diff --git a/.github/workflows/ci-testing.yml b/.github/workflows/ci-testing.yml
index 005cb54d4..6e1ff50a6 100644
--- a/.github/workflows/ci-testing.yml
+++ b/.github/workflows/ci-testing.yml
@@ -45,9 +45,16 @@ jobs:
           uv pip install -e ".[extras]" -r requirements/test.txt -U -q
           uv pip list
 
-      - name: Tests
-        working-directory: tests
-        run: pytest . -v --cov=litdata --durations=100
+      - name: Run fast tests in parallel
+        run: |
+          pytest \
+            tests/streaming tests/utilities \
+            tests/test_cli.py tests/test_debugger.py \
+            -n 2 --cov=litdata --cov-append --cov-report= --durations=120
+
+      - name: Run processing tests sequentially
+        run: |
+          pytest tests/processing tests/raw --cov=litdata --cov-append --cov-report= --durations=90
 
       - name: Statistics
         continue-on-error: true
diff --git a/requirements/test.txt b/requirements/test.txt
index 505fe9d5c..32a6fc893 100644
--- a/requirements/test.txt
+++ b/requirements/test.txt
@@ -9,6 +9,7 @@ pytest-cov ==6.2.1
 pytest-timeout ==2.4.0
 pytest-rerunfailures ==15.1
 pytest-random-order ==1.1.1
+pytest-xdist >=3.8.0
 pandas
 pyarrow >=20.0.0
 polars >1.0.0
diff --git a/tests/conftest.py b/tests/conftest.py
index a2e54aadb..e4eb8d3ce 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -1,5 +1,6 @@
 import os
 import shutil
+import signal
 import sys
 import threading
 from collections import OrderedDict
@@ -16,7 +17,7 @@
 from litdata.utilities.dataset_utilities import get_default_cache_dir
 
 
-@pytest.fixture(autouse=True)
+@pytest.fixture(autouse=True, scope="session")
 def teardown_process_group():
     """Ensures distributed process group gets closed before the next test runs."""
     yield
@@ -25,9 +26,8 @@ def teardown_process_group():
 
 
 @pytest.fixture(autouse=True)
-def set_env():
-    # Set environment variable before each test to configure BaseWorker's maximum wait time
-    os.environ["DATA_OPTIMIZER_TIMEOUT"] = "20"
+def disable_signals(monkeypatch):
+    monkeypatch.setattr(signal, "signal", lambda *args, **kwargs: None)
 
 
 @pytest.fixture
@@ -132,7 +132,7 @@ def lightning_sdk_mock(monkeypatch):
     return lightning_sdk
 
 
-@pytest.fixture(autouse=True)
+@pytest.fixture(autouse=True, scope="session")
 def _thread_police():
     """Attempts stopping left-over threads to avoid test interactions.
 
diff --git a/tests/streaming/test_dataloader.py b/tests/streaming/test_dataloader.py
index 68e8cbdc2..ddb517e4d 100644
--- a/tests/streaming/test_dataloader.py
+++ b/tests/streaming/test_dataloader.py
@@ -319,7 +319,7 @@ def test_dataloader_states_with_persistent_workers(tmpdir):
     assert count >= 25, "There should be at least 25 batches in the third epoch"
 
 
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 def test_resume_dataloader_with_new_dataset(tmpdir):
     dataset_1_path = tmpdir.join("dataset_1")
     dataset_2_path = tmpdir.join("dataset_2")
diff --git a/tests/streaming/test_dataset.py b/tests/streaming/test_dataset.py
index c3c3ff806..4332bec79 100644
--- a/tests/streaming/test_dataset.py
+++ b/tests/streaming/test_dataset.py
@@ -311,7 +311,7 @@ def test_streaming_dataset_distributed_no_shuffle(drop_last, tmpdir, compression
         pytest.param("zstd", marks=pytest.mark.skipif(condition=not _ZSTD_AVAILABLE, reason="Requires: ['zstd']")),
     ],
 )
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 def test_streaming_dataset_distributed_full_shuffle_odd(drop_last, tmpdir, compression):
     seed_everything(42)
 
@@ -364,7 +364,7 @@ def test_streaming_dataset_distributed_full_shuffle_odd(drop_last, tmpdir, compr
         ),
     ],
 )
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 def test_streaming_dataset_distributed_full_shuffle_even(drop_last, tmpdir, compression):
     seed_everything(42)
 
@@ -412,7 +412,7 @@ def test_streaming_dataset_distributed_full_shuffle_even(drop_last, tmpdir, comp
         pytest.param("zstd", marks=pytest.mark.skipif(condition=not _ZSTD_AVAILABLE, reason="Requires: ['zstd']")),
     ],
 )
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 def test_streaming_dataset_distributed_full_shuffle_even_multi_nodes(drop_last, tmpdir, compression):
     seed_everything(42)
 
@@ -685,7 +685,7 @@ def test_dataset_for_text_tokens_multiple_workers(tmpdir):
     assert result == expected
 
 
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 def test_dataset_for_text_tokens_with_large_block_size_multiple_workers(tmpdir):
     # test to reproduce ERROR: Unexpected segmentation fault encountered in worker
     seed_everything(42)
@@ -1077,7 +1077,7 @@ def test_dataset_resume_on_future_chunks(shuffle, tmpdir, monkeypatch):
     assert torch.equal(next(iter(train_dataloader)), batch_to_resume_from)
 
 
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 @pytest.mark.skipif(sys.platform == "win32", reason="Not tested on windows and MacOs")
 def test_dataset_valid_state(tmpdir, monkeypatch):
     seed_everything(42)
@@ -1213,7 +1213,7 @@ def fn(remote_chunkpath: str, local_chunkpath: str):
         dataset._validate_state_dict()
 
 
-@pytest.mark.timeout(60)
+@pytest.mark.timeout(90)
 @pytest.mark.skipif(sys.platform == "win32", reason="Not tested on windows and MacOs")
 def test_dataset_valid_state_override(tmpdir, monkeypatch):
     seed_everything(42)
diff --git a/tests/utilities/test_env.py b/tests/utilities/test_env.py
index 064d93804..352bf15c3 100644
--- a/tests/utilities/test_env.py
+++ b/tests/utilities/test_env.py
@@ -2,9 +2,9 @@
 
 
 def test_distributed_env_from_env(monkeypatch):
-    monkeypatch.setenv("WORLD_SIZE", 2)
-    monkeypatch.setenv("GLOBAL_RANK", 1)
-    monkeypatch.setenv("NNODES", 2)
+    monkeypatch.setenv("WORLD_SIZE", "2")
+    monkeypatch.setenv("GLOBAL_RANK", "1")
+    monkeypatch.setenv("NNODES", "2")
 
     dist_env = _DistributedEnv.detect()
     assert dist_env.world_size == 2