diff --git a/completion/classes/api.php b/completion/classes/api.php
index 6a1bc31be9a..d4c83a238ce 100644
--- a/completion/classes/api.php
+++ b/completion/classes/api.php
@@ -152,7 +152,8 @@ class api {
                        AND (
                             mc.completionstate = :completionstate
                             OR (cm.completionpassgrade = 1 AND mc.completionstate = :completionstatepass1)
-                            OR (cm.completionpassgrade = 0 AND (mc.completionstate = :completionstatepass2 OR mc.completionstate = :completionstatefail))
+                            OR (cm.completionpassgrade = 0 AND (mc.completionstate = :completionstatepass2
+                                                                OR mc.completionstate = :completionstatefail))
                             )";
 
         $params = [
diff --git a/completion/tests/api_test.php b/completion/tests/api_test.php
index a18f3706c5e..4875a69f367 100644
--- a/completion/tests/api_test.php
+++ b/completion/tests/api_test.php
@@ -287,4 +287,101 @@ class api_test extends \advanced_testcase {
         $this->assertEquals($student1->id, reset($actual)->userid);
         $this->assertEquals($student2->id, end($actual)->userid);
     }
+
+    /**
+     * Test for mark_course_completions_activity_criteria() with different completionpassgrade settings.
+     * @covers ::mark_course_completions_activity_criteria
+     */
+    public function test_mark_course_completions_activity_criteria_completion_states() {
+        global $DB, $CFG;
+        require_once($CFG->dirroot . '/completion/criteria/completion_criteria_activity.php');
+        $this->resetAfterTest(true);
+
+        $courses[] = $this->getDataGenerator()->create_course(['shortname' => 'completionpassgradenotset',
+            'enablecompletion' => 1]);
+        $courses[] = $this->getDataGenerator()->create_course(['shortname' => 'completionpassgradeset',
+            'enablecompletion' => 1]);
+
+        $student1 = $this->getDataGenerator()->create_user();
+        $student2 = $this->getDataGenerator()->create_user();
+
+        $teacher = $this->getDataGenerator()->create_user();
+        $studentrole = $DB->get_record('role', array('shortname' => 'student'));
+        $teacherrole = $DB->get_record('role', array('shortname' => 'editingteacher'));
+
+        foreach ($courses as $course) {
+            $this->getDataGenerator()->enrol_user($teacher->id, $course->id, $teacherrole->id);
+            $this->getDataGenerator()->enrol_user($student1->id, $course->id, $studentrole->id);
+            $this->getDataGenerator()->enrol_user($student2->id, $course->id, $studentrole->id);
+
+            $completioncriteria = [
+                'completionusegrade' => 1,
+                'gradepass' => 50
+            ];
+
+            if ($course->shortname == 'completionpassgradeset') {
+                $completioncriteria['completionpassgrade'] = 1;
+            }
+
+            /** @var \mod_assign_generator $assigngenerator */
+            $assigngenerator = $this->getDataGenerator()->get_plugin_generator('mod_assign');
+            $assign = $assigngenerator->create_instance([
+                    'course' => $course->id,
+                    'completion' => COMPLETION_ENABLED,
+                ] + $completioncriteria);
+
+            $cmassing = get_coursemodule_from_id('assign', $assign->cmid);
+            $cm = get_coursemodule_from_instance('assign', $assign->id);
+            $c = new \completion_info($course);
+
+            // Add activity completion criteria.
+            $criteriadata = new \stdClass();
+            $criteriadata->id = $course->id;
+            $criteriadata->criteria_activity = array();
+            // Some activities.
+            $criteriadata->criteria_activity[$cmassing->id] = 1;
+            $criterion = new \completion_criteria_activity();
+            $criterion->update_config($criteriadata);
+
+            $this->setUser($teacher);
+
+            // Mark user completions.
+            $completion = new \stdClass();
+            $completion->coursemoduleid = $cm->id;
+            $completion->timemodified = time();
+            $completion->viewed = COMPLETION_NOT_VIEWED;
+            $completion->overrideby = null;
+
+            // Student1 achieved passgrade.
+            $completion->id = 0;
+            $completion->completionstate = COMPLETION_COMPLETE_PASS;
+            $completion->userid = $student1->id;
+            $c->internal_set_data($cm, $completion, true);
+
+            // Student2 has not achieved passgrade.
+            $completion->id = 0;
+            $completion->completionstate = COMPLETION_COMPLETE_FAIL;
+            $completion->userid = $student2->id;
+            $c->internal_set_data($cm, $completion, true);
+
+            $actual = $DB->get_records('course_completions', ['course' => $course->id]);
+            $this->assertEmpty($actual);
+
+            // Run course completions cron.
+            $coursecompletionid = \core_completion\api::mark_course_completions_activity_criteria();
+            $this->assertEquals(0, $coursecompletionid);
+            $actual = $DB->get_records('course_completions', ['course' => $course->id]);
+
+            if ($course->shortname == 'completionpassgradeset') {
+                // Only student1 has completed a course.
+                $this->assertEquals(1, count($actual));
+                $this->assertEquals($student1->id, reset($actual)->userid);
+            } else {
+                // Both students completed a course.
+                $this->assertEquals(2, count($actual));
+                $this->assertEquals($student1->id, reset($actual)->userid);
+                $this->assertEquals($student2->id, end($actual)->userid);
+            }
+        }
+    }
 }
diff --git a/completion/tests/behat/course_completion_activity_criteria.feature b/completion/tests/behat/course_completion_activity_criteria.feature
index 3d1b69b5cf7..ea0ee3ce0e3 100644
--- a/completion/tests/behat/course_completion_activity_criteria.feature
+++ b/completion/tests/behat/course_completion_activity_criteria.feature
@@ -46,8 +46,7 @@ Feature: Course completion state should match completion criteria
     And I log out
 
   Scenario: Completion status show match completion criteria.
-    Given I log in as "student1"
-    And I am on "Course 1" course homepage
+    Given I am on the "Course 1" course page logged in as "student1"
     And the "Receive a grade" completion condition of "Test assignment name" is displayed as "todo"
     And the "Receive a passing grade" completion condition of "Test assignment name" is displayed as "todo"
     And I should see "Status: Not yet started" in the "Course completion status" "block"
@@ -66,8 +65,7 @@ Feature: Course completion state should match completion criteria
       | Grade out of 100 | 50.0 |
     And I press "Save changes"
     And I log out
-    When I log in as "student1"
-    And I am on "Course 1" course homepage
+    When I am on the "Course 1" course page logged in as "student1"
     And I should see "Status: Pending" in the "Course completion status" "block"
     And the "Receive a grade" completion condition of "Test assignment name" is displayed as "done"
     And the "Receive a passing grade" completion condition of "Test assignment name" is displayed as "failed"
@@ -81,8 +79,7 @@ Feature: Course completion state should match completion criteria
       | Grade out of 100 | 75.0 |
     And I press "Save changes"
     And I log out
-    And I log in as "student1"
-    And I am on "Course 1" course homepage
+    And I am on the "Course 1" course page logged in as "student1"
     And I should see "Status: Complete" in the "Course completion status" "block"
     And the "Receive a grade" completion condition of "Test assignment name" is displayed as "done"
     And the "Receive a passing grade" completion condition of "Test assignment name" is displayed as "done"