diff --git a/services/core/java/com/android/server/pm/ComputerEngine.java b/services/core/java/com/android/server/pm/ComputerEngine.java
index 3f3cfd60b5639..052e68064f7c9 100644
--- a/services/core/java/com/android/server/pm/ComputerEngine.java
+++ b/services/core/java/com/android/server/pm/ComputerEngine.java
@@ -3121,7 +3121,7 @@ public class ComputerEngine implements Computer {
                 final ResolveInfo ri = query.get(j);
                 if (DEBUG_PREFERRED || debug) {
                     Slog.v(TAG, "Match for " + ri.activityInfo
-                            + ": 0x" + Integer.toHexString(match));
+                            + ": 0x" + Integer.toHexString(ri.match));
                 }
                 if (ri.match > match) {
                     match = ri.match;
@@ -3213,7 +3213,8 @@ public class ComputerEngine implements Computer {
                     // clear it and re-ask the user their preference, if we're looking for
                     // an "always" type entry.
 
-                    if (always && !pa.mPref.sameSet(query, excludeSetupWizardHomeActivity)) {
+                    if (always
+                            && !pa.mPref.sameSet(query, excludeSetupWizardHomeActivity, userId)) {
                         if (pa.mPref.isSuperset(query, excludeSetupWizardHomeActivity)) {
                             if (allowSetMutation) {
                                 // some components of the set are no longer present in
diff --git a/services/core/java/com/android/server/pm/PreferredComponent.java b/services/core/java/com/android/server/pm/PreferredComponent.java
index ff6b73b36f62f..4ec042f79052d 100644
--- a/services/core/java/com/android/server/pm/PreferredComponent.java
+++ b/services/core/java/com/android/server/pm/PreferredComponent.java
@@ -19,6 +19,7 @@ package com.android.server.pm;
 import android.content.ComponentName;
 import android.content.IntentFilter;
 import android.content.pm.ActivityInfo;
+import android.content.pm.PackageManager;
 import android.content.pm.PackageManagerInternal;
 import android.content.pm.ResolveInfo;
 import android.util.Slog;
@@ -27,6 +28,7 @@ import android.util.TypedXmlSerializer;
 
 import com.android.internal.util.XmlUtils;
 import com.android.server.LocalServices;
+import com.android.server.pm.pkg.PackageUserState;
 
 import org.xmlpull.v1.XmlPullParser;
 import org.xmlpull.v1.XmlPullParserException;
@@ -197,7 +199,7 @@ public class PreferredComponent {
         }
     }
 
-    public boolean sameSet(List<ResolveInfo> query, boolean excludeSetupWizardPackage) {
+    public boolean sameSet(List<ResolveInfo> query, boolean excludeSetupWizardPackage, int userId) {
         if (mSetPackages == null) {
             return query == null;
         }
@@ -206,6 +208,7 @@ public class PreferredComponent {
         }
         final int NQ = query.size();
         final int NS = mSetPackages.length;
+        final PackageManagerInternal pmi = LocalServices.getService(PackageManagerInternal.class);
         int numMatch = 0;
         for (int i=0; i<NQ; i++) {
             ResolveInfo ri = query.get(i);
@@ -218,6 +221,15 @@ public class PreferredComponent {
                 continue;
             }
 
