diff --git a/plugins/inventory/esxi_hosts.py b/plugins/inventory/esxi_hosts.py
index e23fb97f..6497a246 100644
--- a/plugins/inventory/esxi_hosts.py
+++ b/plugins/inventory/esxi_hosts.py
@@ -73,17 +73,17 @@
         type: list
         elements: str
         default: []
-    group_by_path:
+    group_by_paths:
         description:
             - If true, groups will be created based on the ESXI hosts' paths.
-            - Any slashes in the paths will be replaced by underscores in the group names.
+            - Paths will be sanitized to match Ansible group name standards. For example, any slashes or dashes in the paths will be replaced by underscores in the group names.
             - A group is created for each step down in the path, with the group from the step above containing subsequent groups.
-            - For example, a path /DC/hosts/Cluster will create groups 'DC' which contains group 'DC_hosts' which contains group 'DC_hosts_Cluster'
+            - For example, a path /DC-01/hosts/Cluster will create groups 'DC_01' which contains group 'DC_01_hosts' which contains group 'DC_01_hosts_Cluster'
         default: false
         type: bool
-    group_by_path_prefix:
+    group_by_paths_prefix:
         description:
-            - If O(group_by_path) is true, set this variable if you want to add a prefix to any groups created based on paths.
+            - If O(group_by_paths) is true, set this variable if you want to add a prefix to any groups created based on paths.
             - By default, no prefix is added to the group names.
         default: ''
         type: str
@@ -113,7 +113,7 @@
 plugin: vmware.vmware.esxi_hosts
 
 # Create groups based on host paths
-group_by_path: true
+group_by_paths: true
 
 # Create a group with hosts that support vMotion using the vmotionSupported property
 properties: ["name", "capability"]
@@ -404,15 +404,15 @@ def add_host_to_groups_based_on_path(self, esxi_host: EsxiInventoryHost):
         Optionally, the user can add a prefix to the groups created by this process.
         The final group in the path will be where the ESXi host is added.
         """
-        if not self.get_option("group_by_path"):
+        if not self.get_option("group_by_paths"):
             return
 
         path_parts = esxi_host.path.split('/')
         group_name_parts = []
         last_created_group = None
 
-        if self.get_option("group_by_path_prefix"):
-            group_name_parts = [self.get_option("group_by_path_prefix")]
+        if self.get_option("group_by_paths_prefix"):
+            group_name_parts = [self.get_option("group_by_paths_prefix")]
 
         for path_part in path_parts:
             if not path_part:
diff --git a/tests/integration/targets/vmware_inventory_esxi_hosts/defaults/main.yml b/tests/integration/targets/vmware_inventory_esxi_hosts/defaults/main.yml
new file mode 100644
index 00000000..539b766c
--- /dev/null
+++ b/tests/integration/targets/vmware_inventory_esxi_hosts/defaults/main.yml
@@ -0,0 +1 @@
+run_on_simulator: false
diff --git a/tests/integration/targets/vmware_inventory_esxi_hosts/files/test.esxi_hosts.yml b/tests/integration/targets/vmware_inventory_esxi_hosts/files/test.esxi_hosts.yml
new file mode 100644
index 00000000..00b5173c
--- /dev/null
+++ b/tests/integration/targets/vmware_inventory_esxi_hosts/files/test.esxi_hosts.yml
@@ -0,0 +1,6 @@
+---
+plugin: vmware.vmware.esxi_hosts
+cache: false
+group_by_paths: true
+group_by_paths_prefix: test
+gather_tags: true
diff --git a/tests/integration/targets/vmware_inventory_esxi_hosts/run.yml b/tests/integration/targets/vmware_inventory_esxi_hosts/run.yml
new file mode 100644
index 00000000..55b14107
--- /dev/null
+++ b/tests/integration/targets/vmware_inventory_esxi_hosts/run.yml
@@ -0,0 +1,13 @@
+- hosts: localhost
+  gather_facts: no
+  tasks:
+    - name: Import eco-vcenter credentials
+      ansible.builtin.include_vars:
+        file: ../../integration_config.yml
+      tags: eco-vcenter-ci
+
+    - name: Call esxi_hosts inventory role
+      ansible.builtin.import_role:
+        name: vmware_inventory_esxi_hosts
+      tags:
+        - eco-vcenter-ci
diff --git a/tests/integration/targets/vmware_inventory_esxi_hosts/tasks/main.yml b/tests/integration/targets/vmware_inventory_esxi_hosts/tasks/main.yml
new file mode 100644
index 00000000..32f00c95
--- /dev/null
+++ b/tests/integration/targets/vmware_inventory_esxi_hosts/tasks/main.yml
@@ -0,0 +1,29 @@
+---
+- block:
+    - name: Import common vars
+      ansible.builtin.include_vars:
+        file: ../group_vars.yml
+
+    - name: Run Inventory Plugin
+      ansible.builtin.command: ansible-inventory -i "{{ role_path }}/files/test.esxi_hosts.yml" --list
+      register: _inventory_out
+
+    - name: Parse Inventory Results as JSON
+      ansible.builtin.set_fact:
+        inventory_results: "{{ _inventory_out.stdout | from_json }}"
+
+    # you can't reference the 'all' property here for some reason. It reverts back to the test playbook inventory
+    # instead of the inventory_results
+    - name: Check Output
+      ansible.builtin.assert:
+        that:
+          - first_host.ansible_host
+          - first_host.tags is defined
+          - first_host.tags_by_category is defined
+          - >-
+            (inventory_results.poweredOn.hosts | length) ==
+            (inventory_results._meta.hostvars.values() | selectattr('summary.runtime.powerState', 'equalto', 'poweredOn') | length)
+          - (inventory_results | length) > 3
+          - ('test_' + vcenter_datacenter | replace('-', '_')) in inventory_results.keys()
+      vars:
+        first_host: "{{ (inventory_results._meta.hostvars.values() | first) }}"