diff --git a/CHANGES b/CHANGES
index ddc433678..3dc6bfc9d 100644
--- a/CHANGES
+++ b/CHANGES
@@ -60,6 +60,8 @@ Features added
 * #8924: autodoc: Support ``bound`` argument for TypeVar
 * #4826: py domain: Add ``:canonical:`` option to python directives to describe
   the location where the object is defined
+* #7199: py domain: Add :confval:`python_use_unqualified_type_names` to suppress
+  the module name of the python reference if it can be resolved (experimental)
 * #7784: i18n: The alt text for image is translated by default (without
   :confval:`gettext_additional_targets` setting)
 * #2018: html: :confval:`html_favicon` and :confval:`html_logo` now accept URL
diff --git a/doc/usage/configuration.rst b/doc/usage/configuration.rst
index 23db18fed..989ce8737 100644
--- a/doc/usage/configuration.rst
+++ b/doc/usage/configuration.rst
@@ -2714,6 +2714,17 @@ Options for the C++ domain
 
    .. versionadded:: 1.5
 
+Options for the Python domain
+-----------------------------
+
+.. confval:: python_use_unqualified_type_names
+
+   If true, suppress the module name of the python reference if it can be
+   resolved.  The default is ``False``.
+
+   .. versionadded:: 4.0
+
+   .. note:: This configuration is still in experimental
 
 Example of configuration file
 =============================
diff --git a/sphinx/domains/python.py b/sphinx/domains/python.py
index 5e430a1d7..40a67f82c 100644
--- a/sphinx/domains/python.py
+++ b/sphinx/domains/python.py
@@ -22,7 +22,7 @@ from docutils.nodes import Element, Node
 from docutils.parsers.rst import directives
 
 from sphinx import addnodes
-from sphinx.addnodes import desc_signature, pending_xref
+from sphinx.addnodes import desc_signature, pending_xref, pending_xref_condition
 from sphinx.application import Sphinx
 from sphinx.builders import Builder
 from sphinx.deprecation import RemovedInSphinx50Warning
@@ -37,7 +37,7 @@ from sphinx.util import logging
 from sphinx.util.docfields import Field, GroupedField, TypedField
 from sphinx.util.docutils import SphinxDirective
 from sphinx.util.inspect import signature_from_str
-from sphinx.util.nodes import make_id, make_refnode
+from sphinx.util.nodes import find_pending_xref_condition, make_id, make_refnode
 from sphinx.util.typing import TextlikeNode
 
 logger = logging.getLogger(__name__)
@@ -92,7 +92,17 @@ def type_to_xref(text: str, env: BuildEnvironment = None) -> addnodes.pending_xr
     else:
         kwargs = {}
 
-    return pending_xref('', nodes.Text(text),
+    if env.config.python_use_unqualified_type_names:
+        # Note: It would be better to use qualname to describe the object to support support
+        # nested classes.  But python domain can't access the real python object because this
+        # module should work not-dynamically.
+        shortname = text.split('.')[-1]
+        contnodes = [pending_xref_condition('', shortname, condition='resolved'),
+                     pending_xref_condition('', text, condition='*')]  # type: List[Node]
+    else:
+        contnodes = [nodes.Text(text)]
+
+    return pending_xref('', *contnodes,
                         refdomain='py', reftype=reftype, reftarget=text, **kwargs)
 
 
@@ -1209,7 +1219,15 @@ class PythonDomain(Domain):
         if obj[2] == 'module':
             return self._make_module_refnode(builder, fromdocname, name, contnode)
         else:
-            return make_refnode(builder, fromdocname, obj[0], obj[1], contnode, name)
+            # determine the content of the reference by conditions
+            content = find_pending_xref_condition(node, 'resolved')
+            if content:
+                children = content.children
+            else:
+                # if not found, use contnode
+                children = [contnode]
+
+            return make_refnode(builder, fromdocname, obj[0], obj[1], children, name)
 
     def resolve_any_xref(self, env: BuildEnvironment, fromdocname: str, builder: Builder,
                          target: str, node: pending_xref, contnode: Element
@@ -1226,9 +1244,17 @@ class PythonDomain(Domain):
                                 self._make_module_refnode(builder, fromdocname,
                                                           name, contnode)))
             else:
+                # determine the content of the reference by conditions
+                content = find_pending_xref_condition(node, 'resolved')
+                if content:
+                    children = content.children
+                else:
+                    # if not found, use contnode
+                    children = [contnode]
+
                 results.append(('py:' + self.role_for_objtype(obj[2]),
                                 make_refnode(builder, fromdocname, obj[0], obj[1],
-                                             contnode, name)))
+                                             children, name)))
         return results
 
