diff --git a/changelogs/fragments/7369-fix-lxc-options.yml b/changelogs/fragments/7369-fix-lxc-options.yml
new file mode 100644
index 0000000000..c909f34603
--- /dev/null
+++ b/changelogs/fragments/7369-fix-lxc-options.yml
@@ -0,0 +1,3 @@
+---
+bugfixes:
+  - lxc connection plugin - properly evaluate options (https://github.com/ansible-collections/community.general/pull/7369).
diff --git a/plugins/connection/lxc.py b/plugins/connection/lxc.py
index 7ad5807244..35cc0b3c81 100644
--- a/plugins/connection/lxc.py
+++ b/plugins/connection/lxc.py
@@ -60,7 +60,7 @@ class Connection(ConnectionBase):
     def __init__(self, play_context, new_stdin, *args, **kwargs):
         super(Connection, self).__init__(play_context, new_stdin, *args, **kwargs)
 
-        self.container_name = self._play_context.remote_addr
+        self.container_name = None
         self.container = None
 
     def _connect(self):
@@ -68,12 +68,14 @@ class Connection(ConnectionBase):
         super(Connection, self)._connect()
 
         if not HAS_LIBLXC:
-            msg = "lxc bindings for python2 are not installed"
+            msg = "lxc python bindings are not installed"
             raise errors.AnsibleError(msg)
 
         if self.container:
             return
 
+        self.container_name = self.get_option('remote_addr')
+
         self._display.vvv("THIS IS A LOCAL LXC DIR", host=self.container_name)
         self.container = _lxc.Container(self.container_name)
         if self.container.state == "STOPPED":
@@ -118,7 +120,7 @@ class Connection(ConnectionBase):
         super(Connection, self).exec_command(cmd, in_data=in_data, sudoable=sudoable)
 
         # python2-lxc needs bytes. python3-lxc needs text.
-        executable = to_native(self._play_context.executable, errors='surrogate_or_strict')
+        executable = to_native(self.get_option('executable'), errors='surrogate_or_strict')
         local_cmd = [executable, '-c', to_native(cmd, errors='surrogate_or_strict')]
 
         read_stdout, write_stdout = None, None
diff --git a/tests/unit/plugins/connection/test_lxc.py b/tests/unit/plugins/connection/test_lxc.py
index 8733a92e09..fe2253df62 100644
--- a/tests/unit/plugins/connection/test_lxc.py
+++ b/tests/unit/plugins/connection/test_lxc.py
@@ -6,20 +6,81 @@
 from __future__ import (absolute_import, division, print_function)
 __metaclass__ = type
 
+import pytest
+import sys
+
 from io import StringIO
 
-from ansible_collections.community.general.tests.unit.compat import unittest
-from ansible_collections.community.general.plugins.connection import lxc
+from ansible.errors import AnsibleError
 from ansible.playbook.play_context import PlayContext
+from ansible.plugins.loader import connection_loader
+from ansible_collections.community.general.tests.unit.compat import mock
 
 
-class TestLXCConnectionClass(unittest.TestCase):
+@pytest.fixture(autouse=True)
+def lxc(request):
+    """Fixture to import/load the lxc plugin module.
 
-    def test_lxc_connection_module(self):
+    The fixture parameter is used to determine the presence of liblxc.
+    When true (default), a mocked liblxc module is injected. If False,
+    no liblxc will be present.
+    """
+    liblxc_present = getattr(request, 'param', True)
+
+    class ContainerMock(mock.MagicMock):
+        def __init__(self, name):
+            super(ContainerMock, self).__init__()
+            self.name = name
+            self.state = 'STARTED'
+
+    liblxc_module_mock = mock.MagicMock()
+    liblxc_module_mock.Container = ContainerMock
+
+    with mock.patch.dict('sys.modules'):
+        if liblxc_present:
+            sys.modules['lxc'] = liblxc_module_mock
+        elif 'lxc' in sys.modules:
+            del sys.modules['lxc']
+
+        from ansible_collections.community.general.plugins.connection import lxc as lxc_plugin_module
+
+        assert lxc_plugin_module.HAS_LIBLXC == liblxc_present
+        assert bool(getattr(lxc_plugin_module, '_lxc', None)) == liblxc_present
+
+        yield lxc_plugin_module
+
+
+class TestLXCConnectionClass():
+
+    @pytest.mark.parametrize('lxc', [True, False], indirect=True)
+    def test_lxc_connection_module(self, lxc):
+        """Test that a connection can be created with the plugin."""
         play_context = PlayContext()
-        play_context.prompt = (
-            '[sudo via ansible, key=ouzmdnewuhucvuaabtjmweasarviygqq] password: '
-        )
         in_stream = StringIO()
 
-        self.assertIsInstance(lxc.Connection(play_context, in_stream), lxc.Connection)
+        conn = connection_loader.get('lxc', play_context, in_stream)
+        assert conn
+        assert isinstance(conn, lxc.Connection)
+
+    @pytest.mark.parametrize('lxc', [False], indirect=True)
+    def test_lxc_connection_liblxc_error(self, lxc):
+        """Test that on connect an error is thrown if liblxc is not present."""
+        play_context = PlayContext()
+        in_stream = StringIO()
+        conn = connection_loader.get('lxc', play_context, in_stream)
+
+        with pytest.raises(AnsibleError, match='lxc python bindings are not installed'):
+            conn._connect()
+
+    def test_remote_addr_option(self):
+        """Test that the remote_addr option is used"""
+        play_context = PlayContext()
+        in_stream = StringIO()
+        conn = connection_loader.get('lxc', play_context, in_stream)
+
+        container_name = 'my-container'
+        conn.set_option('remote_addr', container_name)
+        assert conn.get_option('remote_addr') == container_name
+
+        conn._connect()
+        assert conn.container_name == container_name