diff --git a/README.md b/README.md
index 9784459e6..f5e16d1fc 100644
--- a/README.md
+++ b/README.md
@@ -102,7 +102,9 @@ global-coordinator -> labgrid-aparcar -> openwrt-one
 ```
 
 You can request access to existing labs or contribute your own. To do this,
-submit a pull request modifying the `labnet.yaml` file.
+submit a pull request modifying the `labnet.yaml` file. If you have multiple
+devices of the same model, see [docs/sharing-target-files.md](docs/sharing-target-files.md)
+for how to avoid duplicate target files.
 
 To access a remote device, configure the following environment variables.
 Notably, `LG_PROXY` sets the proxy host (always the lab name):
@@ -111,9 +113,11 @@ Notably, `LG_PROXY` sets the proxy host (always the lab name):
 export LG_IMAGE=~/firmware/openwrt-ath79-generic-tplink_tl-wdr3600-v1-initramfs-kernel.bin # Firmware to boot
 export LG_PLACE=aparcar-tplink_tl-wdr3600-v1 # Target device, formatted as <lab>-<device>
 export LG_PROXY=labgrid-aparcar # Proxy to use, typically the lab name
-export LG_ENV=targets/tplink_tl-wdr3600-v1.yaml # Environment definition
+export LG_ENV=targets/tplink_tl-wdr3600-v1.yaml # Environment definition (optional when using device_instances)
 ```
 
+**Note**: `LG_ENV` is optional when using `device_instances`. If not set, pytest automatically resolves the target file from `LG_PLACE`. Explicitly setting `LG_ENV` takes precedence over automatic resolution. See [docs/sharing-target-files.md](docs/sharing-target-files.md) for details.
+
 To avoid interference from CI or other developers, lock the device before use:
 
 ```shell
diff --git a/ansible/files/coordinator/places.yaml.j2 b/ansible/files/coordinator/places.yaml.j2
index c05f023d2..8cb2fd417 100644
--- a/ansible/files/coordinator/places.yaml.j2
+++ b/ansible/files/coordinator/places.yaml.j2
@@ -1,5 +1,7 @@
 {% for device in labnet["labs"][inventory_hostname]["devices"] %}
-{{ inventory_hostname }}-{{ device }}:
+{% set device_instances = labnet["labs"][inventory_hostname].get("device_instances", {}).get(device, [device]) %}
+{% for instance in device_instances %}
+{{ inventory_hostname }}-{{ instance }}:
   acquired: null
   acquired_resources: []
   aliases: []
@@ -10,9 +12,10 @@
   matches:
   - cls: '*'
     exporter: '*'
-    group: {{ inventory_hostname }}-{{ device }}
+    group: {{ inventory_hostname }}-{{ instance }}
     name: null
     rename: null
   tags:
     device: {{ device }}
 {% endfor %}
+{% endfor %}
diff --git a/docs/sharing-target-files.md b/docs/sharing-target-files.md
new file mode 100644
index 000000000..0b0fcff41
--- /dev/null
+++ b/docs/sharing-target-files.md
@@ -0,0 +1,59 @@
+# Sharing Target Files Across Multiple Devices
+
+When a lab has multiple physical devices of the same model (e.g., three Belkin RT3200 routers), creating separate target configuration files for each device leads to unnecessary duplication and maintenance overhead.
+
+If this is your situation, you can use the `device_instances` field in `labnet.yaml` to define multiple physical instances sharing a single target file:
+
+```yaml
+devices:
+  linksys_e8450:
+    name: Linksys E8450 / Belkin RT3200
+    target: mediatek-mt7622
+    firmware: initramfs-kernel.bin
+
+labs:
+  labgrid-example:
+    proxy: labgrid-example
+    maintainers: "@maintainer"
+    devices:
+      - linksys_e8450
+    device_instances:
+      linksys_e8450:
+        - router_1
+        - router_2
+        - router_3
+```
+
+This will create three different labgrid places from the same configuration file.
