diff --git a/src/Microsoft.TestPlatform.CommunicationUtilities/DataCollectionRequestHandler.cs b/src/Microsoft.TestPlatform.CommunicationUtilities/DataCollectionRequestHandler.cs
index 62b1c088b1..80508b75dd 100644
--- a/src/Microsoft.TestPlatform.CommunicationUtilities/DataCollectionRequestHandler.cs
+++ b/src/Microsoft.TestPlatform.CommunicationUtilities/DataCollectionRequestHandler.cs
@@ -25,7 +25,7 @@ namespace Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.DataCollect
     using Microsoft.VisualStudio.TestPlatform.ObjectModel.DataCollection;
     using Microsoft.VisualStudio.TestPlatform.ObjectModel.Logging;
     using Microsoft.VisualStudio.TestPlatform.Utilities.Helpers;
-
+    using Microsoft.VisualStudio.TestPlatform.Utilities.Helpers.Interfaces;
     using CommunicationUtilitiesResources = Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.Resources.Resources;
     using CoreUtilitiesConstants = Microsoft.VisualStudio.TestPlatform.CoreUtilities.Constants;
 
@@ -48,6 +48,8 @@ internal class DataCollectionRequestHandler : IDataCollectionRequestHandler, IDi
 
         private IDataSerializer dataSerializer;
 
+        private IFileHelper fileHelper;
+
         /// <summary>
         /// Use to cancel data collection test case events monitoring if test run is cancelled.
         /// </summary>
@@ -65,7 +67,8 @@ protected DataCollectionRequestHandler(IMessageSink messageSink)
                 messageSink,
                 DataCollectionManager.Create(messageSink),
                 new DataCollectionTestCaseEventHandler(),
-                JsonDataSerializer.Instance)
+                JsonDataSerializer.Instance,
+                new FileHelper())
         {
             this.messageSink = messageSink;
         }
@@ -88,12 +91,16 @@ protected DataCollectionRequestHandler(IMessageSink messageSink)
         /// <param name="dataSerializer">
         /// Serializer for serialization and deserialization of the messages.
         /// </param>
+        /// <param name="fileHelper">
+        /// File Helper
+        /// </param>
         protected DataCollectionRequestHandler(
             ICommunicationManager communicationManager,
             IMessageSink messageSink,
             IDataCollectionManager dataCollectionManager,
             IDataCollectionTestCaseEventHandler dataCollectionTestCaseEventHandler,
-            IDataSerializer dataSerializer)
+            IDataSerializer dataSerializer,
+            IFileHelper fileHelper)
         {
             this.communicationManager = communicationManager;
             this.messageSink = messageSink;
@@ -101,6 +108,7 @@ protected DataCollectionRequestHandler(
             this.dataSerializer = dataSerializer;
             this.dataCollectionTestCaseEventHandler = dataCollectionTestCaseEventHandler;
             this.cancellationTokenSource = new CancellationTokenSource();
+            this.fileHelper = fileHelper;
         }
 
         /// <summary>
@@ -137,7 +145,8 @@ public static DataCollectionRequestHandler Create(
                             messageSink,
                             DataCollectionManager.Create(messageSink),
                             new DataCollectionTestCaseEventHandler(),
-                            JsonDataSerializer.Instance);
+                            JsonDataSerializer.Instance,
+                            new FileHelper());
                     }
                 }
             }
@@ -228,40 +237,49 @@ public void Close()
         /// <summary>
         /// Update the test adapter paths provided through run settings to be used by the test plugin cache.
         /// </summary>
-        /// <param name="runSettings">
-        /// The run Settings.
+        /// <param name="payload">
+        /// The before test run start payload
         /// </param>
-        private void AddExtensionAssemblies(string runSettings)
+        private void AddExtensionAssemblies(BeforeTestRunStartPayload payload)
         {
             try
             {
-                IEnumerable<string> customTestAdaptersPaths = RunSettingsUtilities.GetTestAdaptersPaths(runSettings);
+                var customTestAdaptersPaths = RunSettingsUtilities.GetTestAdaptersPaths(payload.SettingsXml);
+
+                // In case of dotnet vstest with code coverage, data collector needs to be picked up from publish folder.
+                // Therefore, adding source dll folders to search datacollectors in these.
+                var datacollectorSearchPaths = new HashSet<string>();
+                foreach (var source in payload.Sources)
+                {
+                    datacollectorSearchPaths.Add(Path.GetDirectoryName(source));
+                }
+
                 if (customTestAdaptersPaths != null)
                 {
-                    var fileHelper = new FileHelper();
+                    datacollectorSearchPaths.UnionWith(customTestAdaptersPaths);
+                }
 
