diff --git a/tests/test_context.py b/tests/test_context.py
index 0f340cb8..44eae3f6 100644
--- a/tests/test_context.py
+++ b/tests/test_context.py
@@ -4,6 +4,7 @@
 import sys
 import unittest
 import weakref
+import socket
 
 from uvloop import _testbase as tb
 
@@ -139,6 +140,40 @@ async def main():
         del tracked
         self.assertIsNone(ref())
 
+    @unittest.skipUnless(PY37, 'requires Python 3.7')
+    def test_create_server_protocol_factory_context(self):
+        import contextvars
+        cvar = contextvars.ContextVar('cvar', default='outer')
+        factory_called_future = self.loop.create_future()
+
+        def factory():
+            try:
+                self.assertEqual(cvar.get(), 'inner')
+            except Exception as e:
+                factory_called_future.set_exception(e)
+            else:
+                factory_called_future.set_result(None)
+
+            return asyncio.Protocol()
+
+        async def test():
+            cvar.set('inner')
+            port = tb.find_free_port()
+            srv = await self.loop.create_server(factory, '127.0.0.1', port)
+
+            s = socket.socket(socket.AF_INET)
+            with s:
+                s.setblocking(False)
+                await self.loop.sock_connect(s, ('127.0.0.1', port))
+
+            try:
+                await factory_called_future
+            finally:
+                srv.close()
+                await srv.wait_closed()
+
+        self.loop.run_until_complete(test())
+
 
 class Test_UV_Context(_ContextBaseTests, tb.UVTestCase):
 
diff --git a/uvloop/handles/streamserver.pxd b/uvloop/handles/streamserver.pxd
index b2ab1887..e2093316 100644
--- a/uvloop/handles/streamserver.pxd
+++ b/uvloop/handles/streamserver.pxd
@@ -7,6 +7,7 @@ cdef class UVStreamServer(UVSocketHandle):
         object protocol_factory
         bint opened
         Server _server
+        object listen_context
 
     # All "inline" methods are final
 
diff --git a/uvloop/handles/streamserver.pyx b/uvloop/handles/streamserver.pyx
index 7b2258dd..418ed561 100644
--- a/uvloop/handles/streamserver.pyx
+++ b/uvloop/handles/streamserver.pyx
@@ -8,6 +8,7 @@ cdef class UVStreamServer(UVSocketHandle):
         self.ssl_handshake_timeout = None
         self.ssl_shutdown_timeout = None
         self.protocol_factory = None
+        self.listen_context = None
 
     cdef inline _init(self, Loop loop, object protocol_factory,
                       Server server,
@@ -53,6 +54,9 @@ cdef class UVStreamServer(UVSocketHandle):
         if self.opened != 1:
             raise RuntimeError('unopened TCPServer')
 
+        if PY37:
+            self.listen_context = Context_CopyCurrent()
+
         err = uv.uv_listen(<uv.uv_stream_t*> self._handle,
                            self.backlog,
                            __uv_streamserver_on_listen)
@@ -140,6 +144,11 @@ cdef void __uv_streamserver_on_listen(uv.uv_stream_t* handle,
         return
 
     try:
+        if PY37:
+            Context_Enter(stream.listen_context)
         stream._on_listen()
     except BaseException as exc:
         stream._error(exc, False)
+    finally:
+        if PY37:
+            Context_Exit(stream.listen_context)