+- `labgrid-example-router_1` → `targets/linksys_e8450.yaml`
+- `labgrid-example-router_2` → `targets/linksys_e8450.yaml`
+- `labgrid-example-router_3` → `targets/linksys_e8450.yaml`
+
+## Configuration Separation
+
+- **Generic configuration** (drivers, prompts, strategies) → `targets/linksys_e8450.yaml` (shared)
+- **Device-specific details** (serial ports, IPs, power) → `ansible/files/exporter/<lab>/exporter.yaml` (per device)
+
+## Automatic Target Resolution
+
+When running tests with pytest, simply set `LG_PLACE` - the target file is resolved automatically:
+
+```bash
+export LG_PLACE=labgrid-example-router_1
+export LG_PROXY=labgrid-example
+
+# LG_ENV is automatically set to targets/linksys_e8450.yaml
+pytest tests/ --lg-log
+```
+
+## When to Use
+
+✅ Use `device_instances` when:
+- You have multiple devices of the same model
+- Devices require identical driver configurations
+- Only device-specific details (serial, IP, power) differ
+
+❌ Don't use when:
+- Devices need different driver configurations
+- Firmware boot process differs between instances
+- You only have one device of that specific model
diff --git a/tests/conftest.py b/tests/conftest.py
index a3f06b344..b43d157ee 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -14,17 +14,62 @@
 
 import json
 import logging
+import os
 from os import getenv
+from pathlib import Path
 
 import pytest
 
 logger = logging.getLogger(__name__)
 
-device = getenv("LG_ENV", "Unknown").split("/")[-1].split(".")[0]
 
+def _resolve_target_from_place():
+    lg_env = getenv("LG_ENV")
+    lg_place = getenv("LG_PLACE")
 
-def pytest_addoption(parser):
-    parser.addoption("--firmware", action="store", default="firmware.bin")
+    if lg_env or not lg_place:
+        return lg_env
+
+    parts = lg_place.split("-", 2)
+    if len(parts) < 3:
+        return None
+
+    device_instance = parts[2]
+
+    try:
+        repo_root = Path(__file__).parent.parent
+        labnet_path = repo_root / "labnet.yaml"
+
+        if not labnet_path.exists():
+            return None
+
+        import yaml
+
+        with open(labnet_path, "r") as f:
+            labnet = yaml.safe_load(f)
+
+        if device_instance in labnet.get("devices", {}):
+            device_config = labnet["devices"][device_instance]
+            target_name = device_config.get("target_file", device_instance)
+            target_file = f"targets/{target_name}.yaml"
+            if (repo_root / target_file).exists():
+                return str(repo_root / target_file)
+
+        for lab_name, lab_config in labnet.get("labs", {}).items():
+            device_instances = lab_config.get("device_instances", {})
+            for base_device, instances in device_instances.items():
+                if device_instance in instances:
+                    if base_device in labnet.get("devices", {}):
+                        device_config = labnet["devices"][base_device]
+                        target_name = device_config.get("target_file", base_device)
+                        target_file = f"targets/{target_name}.yaml"
+                        if (repo_root / target_file).exists():
+                            return str(repo_root / target_file)
+
+    except Exception:
+        pass
+
+    return None
 
 
 def pytest_configure(config):
@@ -32,6 +77,17 @@ def pytest_configure(config):
     config._metadata["version"] = "12.3.4"
     config._metadata["environment"] = "staging"
 
+    resolved_env = _resolve_target_from_place()
+    if resolved_env:
+        os.environ["LG_ENV"] = resolved_env
+
+
+device = getenv("LG_ENV", "Unknown").split("/")[-1].split(".")[0]
+
+
+def pytest_addoption(parser):
+    parser.addoption("--firmware", action="store", default="firmware.bin")
+
 
 def ubus_call(command, namespace, method, params={}):
     output = command.run_check(f"ubus call {namespace} {method} '{json.dumps(params)}'")