-                    List<string> extensionAssemblies = new List<string>();
-                    foreach (var customTestAdaptersPath in customTestAdaptersPaths)
+                List<string> extensionAssemblies = new List<string>();
+                foreach (var datacollectorSearchPath in datacollectorSearchPaths)
+                {
+                    var adapterPath =
+                        Path.GetFullPath(Environment.ExpandEnvironmentVariables(datacollectorSearchPath));
+                    if (!this.fileHelper.DirectoryExists(adapterPath))
                     {
-                        var adapterPath =
-                            Path.GetFullPath(Environment.ExpandEnvironmentVariables(customTestAdaptersPath));
-                        if (!fileHelper.DirectoryExists(adapterPath))
-                        {
-                            EqtTrace.Warning(string.Format("AdapterPath Not Found:", adapterPath));
-                            continue;
-                        }
-
-                        extensionAssemblies.AddRange(
-                            fileHelper.EnumerateFiles(
-                                adapterPath,
-                                SearchOption.AllDirectories,
-                                TestPlatformConstants.DataCollectorEndsWithPattern));
+                        EqtTrace.Warning(string.Format("AdapterPath Not Found:", adapterPath));
+                        continue;
                     }
 
-                    if (extensionAssemblies.Count > 0)
-                    {
-                        TestPluginCache.Instance.UpdateExtensions(extensionAssemblies, skipExtensionFilters: false);
-                    }
+                    extensionAssemblies.AddRange(
+                        this.fileHelper.EnumerateFiles(
+                            adapterPath,
+                            SearchOption.AllDirectories,
+                            TestPlatformConstants.DataCollectorEndsWithPattern));
+                }
+
+                if (extensionAssemblies.Count > 0)
+                {
+                    TestPluginCache.Instance.UpdateExtensions(extensionAssemblies, skipExtensionFilters: false);
                 }
             }
             catch (Exception e)
@@ -278,7 +296,7 @@ private void HandleBeforeTestRunStart(Message message)
         {
             // Initialize datacollectors and get enviornment variables.
             var payload = this.dataSerializer.DeserializePayload<BeforeTestRunStartPayload>(message);
-            this.AddExtensionAssemblies(payload.SettingsXml);
+            this.AddExtensionAssemblies(payload);
 
             var envVariables = this.dataCollectionManager.InitializeDataCollectors(payload.SettingsXml);
 
diff --git a/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/DataCollectionRequestHandlerTests.cs b/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/DataCollectionRequestHandlerTests.cs
index b70096adb2..d8855489a8 100644
--- a/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/DataCollectionRequestHandlerTests.cs
+++ b/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/DataCollectionRequestHandlerTests.cs
@@ -4,23 +4,25 @@
 namespace Microsoft.TestPlatform.CommunicationUtilities.UnitTests
 {
     using System;
-    using System.Collections;
     using System.Collections.Generic;
     using System.Collections.ObjectModel;
-    using System.Globalization;
+    using System.IO;
     using System.Linq;
     using System.Net;
 
     using Microsoft.TestPlatform.CommunicationUtilities.UnitTests.TestDoubles;
     using Microsoft.VisualStudio.TestPlatform.Common.DataCollection;
     using Microsoft.VisualStudio.TestPlatform.Common.DataCollector.Interfaces;
+    using Microsoft.VisualStudio.TestPlatform.Common.ExtensionFramework;
     using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities;
     using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.DataCollection;
+    using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.DataCollection.Interfaces;
     using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.Interfaces;
     using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.ObjectModel;
     using Microsoft.VisualStudio.TestPlatform.ObjectModel;
     using Microsoft.VisualStudio.TestPlatform.ObjectModel.DataCollection;
     using Microsoft.VisualStudio.TestPlatform.ObjectModel.Logging;
+    using Microsoft.VisualStudio.TestPlatform.Utilities.Helpers.Interfaces;
     using Microsoft.VisualStudio.TestTools.UnitTesting;
 
     using Moq;
@@ -39,6 +41,7 @@ public class DataCollectionRequestHandlerTests
         private Mock<IDataCollectionTestCaseEventHandler> mockDataCollectionTestCaseEventHandler;
         private TestableDataCollectionRequestHandler requestHandler;
         private Mock<IDataSerializer> mockDataSerializer;
+        private Mock<IFileHelper> mockFileHelper;
         private Message afterTestRunEnd = new Message() { MessageType = MessageType.AfterTestRunEnd, Payload = "false" };
         private Message beforeTestRunStart = new Message()
         {
@@ -54,7 +57,8 @@ public DataCollectionRequestHandlerTests()
             this.mockDataSerializer = new Mock<IDataSerializer>();
             this.mockDataCollectionTestCaseEventHandler = new Mock<IDataCollectionTestCaseEventHandler>();
             this.mockDataCollectionTestCaseEventHandler.Setup(x => x.WaitForRequestHandlerConnection(It.IsAny<int>())).Returns(true);
-            this.requestHandler = new TestableDataCollectionRequestHandler(this.mockCommunicationManager.Object, this.mockMessageSink.Object, this.mockDataCollectionManager.Object, this.mockDataCollectionTestCaseEventHandler.Object, this.mockDataSerializer.Object);
+            this.mockFileHelper = new Mock<IFileHelper>();
+            this.requestHandler = new TestableDataCollectionRequestHandler(this.mockCommunicationManager.Object, this.mockMessageSink.Object, this.mockDataCollectionManager.Object, this.mockDataCollectionTestCaseEventHandler.Object, this.mockDataSerializer.Object, this.mockFileHelper.Object);
 
             this.mockCommunicationManager.SetupSequence(x => x.ReceiveMessage()).Returns(this.beforeTestRunStart).Returns(this.afterTestRunEnd);
 
