diff --git a/pythonFiles/testing_tools/unittest_discovery.py b/pythonFiles/testing_tools/unittest_discovery.py
index 2988092c387c..bebcf47cffd3 100644
--- a/pythonFiles/testing_tools/unittest_discovery.py
+++ b/pythonFiles/testing_tools/unittest_discovery.py
@@ -4,11 +4,27 @@
 import traceback
 import unittest
 
+import os.path
+
+sys.path.insert(
+    1,
+    os.path.dirname(  # pythonFiles
+        os.path.dirname(  # pythonFiles/testing_tools
+            os.path.abspath(__file__)  # this file
+        )
+    ),
+)
+
+from unittestadapter.django_test_init import setup_django_test_env
+
 start_dir = sys.argv[1]
 pattern = sys.argv[2]
 top_level_dir = sys.argv[3] if len(sys.argv) >= 4 else None
 sys.path.insert(0, os.getcwd())
 
+# Setup django env to prevent missing django tests
+setup_django_test_env(start_dir)
+
 
 def get_sourceline(obj):
     try:
diff --git a/pythonFiles/unittestadapter/discovery.py b/pythonFiles/unittestadapter/discovery.py
index cbad40ad1838..37ed3cb45dc9 100644
--- a/pythonFiles/unittestadapter/discovery.py
+++ b/pythonFiles/unittestadapter/discovery.py
@@ -18,6 +18,7 @@
 
 # If I use from utils then there will be an import error in test_discovery.py.
 from unittestadapter.utils import TestNode, build_test_tree, parse_unittest_args
+from unittestadapter.django_test_init import setup_django_test_env
 
 from typing_extensions import NotRequired, TypedDict, Literal
 
@@ -113,6 +114,9 @@ def discover_tests(
 
     start_dir, pattern, top_level_dir = parse_unittest_args(argv[index + 1 :])
 
+    # Setup django env to prevent missing django tests
+    setup_django_test_env(start_dir)
+
     # Perform test discovery.
     port, uuid = parse_discovery_cli_args(argv[:index])
     payload = discover_tests(start_dir, pattern, top_level_dir, uuid)
diff --git a/pythonFiles/unittestadapter/django_test_init.py b/pythonFiles/unittestadapter/django_test_init.py
new file mode 100644
index 000000000000..a7bc834f123c
--- /dev/null
+++ b/pythonFiles/unittestadapter/django_test_init.py
@@ -0,0 +1,55 @@
+"""
+This module sets up a Django environment to run Django tests.
+"""
+
+import os
+import re
+import sys
+
+
+def setup_django_test_env(workspace_directory="."):
+    """Configures the Django environment for running Django tests.
+
+    If Django is not installed, workspace_directory is not in sys.path or
+    manage.py can not be found inside the given workspace_directory, the function fails quietly.
+
+    Args:
+        workspace_directory (str): The current workspace directory that is expected to contain manage.py module
+
+    Returns:
+        None
+    """
+
+    # To avoid false positive ModuleNotFoundError from django.setup() due to missing current workspace in sys.path
+    sys.path.insert(0, os.getcwd())
+
+    try:
+        import django
+    except ImportError:
+        return
+
+    manage_py_module = os.path.join(workspace_directory, "manage.py")
+    if not os.path.exists(manage_py_module):
+        return
+
+    dj_settings_module = None
+
+    with open(manage_py_module, "r") as manage_py:
+        pattern = r"^os\.environ\.setdefault\((\'|\")DJANGO_SETTINGS_MODULE(\'|\"), (\'|\")(?P<settings_path>[\w.]+)(\'|\")\)$"
+        for line in manage_py.readlines():
+            match_result = re.match(pattern, line.strip())
+            if match_result is not None:
+                dj_settings_module = match_result.groupdict().get("settings_path", None)
+                break
+
+    if dj_settings_module is None:
+        return
+
+    os.environ.setdefault("DJANGO_SETTINGS_MODULE", dj_settings_module)
+
+    try:
+        django.setup()
+    except ModuleNotFoundError:
+        return
+
+    return
diff --git a/pythonFiles/unittestadapter/execution.py b/pythonFiles/unittestadapter/execution.py
index f239f81c2d87..13c2080196a2 100644
--- a/pythonFiles/unittestadapter/execution.py
+++ b/pythonFiles/unittestadapter/execution.py
@@ -21,6 +21,7 @@
 
 from testing_tools import process_json_util, socket_manager
 from unittestadapter.utils import parse_unittest_args
+from unittestadapter.django_test_init import setup_django_test_env
 
 DEFAULT_PORT = "45454"
 
@@ -259,6 +260,9 @@ def send_run_data(raw_data, port, uuid):
 
     start_dir, pattern, top_level_dir = parse_unittest_args(argv[index + 1 :])
 
+    # Setup django env to prevent missing django tests
+    setup_django_test_env(start_dir)
+
     run_test_ids_port = os.environ.get("RUN_TEST_IDS_PORT")
     run_test_ids_port_int = (
         int(run_test_ids_port) if run_test_ids_port is not None else 0
diff --git a/pythonFiles/visualstudio_py_testlauncher.py b/pythonFiles/visualstudio_py_testlauncher.py
index 0b0ef3242f65..411a082d1ff8 100644
--- a/pythonFiles/visualstudio_py_testlauncher.py
+++ b/pythonFiles/visualstudio_py_testlauncher.py
@@ -25,6 +25,10 @@
 import traceback
 import unittest
 
+sys.path.insert(1, os.path.abspath(__file__))  # this file
+
+from unittestadapter.django_test_init import setup_django_test_env
+
 try:
     import thread
 except:
@@ -276,6 +280,9 @@ def main():
     )
     (opts, _) = parser.parse_args()
 
+    # Setup django env to prevent missing django tests
+    setup_django_test_env(getattr(opts, "us", ".") or ".")
+
     sys.path[0] = os.getcwd()
     if opts.result_port:
         try: