diff --git a/source/adapters/hip/CMakeLists.txt b/source/adapters/hip/CMakeLists.txt
index 2f205d84e6..3be96278e1 100644
--- a/source/adapters/hip/CMakeLists.txt
+++ b/source/adapters/hip/CMakeLists.txt
@@ -3,7 +3,7 @@
 # See LICENSE.TXT
 # SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
 
-set(HIP_DIR "${SYCL_ADAPTER_DIR}/sycl/plugins/unified_runtime/ur/adapters/hip")
+set(HIP_DIR "${SYCL_ADAPTER_DIR}/sycl/plugins/unified_runtime/ur/adapters/hip" CACHE PATH "HIP adapter directory")
 
 set(TARGET_NAME ur_adapter_hip)
 
diff --git a/test/conformance/adapters/hip/CMakeLists.txt b/test/conformance/adapters/hip/CMakeLists.txt
index 8cbd4c19ac..c834361dc2 100644
--- a/test/conformance/adapters/hip/CMakeLists.txt
+++ b/test/conformance/adapters/hip/CMakeLists.txt
@@ -8,8 +8,12 @@ add_conformance_test_with_devices_environment(adapter-hip
     hip_urContextGetNativeHandle.cpp
     hip_urDeviceGetNativeHandle.cpp
     hip_urEventGetNativeHandle.cpp
+    test_context.cpp
 )
 target_link_libraries(test-adapter-hip PRIVATE rocmdrv)
+target_include_directories(test-adapter-hip PRIVATE ${HIP_DIR} "${HIP_DIR}/../../..")
+# TODO - remove as part of #789
+target_compile_definitions(test-adapter-hip PRIVATE UR_INCLUDE_HANDLE_IMPLEMENTATION_OVERLOADS)
 
 if(UR_HIP_PLATFORM STREQUAL "AMD")
     target_compile_definitions(test-adapter-hip PRIVATE __HIP_PLATFORM_AMD__)
diff --git a/test/conformance/adapters/hip/hip_fixtures.h b/test/conformance/adapters/hip/hip_fixtures.h
index 077ab28b71..f982cc0490 100644
--- a/test/conformance/adapters/hip/hip_fixtures.h
+++ b/test/conformance/adapters/hip/hip_fixtures.h
@@ -37,8 +37,7 @@ struct ResultHip {
 #endif // EXPECT_EQ_RESULT_HIP
 
 #ifndef EXPECT_SUCCESS_HIP
-#define EXPECT_SUCCESS_HIP(ACTUAL)                                             \
-    EXPECT_EQ_RESULT_HIP(UR_RESULT_SUCCESS, ACTUAL)
+#define EXPECT_SUCCESS_HIP(ACTUAL) EXPECT_EQ_RESULT_HIP(hipSuccess, ACTUAL)
 #endif // EXPECT_EQ_RESULT_HIP
 
 #endif // UR_TEST_CONFORMANCE_ADAPTERS_HIP_FIXTURES_H_INCLUDED
diff --git a/test/conformance/adapters/hip/test_context.cpp b/test/conformance/adapters/hip/test_context.cpp
new file mode 100644
index 0000000000..1d538a738b
--- /dev/null
+++ b/test/conformance/adapters/hip/test_context.cpp
@@ -0,0 +1,109 @@
+// Copyright (C) 2022-2023 Intel Corporation
+// Part of the Unified-Runtime Project, under the Apache License v2.0 with LLVM Exceptions.
+// See LICENSE.TXT
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+#pragma GCC diagnostic push
+#pragma GCC diagnostic ignored "-Wdeprecated-declarations"
+#include "context.hpp"
+#include "hip_fixtures.h"
+#include "queue.hpp"
+
+using urHipContextTest = uur::urDeviceTest;
+UUR_INSTANTIATE_DEVICE_TEST_SUITE_P(urHipContextTest);
+
+TEST_P(urHipContextTest, ActiveContexts) {
+    ur_context_handle_t context = nullptr;
+    ASSERT_SUCCESS(urContextCreate(1, &device, nullptr, &context));
+    ASSERT_NE(context, nullptr);
+
+    ur_queue_handle_t queue = nullptr;
+    ASSERT_SUCCESS(urQueueCreate(context, device, nullptr, &queue));
+    ASSERT_NE(queue, nullptr);
+
+    // ensure that the queue has the correct context
+    ASSERT_EQ(context, queue->getContext());
+
+    // check that the current context is the active HIP context
+    hipCtx_t hipContext = nullptr;
+    ASSERT_SUCCESS_HIP(hipCtxGetCurrent(&hipContext));
+    ASSERT_NE(hipContext, nullptr);
+    ASSERT_EQ(hipContext, context->getDevice()->getNativeContext());
+
+    ASSERT_SUCCESS(urQueueRelease(queue));
+    ASSERT_SUCCESS(urContextRelease(context));
+}
+
+TEST_P(urHipContextTest, ActiveContextsThreads) {
+    ur_context_handle_t context1 = nullptr;
+    ASSERT_SUCCESS(urContextCreate(1, &device, nullptr, &context1));
+    ASSERT_NE(context1, nullptr);
+
+    ur_context_handle_t context2 = nullptr;
+    ASSERT_SUCCESS(urContextCreate(1, &device, nullptr, &context2));
+    ASSERT_NE(context2, nullptr);
+
+    // setup synchronization
+    std::mutex mtx;
+    std::condition_variable cv;
+    bool released = false;
+    bool thread_done = false;
+
+    auto test_thread = std::thread([&] {
+        hipCtx_t current = nullptr;
+        ur_queue_handle_t queue = nullptr;
+        ASSERT_SUCCESS(urQueueCreate(context1, device, nullptr, &queue));
+        ASSERT_NE(queue, nullptr);
+
+        // ensure queue has the correct context
+        ASSERT_EQ(queue->getContext(), context1);
+
+        // check that the first context is now the active HIP context
+        ASSERT_SUCCESS_HIP(hipCtxGetCurrent(&current));
+        ASSERT_EQ(current, context1->getDevice()->getNativeContext());
+
+        ASSERT_SUCCESS(urQueueRelease(queue));
+
+        // mark the first set of processing as done and notify the main thread
+        {
+            std::unique_lock<std::mutex> lock(mtx);
+            thread_done = true;
+        }
+        cv.notify_one();
+
+        // wait for main thread to release the first context
+        {
+            std::unique_lock<std::mutex> lock(mtx);
+            cv.wait(lock, [&] { return released; });
+        }
+
+        // create a queue with the 2nd context
+        queue = nullptr;
+        ASSERT_SUCCESS(urQueueCreate(context2, device, nullptr, &queue));
+        ASSERT_NE(queue, nullptr);
+
+        // ensure the queue has the correct context
+        ASSERT_EQ(queue->getContext(), context2);
+
+        // check that the second context is now the active HIP context
+        ASSERT_SUCCESS_HIP(hipCtxGetCurrent(&current));
+        ASSERT_EQ(current, context2->getDevice()->getNativeContext());
+
+        ASSERT_SUCCESS(urQueueRelease(queue));
+    });
+
+    // wait for the thread to be done with the first queue
+    std::unique_lock<std::mutex> lock(mtx);
+    cv.wait(lock, [&] { return thread_done; });
+    ASSERT_SUCCESS(urContextRelease(context1));
+
+    released = true;
+    lock.unlock();
+    cv.notify_one();
+
+    // wait for thread to finish
+    test_thread.join();
+
+    ASSERT_SUCCESS(urContextRelease(context2));
+}
+#pragma GCC diagnostic pop