diff --git a/test/test_cpp_extensions_jit.py b/test/test_cpp_extensions_jit.py
index 3d101519a23..ef4e5b5cb1e 100644
--- a/test/test_cpp_extensions_jit.py
+++ b/test/test_cpp_extensions_jit.py
@@ -3,8 +3,10 @@
 import glob
 import locale
 import os
+import random
 import re
 import shutil
+import string
 import subprocess
 import sys
 import tempfile
@@ -116,11 +118,13 @@ class TestCppExtensionJIT(common.TestCase):
         # 2 * sigmoid(0) = 2 * 0.5 = 1
         self.assertEqual(z, torch.ones_like(z))
 
-    @unittest.skipIf(not (TEST_XPU), "XPU not found")
-    def test_jit_xpu_extension(self):
-        # NOTE: The name of the extension must equal the name of the module.
+    def _test_jit_xpu_extension(self):
+        name = "torch_test_xpu_extension_"
+        # randomizing name for the case when we test building few extensions
+        # in a row using this function
+        name += "".join(random.sample(string.ascii_letters, 5))
         module = torch.utils.cpp_extension.load(
-            name="torch_test_xpu_extension",
+            name=name,
             sources=[
                 "cpp_extensions/xpu_extension.sycl",
             ],
@@ -136,6 +140,31 @@ class TestCppExtensionJIT(common.TestCase):
         # 2 * sigmoid(0) = 2 * 0.5 = 1
         self.assertEqual(z, torch.ones_like(z))
 
+    @unittest.skipIf(not (TEST_XPU), "XPU not found")
+    def test_jit_xpu_extension(self):
+        # NOTE: this test can be affected by setting TORCH_XPU_ARCH_LIST
+        self._test_jit_xpu_extension()
+
+    @unittest.skipIf(not (TEST_XPU), "XPU not found")
+    def test_jit_xpu_archlists(self):
+        # NOTE: in this test we explicitly test few different options
+        # for TORCH_XPU_ARCH_LIST. Setting TORCH_XPU_ARCH_LIST in the
+        # environment before the test won't affect it.
+        archlists = [
+            "",  # expecting JIT compilation
+            ",".join(torch.xpu.get_arch_list()),
+        ]
+        old_envvar = os.environ.get("TORCH_XPU_ARCH_LIST", None)
+        try:
+            for al in archlists:
+                os.environ["TORCH_XPU_ARCH_LIST"] = al
+                self._test_jit_xpu_extension()
+        finally:
+            if old_envvar is None:
+                os.environ.pop("TORCH_XPU_ARCH_LIST")
+            else:
+                os.environ["TORCH_XPU_ARCH_LIST"] = old_envvar
+
     @unittest.skipIf(not TEST_MPS, "MPS not found")
     def test_mps_extension(self):
         module = torch.utils.cpp_extension.load(
diff --git a/torch/utils/cpp_extension.py b/torch/utils/cpp_extension.py
index 50601fa9b68..7697b9394a3 100644
--- a/torch/utils/cpp_extension.py
+++ b/torch/utils/cpp_extension.py
@@ -291,16 +291,25 @@ def _get_sycl_arch_list():
 # If arch list returned by _get_sycl_arch_list() is empty, then sycl kernels will be compiled
 # for default spir64 target and avoid device specific compilations entirely. Further, kernels
 # will be JIT compiled at runtime.
+def _get_sycl_target_flags():
+    if _get_sycl_arch_list() != '':
+        return ['-fsycl-targets=spir64_gen,spir64']
+    return ['']
+
+def _get_sycl_device_flags():
+    arch_list = _get_sycl_arch_list()
+    if arch_list != '':
+        return [f'-Xs "-device {arch_list}"']
+    return ['']
+
 _COMMON_SYCL_FLAGS = [
     '-fsycl',
-    '-fsycl-targets=spir64_gen,spir64' if _get_sycl_arch_list() != '' else '',
 ]
 
 _SYCL_DLINK_FLAGS = [
     *_COMMON_SYCL_FLAGS,
     '-fsycl-link',
     '--offload-compress',
-    f'-Xs "-device {_get_sycl_arch_list()}"' if _get_sycl_arch_list() != '' else '',
 ]
 
 JIT_EXTENSION_VERSIONER = ExtensionVersioner()
@@ -812,6 +821,7 @@ class BuildExtension(build_ext):
             sycl_dlink_post_cflags = None
             if with_sycl:
                 sycl_cflags = extra_cc_cflags + common_cflags + _COMMON_SYCL_FLAGS
+                sycl_cflags += _get_sycl_target_flags()
                 if isinstance(extra_postargs, dict):
                     sycl_post_cflags = extra_postargs['sycl']
                 else:
@@ -829,6 +839,7 @@ class BuildExtension(build_ext):
                 sycl_cflags = [shlex.quote(f) for f in sycl_cflags]
                 sycl_cflags += _wrap_sycl_host_flags(host_cflags)
                 sycl_dlink_post_cflags = _SYCL_DLINK_FLAGS
+                sycl_dlink_post_cflags += _get_sycl_device_flags()
                 sycl_post_cflags = [shlex.quote(f) for f in sycl_post_cflags]
 
             _write_ninja_file_and_compile_objects(
@@ -2688,6 +2699,7 @@ def _write_ninja_file_to_build_library(path,
 
     if with_sycl:
         sycl_cflags = cflags + _COMMON_SYCL_FLAGS
+        sycl_cflags += _get_sycl_target_flags()
         sycl_cflags += extra_sycl_cflags
         _append_sycl_std_if_no_std_present(sycl_cflags)
         host_cflags = cflags
@@ -2696,6 +2708,7 @@ def _write_ninja_file_to_build_library(path,
         host_cflags = ' '.join(host_cflags)
         sycl_cflags += _wrap_sycl_host_flags(host_cflags)
         sycl_dlink_post_cflags = _SYCL_DLINK_FLAGS
+        sycl_dlink_post_cflags += _get_sycl_device_flags()
     else:
         sycl_cflags = None
         sycl_dlink_post_cflags = None