     def _make_module_refnode(self, builder: Builder, fromdocname: str, name: str,
@@ -1295,6 +1321,7 @@ def setup(app: Sphinx) -> Dict[str, Any]:
     app.setup_extension('sphinx.directives')
 
     app.add_domain(PythonDomain)
+    app.add_config_value('python_use_unqualified_type_names', False, 'env')
     app.connect('object-description-transform', filter_meta_fields)
     app.connect('missing-reference', builtin_resolver, priority=900)
 
diff --git a/sphinx/util/nodes.py b/sphinx/util/nodes.py
index 22cc9d4c0..c7619a836 100644
--- a/sphinx/util/nodes.py
+++ b/sphinx/util/nodes.py
@@ -10,7 +10,7 @@
 
 import re
 import unicodedata
-from typing import TYPE_CHECKING, Any, Callable, Iterable, List, Set, Tuple, Type, cast
+from typing import TYPE_CHECKING, Any, Callable, Iterable, List, Set, Tuple, Type, Union, cast
 
 from docutils import nodes
 from docutils.nodes import Element, Node
@@ -542,7 +542,7 @@ def find_pending_xref_condition(node: addnodes.pending_xref, condition: str) ->
 
 
 def make_refnode(builder: "Builder", fromdocname: str, todocname: str, targetid: str,
-                 child: Node, title: str = None) -> nodes.reference:
+                 child: Union[Node, List[Node]], title: str = None) -> nodes.reference:
     """Shortcut to create a reference node."""
     node = nodes.reference('', '', internal=True)
     if fromdocname == todocname and targetid:
@@ -555,7 +555,7 @@ def make_refnode(builder: "Builder", fromdocname: str, todocname: str, targetid:
             node['refuri'] = builder.get_relative_uri(fromdocname, todocname)
     if title:
         node['reftitle'] = title
-    node.append(child)
+    node += child
     return node
 
 
diff --git a/tests/roots/test-domain-py-python_use_unqualified_type_names/conf.py b/tests/roots/test-domain-py-python_use_unqualified_type_names/conf.py
new file mode 100644
index 000000000..c81bfe4c7
--- /dev/null
+++ b/tests/roots/test-domain-py-python_use_unqualified_type_names/conf.py
@@ -0,0 +1 @@
+python_use_unqualified_type_names = True
diff --git a/tests/roots/test-domain-py-python_use_unqualified_type_names/index.rst b/tests/roots/test-domain-py-python_use_unqualified_type_names/index.rst
new file mode 100644
index 000000000..599206d8c
--- /dev/null
+++ b/tests/roots/test-domain-py-python_use_unqualified_type_names/index.rst
@@ -0,0 +1,8 @@
+domain-py-smart_reference
+=========================
+
+.. py:class:: Name
+   :module: foo
+
+
+.. py:function:: hello(name: foo.Name, age: foo.Age)
diff --git a/tests/test_domain_py.py b/tests/test_domain_py.py
index 448c2c954..03e865e84 100644
--- a/tests/test_domain_py.py
+++ b/tests/test_domain_py.py
@@ -999,6 +999,25 @@ def test_noindexentry(app):
     assert_node(doctree[2], addnodes.index, entries=[])
 
 
+@pytest.mark.sphinx('html', testroot='domain-py-python_use_unqualified_type_names')
+def test_python_python_use_unqualified_type_names(app, status, warning):
+    app.build()
+    content = (app.outdir / 'index.html').read_text()
+    assert ('<span class="n"><a class="reference internal" href="#foo.Name" title="foo.Name">'
+            '<span class="pre">Name</span></a></span>' in content)
+    assert '<span class="n"><span class="pre">foo.Age</span></span>' in content
+
+
+@pytest.mark.sphinx('html', testroot='domain-py-python_use_unqualified_type_names',
+                    confoverrides={'python_use_unqualified_type_names': False})
+def test_python_python_use_unqualified_type_names_disabled(app, status, warning):
+    app.build()
+    content = (app.outdir / 'index.html').read_text()
+    assert ('<span class="n"><a class="reference internal" href="#foo.Name" title="foo.Name">'
+            '<span class="pre">foo.Name</span></a></span>' in content)
+    assert '<span class="n"><span class="pre">foo.Age</span></span>' in content
+
+
 @pytest.mark.sphinx('dummy', testroot='domain-py-xref-warning')
 def test_warn_missing_reference(app, status, warning):
     app.build()