diff --git a/src/QsCompiler/LanguageServer/LanguageServer.cs b/src/QsCompiler/LanguageServer/LanguageServer.cs
index 2bb16ce941..1403861341 100644
--- a/src/QsCompiler/LanguageServer/LanguageServer.cs
+++ b/src/QsCompiler/LanguageServer/LanguageServer.cs
@@ -4,6 +4,7 @@
 using System;
 using System.Collections.Generic;
 using System.Collections.Immutable;
+using System.Diagnostics;
 using System.IO;
 using System.Linq;
 using System.Reactive.Linq;
@@ -123,9 +124,45 @@ public void Dispose()
         internal Task NotifyClientAsync(string method, object args) =>
             this.rpc.NotifyWithParameterObjectAsync(method, args);  // no need to wait for completion
 
+        internal Task<T> InvokeAsync<T>(string method, object args) =>
+            this.rpc.InvokeWithParameterObjectAsync<T>(method, args);
+
         internal Task PublishDiagnosticsAsync(PublishDiagnosticParams diagnostics) =>
             this.NotifyClientAsync(Methods.TextDocumentPublishDiagnosticsName, diagnostics);
 
+        internal async void CheckDotNetSdkVersion()
+        {
+            var isDotNet31Installed = DotNetSdkHelper.IsDotNet31Installed();
+            if (isDotNet31Installed == null)
+            {
+                this.LogToWindow("Unable to detect .NET SDK versions", MessageType.Error);
+            }
+            else
+            {
+                if (isDotNet31Installed != true)
+                {
+                    const string dotnet31Url = "https://dotnet.microsoft.com/download/dotnet-core/3.1";
+                    this.LogToWindow($".NET Core SDK 3.1 not found. Quantum Development Kit Extension requires .NET Core SDK 3.1 to work properly ({dotnet31Url}).", MessageType.Error);
+                    var downloadAction = new MessageActionItem { Title = "Download" };
+                    var cancelAction = new MessageActionItem { Title = "No, thanks" };
+                    var selectedAction = await this.ShowDialogInWindowAsync(
+                        "Quantum Development Kit Extension requires .NET Core SDK 3.1 to work properly. Please install .NET Core SDK 3.1 and restart Visual Studio.",
+                        MessageType.Error,
+                        new[] { downloadAction, cancelAction });
+                    if (selectedAction != null
+                        && selectedAction.Title == downloadAction.Title)
+                    {
+                        Process.Start(new ProcessStartInfo
+                        {
+                            FileName = dotnet31Url,
+                            UseShellExecute = true,
+                            CreateNoWindow = true,
+                        });
+                    }
+                }
+            }
+        }
+
         /// <summary>
         /// does not actually do anything unless the corresponding flag is defined upon compilation
         /// </summary>
diff --git a/src/QsCompiler/LanguageServer/LanguageServer.csproj b/src/QsCompiler/LanguageServer/LanguageServer.csproj
index ade2b39519..5e0c4656cf 100644
--- a/src/QsCompiler/LanguageServer/LanguageServer.csproj
+++ b/src/QsCompiler/LanguageServer/LanguageServer.csproj
@@ -33,4 +33,9 @@
   <ItemGroup>
     <Compile Include="..\..\Common\DelaySign.cs" Link="Properties\DelaySign.cs" />
   </ItemGroup>
+  <ItemGroup>
+    <None Include="global.language-server.json" Link="global.json">
+      <CopyToOutputDirectory>PreserveNewest</CopyToOutputDirectory>
+    </None>
+  </ItemGroup>
 </Project>
diff --git a/src/QsCompiler/LanguageServer/Program.cs b/src/QsCompiler/LanguageServer/Program.cs
index 8e9c64dcfa..5115feddd6 100644
--- a/src/QsCompiler/LanguageServer/Program.cs
+++ b/src/QsCompiler/LanguageServer/Program.cs
@@ -83,6 +83,11 @@ private static int LogAndExit(ReturnCode code, string? logFile = null, string? m
 
