diff --git a/.github/workflows/ci_vscode.yml b/.github/workflows/ci_vscode.yml
index 306be3350f97a..77f9311baf586 100644
--- a/.github/workflows/ci_vscode.yml
+++ b/.github/workflows/ci_vscode.yml
@@ -49,7 +49,7 @@ jobs:
 
       - name: Build Language Server
         working-directory: editors/vscode
-        run: pnpm run server:build:release
+        run: pnpm run server:build:debug
 
       - name: Compile VSCode
         working-directory: editors/vscode
diff --git a/.vscode/launch.json b/.vscode/launch.json
index 7c101313af8aa..7d5f4ff932913 100644
--- a/.vscode/launch.json
+++ b/.vscode/launch.json
@@ -11,7 +11,7 @@
       "sourceMaps": true,
       "outFiles": ["${workspaceFolder}/editors/vscode/dist/*.js"],
       "env": {
-        "SERVER_PATH_DEV": "${workspaceRoot}/target/debug/oxc_language_server",
+        "SERVER_PATH_DEV": "${workspaceRoot}/editors/vscode/target/debug/oxc_language_server",
         "RUST_LOG": "debug"
       }
     },
diff --git a/editors/vscode/.vscode-test.mjs b/editors/vscode/.vscode-test.mjs
index 2ac3254339846..914f308809eaa 100644
--- a/editors/vscode/.vscode-test.mjs
+++ b/editors/vscode/.vscode-test.mjs
@@ -1,11 +1,23 @@
 import { defineConfig } from '@vscode/test-cli';
 import { existsSync, mkdirSync } from 'node:fs';
+import path from 'node:path';
 
 if (!existsSync('./test_workspace')) {
   mkdirSync('./test_workspace');
 }
 
+const ext = process.platform === 'win32' ? '.exe' : '';
+
 export default defineConfig({
-  files: 'out/**/*.spec.js',
-  workspaceFolder: './test_workspace',
+  tests: [{
+    files: 'out/**/*.spec.js',
+    workspaceFolder: './test_workspace',
+    launchArgs: [
+      // This disables all extensions except the one being testing
+      '--disable-extensions',
+    ],
+    env: {
+      SERVER_PATH_DEV: path.resolve(import.meta.dirname, `./target/debug/oxc_language_server${ext}`),
+    },
+  }],
 });
diff --git a/editors/vscode/README.md b/editors/vscode/README.md
index 021d3d4db02c5..a26bd79f8c49a 100644
--- a/editors/vscode/README.md
+++ b/editors/vscode/README.md
@@ -19,3 +19,8 @@ This is the linter for Oxc. The currently supported features are listed below.
 - Command to fix all auto-fixable content within the current text editor.
 - Support for `source.fixAll.oxc` as a code action provider. Configure this in your settings `editor.codeActionsOnSave`
   to automatically apply fixes when saving the file.
+
+## Testing
+
+Run `pnpm server:build:debug` to build the language server.
+After that, you can test the vscode plugin + E2E Tests with `pnm test`
diff --git a/editors/vscode/client/extension.spec.ts b/editors/vscode/client/extension.spec.ts
index 26a2dc59b41b2..5be13f4352ec5 100644
--- a/editors/vscode/client/extension.spec.ts
+++ b/editors/vscode/client/extension.spec.ts
@@ -16,7 +16,9 @@ suite('commands', () => {
 
   suiteTeardown(async () => {
     const edit = new WorkspaceEdit();
-    edit.deleteFile(fileUri);
+    edit.deleteFile(fileUri, {
+      ignoreIfNotExists: true,
+    });
     await workspace.applyEdit(edit);
   });
 
diff --git a/editors/vscode/package.json b/editors/vscode/package.json
index 65817da17d1fc..1bc2452283164 100644
--- a/editors/vscode/package.json
+++ b/editors/vscode/package.json
@@ -143,7 +143,7 @@
     "watch": "pnpm run compile --watch",
     "package": "vsce package --no-dependencies -o oxc_language_server.vsix",
     "install-extension": "code --install-extension oxc_language_server.vsix --force",
-    "server:build:debug": "cargo build -p oxc_language_server",
+    "server:build:debug": "cross-env CARGO_TARGET_DIR=./target cargo build -p oxc_language_server",
     "server:build:release": "cross-env CARGO_TARGET_DIR=./target cargo build -p oxc_language_server --release",
     "lint": "npx oxlint --config=oxlint.json --tsconfig=tsconfig.json",
     "test": "esbuild client/*.spec.ts --bundle --outdir=out --external:vscode --format=cjs --platform=node --target=node16 --minify --sourcemap && vscode-test",