diff --git a/changelogs/fragments/dnf5-from-rpm-allow_downgrade.yml b/changelogs/fragments/dnf5-from-rpm-allow_downgrade.yml
new file mode 100644
index 00000000000..97716d04693
--- /dev/null
+++ b/changelogs/fragments/dnf5-from-rpm-allow_downgrade.yml
@@ -0,0 +1,2 @@
+bugfixes:
+  - dnf5 - respect ``allow_downgrade`` when installing packages directly from rpm files
diff --git a/lib/ansible/modules/dnf5.py b/lib/ansible/modules/dnf5.py
index 823d3a7fb96..3f54816b996 100644
--- a/lib/ansible/modules/dnf5.py
+++ b/lib/ansible/modules/dnf5.py
@@ -357,9 +357,15 @@ def is_installed(base, spec):
 
 
 def is_newer_version_installed(base, spec):
+    # FIXME investigate whether this function can be replaced by dnf5's allow_downgrade option
+    if "/" in spec:
+        spec = spec.split("/")[-1]
+        if spec.endswith(".rpm"):
+            spec = spec[:-4]
+
     try:
         spec_nevra = next(iter(libdnf5.rpm.Nevra.parse(spec)))
-    except RuntimeError:
+    except (RuntimeError, StopIteration):
         return False
     spec_name = spec_nevra.get_name()
     v = spec_nevra.get_version()
diff --git a/test/integration/targets/dnf/tasks/repo.yml b/test/integration/targets/dnf/tasks/repo.yml
index 7f785b14e90..6aa268e2b29 100644
--- a/test/integration/targets/dnf/tasks/repo.yml
+++ b/test/integration/targets/dnf/tasks/repo.yml
@@ -101,6 +101,30 @@
         that:
             - "'results' in dnf_result"
     # ============================================================================
+    - name: Install dinginessentail-1.0-1 from a file (higher version is already installed)
+      dnf:
+        name: "{{ repodir }}/dinginessentail-1.0-1.{{ ansible_architecture }}.rpm"
+        state: present
+        disable_gpg_check: True
+      register: dnf_result
+
+    - name: Check dinginessentail with rpm
+      shell: rpm -q dinginessentail
+      register: rpm_result
+
+    - name: Verify installation
+      assert:
+        that:
+            - "not dnf_result.changed"
+            - "rpm_result.stdout.startswith('dinginessentail-1.1-1')"
+
+    - name: Verify dnf module outputs
+      assert:
+        that:
+            - "'msg' in dnf_result"
+            - "'rc' in dnf_result"
+            - "'results' in dnf_result"
+    # ============================================================================
     - name: Install dinginessentail-1.0-1 from a file (downgrade)
       dnf:
         name: "{{ repodir }}/dinginessentail-1.0-1.{{ ansible_architecture }}.rpm"