         public static int Main(string[] args)
         {
+            // We need to set the current directory to the same directory of
+            // the LanguageServer executable so that it will pick the global.json file
+            // and force the MSBuildLocator to use .NET Core SDK 3.1
+            Directory.SetCurrentDirectory(AppDomain.CurrentDomain.BaseDirectory);
+
             var parser = new Parser(parser => parser.HelpWriter = null); // we want our own custom format for the version info
             var options = parser.ParseArguments<Options>(args);
             return options.MapResult(
@@ -120,8 +125,11 @@ private static int Run(Options options)
             }
             catch (Exception ex)
             {
+                // Don't exit here, since exiting without establishing a connection will result in a cryptic failure of the extension.
+                // Instead, we proceed to create a server instance and establish the connection.
+                // Any errors can then be properly processed via the standard server-client communication as needed.
                 Log("[ERROR] MsBuildLocator could not register defaults.", options.LogFile);
-                return LogAndExit(ReturnCode.MSBUILD_UNINITIALIZED, options.LogFile, ex.ToString());
+                Log(ex, options.LogFile);
             }
 
             QsLanguageServer server;
@@ -140,6 +148,7 @@ private static int Run(Options options)
             Log("Listening...", options.LogFile);
             try
             {
+                server.CheckDotNetSdkVersion();
                 server.WaitForShutdown();
             }
             catch (Exception ex)
diff --git a/src/QsCompiler/LanguageServer/Utils.cs b/src/QsCompiler/LanguageServer/Utils.cs
index fe43424be8..105c4f447a 100644
--- a/src/QsCompiler/LanguageServer/Utils.cs
+++ b/src/QsCompiler/LanguageServer/Utils.cs
@@ -4,6 +4,9 @@
 using System;
 using System.Collections.Generic;
 using System.Collections.Immutable;
+using System.Diagnostics;
+using System.Text.RegularExpressions;
+using System.Threading.Tasks;
 using Microsoft.Build.Framework;
 using Microsoft.Build.Utilities;
 using Microsoft.Quantum.QsCompiler;
@@ -34,6 +37,21 @@ internal static void ShowInWindow(this QsLanguageServer server, string text, Mes
             _ = server.NotifyClientAsync(Methods.WindowShowMessageName, message);
         }
 
+        /// <summary>
+        /// Shows a dialog window with options (actions) to the user, and returns the selected option (action).
+        /// </summary>
+        internal static async Task<MessageActionItem> ShowDialogInWindowAsync(this QsLanguageServer server, string text, MessageType severity, MessageActionItem[] actionItems)
+        {
+            var message =
+                new ShowMessageRequestParams()
+                {
+                    Message = text,
+                    MessageType = severity,
+                    Actions = actionItems
+                };
+            return await server.InvokeAsync<MessageActionItem>(Methods.WindowShowMessageRequestName, message);
+        }
+
         /// <summary>
         /// Logs the given text in the editor.
         /// </summary>
@@ -124,4 +142,26 @@ public override void Initialize(IEventSource eventSource)
             }
         }
     }
+
+    internal static class DotNetSdkHelper
+    {
+        private static readonly Regex DotNet31Regex = new Regex(@"^3\.1\.\d+", RegexOptions.Multiline | RegexOptions.Compiled);
+
+        public static bool? IsDotNet31Installed()
+        {
+            var process = Process.Start(new ProcessStartInfo
+            {
+                FileName = "dotnet",
+                Arguments = "--list-sdks",
+                RedirectStandardOutput = true,
+            });
+            if (process?.WaitForExit(3000) != true || process.ExitCode != 0)
+            {
+                return null;
+            }
+
+            var sdks = process.StandardOutput.ReadToEnd();
+            return DotNet31Regex.IsMatch(sdks);
+        }
+    }
 }
diff --git a/src/QsCompiler/LanguageServer/global.language-server.json b/src/QsCompiler/LanguageServer/global.language-server.json
new file mode 100644
index 0000000000..0b2cf8aa3c
--- /dev/null
+++ b/src/QsCompiler/LanguageServer/global.language-server.json
@@ -0,0 +1,6 @@
+{
+  "sdk": {
+    "version": "3.1.100",
+    "rollForward": "latestFeature"
+  }
+}