diff --git a/tools/releasetools/merge_builds.py b/tools/releasetools/merge/merge_builds.py
similarity index 100%
rename from tools/releasetools/merge_builds.py
rename to tools/releasetools/merge/merge_builds.py
diff --git a/tools/releasetools/merge_target_files.py b/tools/releasetools/merge/merge_target_files.py
similarity index 100%
rename from tools/releasetools/merge_target_files.py
rename to tools/releasetools/merge/merge_target_files.py
diff --git a/tools/releasetools/test_merge_target_files.py b/tools/releasetools/merge/test_merge_target_files.py
similarity index 100%
rename from tools/releasetools/test_merge_target_files.py
rename to tools/releasetools/merge/test_merge_target_files.py
diff --git a/tools/releasetools/test_utils.py b/tools/releasetools/test_utils.py
index 808b392..e30d2b9 100755
--- a/tools/releasetools/test_utils.py
+++ b/tools/releasetools/test_utils.py
@@ -33,6 +33,8 @@
 # Some test runner doesn't like outputs from stderr.
 logging.basicConfig(stream=sys.stdout)
 
+ALLOWED_TEST_SUBDIRS = ('merge',)
+
 # Use ANDROID_BUILD_TOP as an indicator to tell if the needed tools (e.g.
 # avbtool, mke2fs) are available while running the tests, unless
 # FORCE_RUN_RELEASETOOLS is set to '1'. Not having the required vars means we
@@ -244,9 +246,12 @@
   # os walk and load them manually.
   test_modules = []
   base_path = os.path.dirname(os.path.realpath(__file__))
+  test_dirs = [base_path] + [
+      os.path.join(base_path, subdir) for subdir in ALLOWED_TEST_SUBDIRS
+  ]
   for dirpath, _, files in os.walk(base_path):
     for fn in files:
-      if dirpath == base_path and re.match('test_.*\\.py$', fn):
+      if dirpath in test_dirs and re.match('test_.*\\.py$', fn):
         test_modules.append(fn[:-3])
 
   test_suite = unittest.TestLoader().loadTestsFromNames(test_modules)