diff --git a/changelog/3749.bugfix.rst b/changelog/3749.bugfix.rst
new file mode 100644
index 000000000..395ff12f5
--- /dev/null
+++ b/changelog/3749.bugfix.rst
@@ -0,0 +1,3 @@
+Fix the following error during collection of tests inside packages::
+
+    TypeError: object of type 'Package' has no len()
diff --git a/src/_pytest/main.py b/src/_pytest/main.py
index f5078b9e7..ce07285a4 100644
--- a/src/_pytest/main.py
+++ b/src/_pytest/main.py
@@ -504,13 +504,14 @@ class Session(nodes.FSCollector):
                     pkginit = parent.join("__init__.py")
                     if pkginit.isfile():
                         if pkginit in self._node_cache:
-                            root = self._node_cache[pkginit]
+                            root = self._node_cache[pkginit][0]
                         else:
                             col = root._collectfile(pkginit)
                             if col:
                                 if isinstance(col[0], Package):
                                     root = col[0]
-                                self._node_cache[root.fspath] = root
+                                # always store a list in the cache, matchnodes expects it
+                                self._node_cache[root.fspath] = [root]
 
         # If it's a directory argument, recurse and look for any Subpackages.
         # Let the Package collector deal with subnodes, don't collect here.
@@ -530,8 +531,8 @@ class Session(nodes.FSCollector):
                         if (type(x), x.fspath) in self._node_cache:
                             yield self._node_cache[(type(x), x.fspath)]
                         else:
-                            yield x
                             self._node_cache[(type(x), x.fspath)] = x
+                            yield x
         else:
             assert argpath.check(file=1)
 
diff --git a/testing/example_scripts/collect/package_init_given_as_arg/pkg/__init__.py b/testing/example_scripts/collect/package_init_given_as_arg/pkg/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/testing/example_scripts/collect/package_init_given_as_arg/pkg/test_foo.py b/testing/example_scripts/collect/package_init_given_as_arg/pkg/test_foo.py
new file mode 100644
index 000000000..f17482385
--- /dev/null
+++ b/testing/example_scripts/collect/package_init_given_as_arg/pkg/test_foo.py
@@ -0,0 +1,2 @@
+def test():
+    pass
diff --git a/testing/python/collect.py b/testing/python/collect.py
index c92de12a0..cbfc4a9d2 100644
--- a/testing/python/collect.py
+++ b/testing/python/collect.py
@@ -1591,6 +1591,13 @@ def test_package_collection_infinite_recursion(testdir):
     result.stdout.fnmatch_lines("*1 passed*")
 
 
+def test_package_collection_init_given_as_argument(testdir):
+    """Regression test for #3749"""
+    p = testdir.copy_example("collect/package_init_given_as_arg")
+    result = testdir.runpytest(p / "pkg" / "__init__.py")
+    result.stdout.fnmatch_lines("*1 passed*")
+
+
 def test_package_with_modules(testdir):
     """
     .