+            // Avoid showing the disambiguation dialog if the package which is installed with
+            // reason INSTALL_REASON_DEVICE_SETUP.
+            final PackageUserState pkgUserState =
+                    pmi.getPackageStateInternal(ai.packageName).getUserStates().get(userId);
+            if (pkgUserState != null && pkgUserState.getInstallReason()
+                    == PackageManager.INSTALL_REASON_DEVICE_SETUP) {
+                continue;
+            }
+
             for (int j=0; j<NS; j++) {
                 if (mSetPackages[j].equals(ai.packageName)
                         && mSetClasses[j].equals(ai.name)) {
diff --git a/services/core/java/com/android/server/pm/Settings.java b/services/core/java/com/android/server/pm/Settings.java
index 7eec7918550a0..9d33835054ef1 100644
--- a/services/core/java/com/android/server/pm/Settings.java
+++ b/services/core/java/com/android/server/pm/Settings.java
@@ -55,11 +55,7 @@ import android.content.pm.parsing.component.ParsedIntentInfo;
 import android.content.pm.parsing.component.ParsedMainComponent;
 import android.content.pm.parsing.component.ParsedPermission;
 import android.content.pm.parsing.component.ParsedProcess;
-
-import com.android.server.pm.pkg.PackageUserState;
-import com.android.server.pm.pkg.PackageUserStateInternal;
 import android.content.pm.pkg.PackageUserStateUtils;
-import com.android.server.pm.pkg.SuspendParams;
 import android.net.Uri;
 import android.os.Binder;
 import android.os.Build;
@@ -117,6 +113,9 @@ import com.android.server.pm.permission.LegacyPermissionDataProvider;
 import com.android.server.pm.permission.LegacyPermissionSettings;
 import com.android.server.pm.permission.LegacyPermissionState;
 import com.android.server.pm.permission.LegacyPermissionState.PermissionState;
+import com.android.server.pm.pkg.PackageUserState;
+import com.android.server.pm.pkg.PackageUserStateInternal;
+import com.android.server.pm.pkg.SuspendParams;
 import com.android.server.pm.verify.domain.DomainVerificationLegacySettings;
 import com.android.server.pm.verify.domain.DomainVerificationManagerInternal;
 import com.android.server.pm.verify.domain.DomainVerificationPersistence;
@@ -3293,7 +3292,7 @@ public final class Settings implements Watchable, Snappable {
         int systemMatch = 0;
         int thirdPartyMatch = 0;
         final int numMatches = (ri == null ? 0 : ri.size());
-        if (numMatches <= 1) {
+        if (numMatches < 1) {
             Slog.w(TAG, "No potential matches found for " + intent
                     + " while setting preferred " + cn.flattenToShortString());
             return;
@@ -4762,7 +4761,9 @@ public final class Settings implements Watchable, Snappable {
             pw.print(" instant=");
             pw.print(ps.getInstantApp(user.id));
             pw.print(" virtual=");
-            pw.println(ps.getVirtualPreload(user.id));
+            pw.print(ps.getVirtualPreload(user.id));
+            pw.print(" installReason=");
+            pw.println(ps.getInstallReason(user.id));
 
