diff --git a/changelog/1118.bugfix b/changelog/1118.bugfix
new file mode 100644
index 00000000..1d984b68
--- /dev/null
+++ b/changelog/1118.bugfix
@@ -0,0 +1 @@
+Loadgroup: Always apply the node ID transformation, even if test collection is run on the controller node.
diff --git a/src/xdist/remote.py b/src/xdist/remote.py
index dd1f9883..6f244f46 100644
--- a/src/xdist/remote.py
+++ b/src/xdist/remote.py
@@ -207,7 +207,7 @@ def pytest_collection_modifyitems(
         items: list[pytest.Item],
     ) -> None:
         # add the group name to nodeid as suffix if --dist=loadgroup
-        if config.getvalue("loadgroup"):
+        if config.getoption("dist") == "loadgroup":
             for item in items:
                 mark = item.get_closest_marker("xdist_group")
                 if not mark:
@@ -356,7 +356,6 @@ def getinfodict() -> WorkerInfo:
 
 
 def setup_config(config: pytest.Config, basetemp: str | None) -> None:
-    config.option.loadgroup = config.getvalue("dist") == "loadgroup"
     config.option.looponfail = False
     config.option.usepdb = False
     config.option.dist = "no"