diff --git a/esphome/util.py b/esphome/util.py
index 6362260fde..23a66be4eb 100644
--- a/esphome/util.py
+++ b/esphome/util.py
@@ -272,12 +272,15 @@ class OrderedDict(collections.OrderedDict):
         return dict(self).__repr__()
 
 
-def list_yaml_files(folders: list[str]) -> list[str]:
-    files = filter_yaml_files(
-        [os.path.join(folder, p) for folder in folders for p in os.listdir(folder)]
-    )
-    files.sort()
-    return files
+def list_yaml_files(configs: list[str]) -> list[str]:
+    files: list[str] = []
+    for config in configs:
+        if os.path.isfile(config):
+            files.append(config)
+        else:
+            files.extend(os.path.join(config, p) for p in os.listdir(config))
+    files = filter_yaml_files(files)
+    return sorted(files)
 
 
 def filter_yaml_files(files: list[str]) -> list[str]:
diff --git a/tests/unit_tests/test_util.py b/tests/unit_tests/test_util.py
new file mode 100644
index 0000000000..74d6a74709
--- /dev/null
+++ b/tests/unit_tests/test_util.py
@@ -0,0 +1,143 @@
+"""Tests for esphome.util module."""
+
+from pathlib import Path
+
+import pytest
+
+from esphome import util
+
+
+def test_list_yaml_files_with_files_and_directories(tmp_path: Path) -> None:
+    """Test that list_yaml_files handles both files and directories."""
+    # Create directory structure
+    dir1 = tmp_path / "configs"
+    dir1.mkdir()
+    dir2 = tmp_path / "more_configs"
+    dir2.mkdir()
+
+    # Create YAML files in directories
+    (dir1 / "config1.yaml").write_text("test: 1")
+    (dir1 / "config2.yml").write_text("test: 2")
+    (dir1 / "not_yaml.txt").write_text("not yaml")
+
+    (dir2 / "config3.yaml").write_text("test: 3")
+
+    # Create standalone YAML files
+    standalone1 = tmp_path / "standalone.yaml"
+    standalone1.write_text("test: 4")
+    standalone2 = tmp_path / "another.yml"
+    standalone2.write_text("test: 5")
+
+    # Test with mixed input (directories and files)
+    configs = [
+        str(dir1),
+        str(standalone1),
+        str(dir2),
+        str(standalone2),
+    ]
+
+    result = util.list_yaml_files(configs)
+
+    # Should include all YAML files but not the .txt file
+    assert set(result) == {
+        str(dir1 / "config1.yaml"),
+        str(dir1 / "config2.yml"),
+        str(dir2 / "config3.yaml"),
+        str(standalone1),
+        str(standalone2),
+    }
+    # Check that results are sorted
+    assert result == sorted(result)
+
+
+def test_list_yaml_files_only_directories(tmp_path: Path) -> None:
+    """Test list_yaml_files with only directories."""
+    dir1 = tmp_path / "dir1"
+    dir1.mkdir()
+    dir2 = tmp_path / "dir2"
+    dir2.mkdir()
+
+    (dir1 / "a.yaml").write_text("test: a")
+    (dir1 / "b.yml").write_text("test: b")
+    (dir2 / "c.yaml").write_text("test: c")
+
+    result = util.list_yaml_files([str(dir1), str(dir2)])
+
+    assert set(result) == {
+        str(dir1 / "a.yaml"),
+        str(dir1 / "b.yml"),
+        str(dir2 / "c.yaml"),
+    }
+    assert result == sorted(result)
+
+
+def test_list_yaml_files_only_files(tmp_path: Path) -> None:
+    """Test list_yaml_files with only files."""
+    file1 = tmp_path / "file1.yaml"
+    file2 = tmp_path / "file2.yml"
+    file3 = tmp_path / "file3.yaml"
+    non_yaml = tmp_path / "not_yaml.json"
+
+    file1.write_text("test: 1")
+    file2.write_text("test: 2")
+    file3.write_text("test: 3")
+    non_yaml.write_text("{}")
+
+    # Include a non-YAML file to test filtering
+    result = util.list_yaml_files(
+        [
+            str(file1),
+            str(file2),
+            str(file3),
+            str(non_yaml),
+        ]
+    )
+
+    assert set(result) == {
+        str(file1),
+        str(file2),
+        str(file3),
+    }
+    assert result == sorted(result)
+
+
+def test_list_yaml_files_empty_directory(tmp_path: Path) -> None:
+    """Test list_yaml_files with an empty directory."""
+    empty_dir = tmp_path / "empty"
+    empty_dir.mkdir()
+
+    result = util.list_yaml_files([str(empty_dir)])
+
+    assert result == []
+
+
+def test_list_yaml_files_nonexistent_path(tmp_path: Path) -> None:
+    """Test list_yaml_files with a nonexistent path raises an error."""
+    nonexistent = tmp_path / "nonexistent"
+    existing = tmp_path / "existing.yaml"
+    existing.write_text("test: 1")
+
+    # Should raise an error for non-existent directory
+    with pytest.raises(FileNotFoundError):
+        util.list_yaml_files([str(nonexistent), str(existing)])
+
+
+def test_list_yaml_files_mixed_extensions(tmp_path: Path) -> None:
+    """Test that both .yaml and .yml extensions are recognized."""
+    dir1 = tmp_path / "configs"
+    dir1.mkdir()
+
+    yaml_file = dir1 / "config.yaml"
+    yml_file = dir1 / "config.yml"
+    other_file = dir1 / "config.txt"
+
+    yaml_file.write_text("test: yaml")
+    yml_file.write_text("test: yml")
+    other_file.write_text("test: txt")
+
+    result = util.list_yaml_files([str(dir1)])
+
+    assert set(result) == {
+        str(yaml_file),
+        str(yml_file),
+    }