diff --git a/.vscode/launch.json b/.vscode/launch.json
index 60b6974c6a70..9e7fd55cf293 100644
--- a/.vscode/launch.json
+++ b/.vscode/launch.json
@@ -9,6 +9,7 @@
       "request": "launch",
       "name": "Run Mocha tests",
       "program": "${workspaceRoot}/packages/build/node_modules/mocha/bin/_mocha",
+      "runtimeArgs": ["-r", "${workspaceRoot}/packages/build/node_modules/source-map-support/register"],
       "cwd": "${workspaceRoot}",
       "args": [
         "--config",
@@ -18,6 +19,25 @@
         "0"
       ]
     },
+    {
+      "type": "node",
+      "request": "launch",
+      "name": "Debug Current Test File",
+      "program": "${workspaceRoot}/bin/mocha-current-file",
+      "runtimeArgs": ["-r", "${workspaceRoot}/packages/build/node_modules/source-map-support/register"],
+      "cwd": "${workspaceRoot}",
+      "args": [
+        "--config",
+        "${workspaceRoot}/packages/build/config/.mocharc.json",
+        "-t",
+        "0",
+        "${file}"
+      ],
+      // This ensures vscode won't set breakpoints until after sourcemaps
+      // have been loaded for the file.  Important when your tests are compiled
+      // from typescript.
+      "disableOptimisticBPs": true,
+    },
     {
       "type": "node",
       "request": "attach",
diff --git a/bin/mocha-current-file.js b/bin/mocha-current-file.js
new file mode 100644
index 000000000000..5860d8403711
--- /dev/null
+++ b/bin/mocha-current-file.js
@@ -0,0 +1,80 @@
+#!/usr/bin/env node
+
+// Copyright IBM Corp. 2020. All Rights Reserved.
+// Node module: @loopback-next
+// This file is licensed under the MIT License.
+// License text available at https://opensource.org/licenses/MIT
+
+/*
+================================================================================
+This is used in the launch.json to enable you to debug a test file written in
+typescript.  This function attempts to convert the passed typescript file to
+the best-guess output javascript file.
+
+It walks up the filesystem from the current file, stops at package.json, and
+looks in `dist`
+
+Ideally, we could somehow use the typescript compiler and tsconfig.json to get
+the explicit output file instead of trying to guess it, but there might be
+overhead.
+
+Ex:
+```jsonc
+{
+  "version": "0.2.0",
+  "configurations": [
+    {
+      "type": "node",
+      "request": "launch",
+      "name": "Debug Current Test File",
+      "program": "${workspaceRoot}/bin/mocha-current-file",
+      "runtimeArgs": ["-r", "${workspaceRoot}/packages/build/node_modules/source-map-support/register"],
+      "cwd": "${workspaceRoot}",
+      "autoAttachChildProcesses": true,
+      "args": [
+        "--config",
+        "${workspaceRoot}/packages/build/config/.mocharc.json",
+        "-t",
+        "0",
+        "${file}"
+      ],
+      "disableOptimisticBPs": true
+    }
+  ]
+}
+```
+================================================================================
+*/
+
+'use strict';
+const path = require('path');
+const fs = require('fs');
+
+function findDistFile(filename) {
+  const absolutePath = path.resolve(filename);
+  const systemRoot = path.parse(absolutePath).root;
+  let currentDir = path.dirname(absolutePath);
+
+  let isPackageRoot = fs.existsSync(path.resolve(currentDir, 'package.json'));
+  while (!isPackageRoot) {
+    if (path.dirname(currentDir) === systemRoot) {
+      throw new Error(
+        `Could not find a package.json file in the path heirarchy of ${absolutePath}`,
+      );
+    }
+    currentDir = path.join(currentDir, '..');
+    isPackageRoot = fs.existsSync(path.resolve(currentDir, 'package.json'));
+  }
+  const base = path.resolve(currentDir);
+  const relative = path.relative(currentDir, absolutePath);
+  const resultPath = relative.replace(/^src/, 'dist').replace(/\.ts$/, '.js');
+  return path.resolve(base, resultPath);
+}
+
+const newFile = findDistFile(process.argv.splice(-1)[0]);
+
+if (newFile) {
+  require('../packages/build/node_modules/mocha/lib/cli').main(
+    [...process.argv, newFile].slice(2),
+  );
+}