             if (ps.getSuspended(user.id)) {
                 pw.print(prefix);
diff --git a/services/tests/servicestests/src/com/android/server/pm/PreferredComponentTest.java b/services/tests/servicestests/src/com/android/server/pm/PreferredComponentTest.java
new file mode 100644
index 0000000000000..6650e59fa5fe2
--- /dev/null
+++ b/services/tests/servicestests/src/com/android/server/pm/PreferredComponentTest.java
@@ -0,0 +1,153 @@
+/*
+ * Copyright (C) 2021 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package com.android.server.pm;
+
+import static org.junit.Assert.assertFalse;
+import static org.junit.Assert.assertTrue;
+import static org.mockito.ArgumentMatchers.anyInt;
+import static org.mockito.Mockito.doReturn;
+import static org.mockito.Mockito.mock;
+
+import android.content.ComponentName;
+import android.content.IntentFilter;
+import android.content.pm.ActivityInfo;
+import android.content.pm.ApplicationInfo;
+import android.content.pm.PackageManager;
+import android.content.pm.PackageManagerInternal;
+import android.content.pm.ResolveInfo;
+import android.os.UserHandle;
+import android.platform.test.annotations.Presubmit;
+import android.util.SparseArray;
+
+import com.android.server.LocalServices;
+import com.android.server.pm.pkg.PackageStateInternal;
+import com.android.server.pm.pkg.PackageUserState;
+import com.android.server.pm.pkg.PackageUserStateImpl;
+
+import org.junit.Before;
+import org.junit.Test;
+import org.junit.runner.RunWith;
+import org.junit.runners.JUnit4;
+
+import java.util.ArrayList;
+import java.util.List;
+
+@Presubmit
+@RunWith(JUnit4.class)
+public class PreferredComponentTest {
+
+    private PackageManagerInternal mMockPackageManagerInternal;
+
+    @Before
+    public void setUp() {
+        mMockPackageManagerInternal = mock(PackageManagerInternal.class);
+        LocalServices.removeServiceForTest(PackageManagerInternal.class);
+        LocalServices.addService(PackageManagerInternal.class, mMockPackageManagerInternal);
+    }
+
+    @Test
+    public void testPreferredComponent_sameSet_withAppInstalledByDeviceSetup() {
+        // Assume we have two ResolveInfos that handle the same Intent.
+        final int userId = UserHandle.USER_SYSTEM;
+        final List<ResolveInfo> query = new ArrayList<>();
+        query.add(createResolveInfo(0, userId));
+        query.add(createResolveInfo(1, userId));
+        // ResolveInfo(0) is already set as the preferred one when only it exists.
+        final ComponentName component = query.get(0).getComponentInfo().getComponentName();
+        final PreferredActivity pa = new PreferredActivity(new IntentFilter("TEST_ACTION"),
+                0 /* match */, new ComponentName[]{component}, component, true /* always */);
+
+        // Assume ResolveInfo(0) is preinstalled, and ResolveInfo(1) is installed when device setup.
+        final PackageUserState pkgUserState0 = new PackageUserStateImpl().setInstallReason(
+                PackageManager.INSTALL_REASON_UNKNOWN);
+        final PackageUserState pkgUserState1 = new PackageUserStateImpl().setInstallReason(
+                PackageManager.INSTALL_REASON_DEVICE_SETUP);
+        final PackageStateInternal psInt0 = mock(PackageStateInternal.class);
+        final PackageStateInternal psInt1 = mock(PackageStateInternal.class);
+        final SparseArray<Object> userStates0 = mock(SparseArray.class);
+        final SparseArray<Object> userStates1 = mock(SparseArray.class);
+        doReturn(psInt0).when(mMockPackageManagerInternal).getPackageStateInternal("foo_bar0");
+        doReturn(psInt1).when(mMockPackageManagerInternal).getPackageStateInternal("foo_bar1");
+        doReturn(userStates0).when(psInt0).getUserStates();
+        doReturn(userStates1).when(psInt1).getUserStates();
+        doReturn(pkgUserState0).when(userStates0).get(anyInt());
+        doReturn(pkgUserState1).when(userStates1).get(anyInt());
+
+        // Check if ResolveInfo(1) which is installed by device setup affects the preferred set and
+        // this may trigger disambiguation dialog.
+        assertTrue(pa.mPref.sameSet(query, true /* excludeSetupWizardPackage */, userId));
+    }
+
+    @Test
+    public void testPreferredComponent_notSameSet_withAppNotInstalledByDeviceSetup() {
+        // Assume we have two ResolveInfos that handle the same Intent.
+        final int userId = UserHandle.USER_SYSTEM;
+        final List<ResolveInfo> query = new ArrayList<>();
+        query.add(createResolveInfo(0, userId));
+        query.add(createResolveInfo(1, userId));
+        // ResolveInfo(0) is already set as the preferred one when only it exists.
+        final ComponentName component = query.get(0).getComponentInfo().getComponentName();
+        final PreferredActivity pa = new PreferredActivity(new IntentFilter("TEST_ACTION"),
+                0 /* match */, new ComponentName[]{component}, component, true /* always */);
+
+        // Assume ResolveInfo(0) is preinstalled, and ResolveInfo(1) is installed by user.
+        final PackageUserState pkgUserState0 = new PackageUserStateImpl().setInstallReason(
+                PackageManager.INSTALL_REASON_UNKNOWN);
+        final PackageUserState pkgUserState1 = new PackageUserStateImpl().setInstallReason(
+                PackageManager.INSTALL_REASON_USER);
+        final PackageStateInternal psInt0 = mock(PackageStateInternal.class);
+        final PackageStateInternal psInt1 = mock(PackageStateInternal.class);
+        final SparseArray<Object> userStates0 = mock(SparseArray.class);
+        final SparseArray<Object> userStates1 = mock(SparseArray.class);
+        doReturn(psInt0).when(mMockPackageManagerInternal).getPackageStateInternal("foo_bar0");
+        doReturn(psInt1).when(mMockPackageManagerInternal).getPackageStateInternal("foo_bar1");
+        doReturn(userStates0).when(psInt0).getUserStates();
+        doReturn(userStates1).when(psInt1).getUserStates();
+        doReturn(pkgUserState0).when(userStates0).get(anyInt());
+        doReturn(pkgUserState1).when(userStates1).get(anyInt());
+
+        // Check if ResolveInfo(1) which is installed by user affects the preferred set and
+        // this may trigger disambiguation dialog.
+        assertFalse(pa.mPref.sameSet(query, true /* excludeSetupWizardPackage */, userId));
+    }
+
+    private static ResolveInfo createResolveInfo(int i, int userId) {
+        final ResolveInfo resolveInfo = new ResolveInfo();
+        resolveInfo.activityInfo = createActivityInfo(i);
+        resolveInfo.targetUserId = userId;
+        return resolveInfo;
+    }
+
+    private static ActivityInfo createActivityInfo(int i) {
+        final ActivityInfo ai = new ActivityInfo();
+        ai.name = "activity_name" + i;
+        ai.packageName = "foo_bar" + i;
+        ai.enabled = true;
+        ai.exported = true;
+        ai.permission = null;
+        ai.applicationInfo = createApplicationInfo(i, ai.packageName);
+        return ai;
+    }
+
+    private static ApplicationInfo createApplicationInfo(int i, String packageName) {
+        final ApplicationInfo ai = new ApplicationInfo();
+        ai.name = "app_name" + i;
+        ai.packageName = packageName;
+        ai.enabled = true;
+        return ai;
+    }
+}