@@ -226,6 +230,34 @@ public void ProcessRequestsShouldDisposeDataCollectorsOnAfterTestRunEnd()
             this.mockDataCollectionManager.Verify(x => x.Dispose());
         }
 
+        [TestMethod]
+        public void ProcessRequestsShouldAddSourceDirectoryToTestPluginCache()
+        {
+            var testHostLaunchedPayload = new TestHostLaunchedPayload();
+            testHostLaunchedPayload.ProcessId = 1234;
+
+            string runSettings = "<RunSettings><RunConfiguration><TestAdaptersPaths>d:\\users;f:\\users</TestAdaptersPaths></RunConfiguration></RunSettings>";
+
+            this.mockCommunicationManager.SetupSequence(x => x.ReceiveMessage()).Returns(this.beforeTestRunStart)
+                                                                                .Returns(new Message() { MessageType = MessageType.TestHostLaunched, Payload = JToken.FromObject(testHostLaunchedPayload) })
+                                                                                .Returns(this.afterTestRunEnd);
+
+            this.mockDataCollectionManager.Setup(x => x.SessionStarted(It.IsAny<SessionStartEventArgs>())).Returns(true);
+            this.mockDataCollectionManager.Setup(x => x.TestHostLaunched(It.IsAny<int>()));
+            this.mockDataSerializer.Setup(x => x.DeserializePayload<TestHostLaunchedPayload>(It.Is<Message>(y => y.MessageType == MessageType.TestHostLaunched)))
+                                   .Returns(testHostLaunchedPayload);
+            var beforeTestRunSTartPayload = new BeforeTestRunStartPayload { SettingsXml = runSettings, Sources = new List<string> { @"E:\dir1\test1.dll", @"E:\dir2\test2.dll", @"E:\dir1\test2.dll" } };
+            this.mockDataSerializer.Setup(x => x.DeserializePayload<BeforeTestRunStartPayload>(It.Is<Message>(y => y.MessageType == MessageType.BeforeTestRunStart)))
+                                   .Returns(beforeTestRunSTartPayload);
+            this.mockFileHelper.Setup(x => x.DirectoryExists(@"E:\dir1")).Returns(true);
+            this.mockFileHelper.Setup(x => x.EnumerateFiles("E:\\dir1", SearchOption.AllDirectories, @"Collector.dll")).Returns(new List<string> { @"E:\dir1\abc.datacollector.dll" });
+
+            this.requestHandler.ProcessRequests();
+
+            this.mockFileHelper.Verify(x => x.EnumerateFiles("E:\\dir1", SearchOption.AllDirectories, @"Collector.dll"), Times.Once);
+            Assert.IsTrue(TestPluginCache.Instance.GetExtensionPaths(@"Collector.dll").Contains(@"E:\dir1\abc.datacollector.dll"));
+        }
+
         [TestMethod]
         public void ProcessRequestsShouldThrowExceptionIfThrownByCommunicationManager()
         {
diff --git a/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestDoubles/TestableDataCollectionRequestHandler.cs b/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestDoubles/TestableDataCollectionRequestHandler.cs
index 861f602f1f..375272f712 100644
--- a/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestDoubles/TestableDataCollectionRequestHandler.cs
+++ b/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestDoubles/TestableDataCollectionRequestHandler.cs
@@ -6,11 +6,15 @@ namespace Microsoft.TestPlatform.CommunicationUtilities.UnitTests.TestDoubles
     using Microsoft.VisualStudio.TestPlatform.Common.DataCollector.Interfaces;
     using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.DataCollection;
     using Microsoft.VisualStudio.TestPlatform.CommunicationUtilities.Interfaces;
+    using Microsoft.VisualStudio.TestPlatform.Utilities.Helpers.Interfaces;
 
+    /// <summary>
+    /// Testable class for DataCollectionRequestHandler since all constructors of DataCollectionRequestHandler are protected.
+    /// </summary>
     internal class TestableDataCollectionRequestHandler : DataCollectionRequestHandler
     {
-        public TestableDataCollectionRequestHandler(ICommunicationManager communicationManager, IMessageSink messageSink, IDataCollectionManager dataCollectionManager, IDataCollectionTestCaseEventHandler dataCollectionTestCaseEventHandler, IDataSerializer dataSerializer)
-            : base(communicationManager, messageSink, dataCollectionManager, dataCollectionTestCaseEventHandler, dataSerializer)
+        public TestableDataCollectionRequestHandler(ICommunicationManager communicationManager, IMessageSink messageSink, IDataCollectionManager dataCollectionManager, IDataCollectionTestCaseEventHandler dataCollectionTestCaseEventHandler, IDataSerializer dataSerializer, IFileHelper fIleHelper)
+            : base(communicationManager, messageSink, dataCollectionManager, dataCollectionTestCaseEventHandler, dataSerializer, fIleHelper)
         {
         }
     }