diff --git a/test/Microsoft.VisualStudio.LanguageServices.Razor.Test/DefaultTemplateEngineFactoryServiceTest.cs b/test/Microsoft.VisualStudio.LanguageServices.Razor.Test/DefaultTemplateEngineFactoryServiceTest.cs
new file mode 100644
index 0000000000..30af758179
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+++ b/test/Microsoft.VisualStudio.LanguageServices.Razor.Test/DefaultTemplateEngineFactoryServiceTest.cs
@@ -0,0 +1,176 @@
+// Copyright (c) .NET Foundation. All rights reserved.
+// Licensed under the Apache License, Version 2.0. See License.txt in the project root for license information.
+
+using System.Linq;
+using Microsoft.AspNetCore.Razor.Language;
+using Microsoft.CodeAnalysis.CSharp;
+using Microsoft.CodeAnalysis.Host;
+using Mvc1_X = Microsoft.AspNetCore.Mvc.Razor.Extensions.Version1_X;
+using MvcLatest = Microsoft.AspNetCore.Mvc.Razor.Extensions;
+using Xunit;
+
+namespace Microsoft.CodeAnalysis.Razor
+{
+    public class DefaultTemplateEngineFactoryServiceTest
+    {
+        [Fact]
+        public void Create_CreatesDesignTimeTemplateEngine_ForLatest()
+        {
+            // Arrange
+            var mvcReference = GetAssemblyMetadataReference("Microsoft.AspNetCore.Mvc.Razor", "2.0.0");
+            var services = GetServices(mvcReference);
+            var factoryService = new DefaultTemplateEngineFactoryService(services);
+
+            // Act
+            var engine = factoryService.Create("/TestPath/SomePath/", b =>
+            {
+                b.Features.Add(new MyCoolNewFeature());
+                Assert.True(b.DesignTime);
+            });
+
+            // Assert
+            Assert.Single(engine.Engine.Features.OfType<MyCoolNewFeature>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.MvcViewDocumentClassifierPass>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.ViewComponentTagHelperPass>());
+        }
+
+        [Fact]
+        public void Create_CreatesDesignTimeTemplateEngine_ForVersion1_1()
+        {
+            // Arrange
+            var mvcReference = GetAssemblyMetadataReference("Microsoft.AspNetCore.Mvc.Razor", "1.1.3");
+            var services = GetServices(mvcReference);
+            var factoryService = new DefaultTemplateEngineFactoryService(services);
+
+            // Act
+            var engine = factoryService.Create("/TestPath/SomePath/", b =>
+            {
+                b.Features.Add(new MyCoolNewFeature());
+                Assert.True(b.DesignTime);
+            });
+
+            // Assert
+            Assert.Single(engine.Engine.Features.OfType<MyCoolNewFeature>());
+            Assert.Single(engine.Engine.Features.OfType<Mvc1_X.MvcViewDocumentClassifierPass>());
+            Assert.Single(engine.Engine.Features.OfType<Mvc1_X.ViewComponentTagHelperPass>());
+        }
+
+        [Fact]
+        public void Create_DoesNotSupportViewComponentTagHelpers_ForVersion1_0()
+        {
+            // Arrange
+            var mvcReference = GetAssemblyMetadataReference("Microsoft.AspNetCore.Mvc.Razor", "1.0.0");
+            var services = GetServices(mvcReference);
+            var factoryService = new DefaultTemplateEngineFactoryService(services);
+
+            // Act
+            var engine = factoryService.Create("/TestPath/SomePath/", b =>
+            {
+                b.Features.Add(new MyCoolNewFeature());
+            });
+
+            // Assert
+            Assert.Single(engine.Engine.Features.OfType<MyCoolNewFeature>());
+            Assert.Single(engine.Engine.Features.OfType<Mvc1_X.MvcViewDocumentClassifierPass>());
+            Assert.Empty(engine.Engine.Features.OfType<Mvc1_X.ViewComponentTagHelperPass>());
+        }
+
+        [Fact]
+        public void Create_UnknownMvcVersion_UsesLatest()
+        {
+            // Arrange
+            var mvcReference = GetAssemblyMetadataReference("Microsoft.AspNetCore.Mvc.Razor", "3.0.0");
+            var services = GetServices(mvcReference);
+            var factoryService = new DefaultTemplateEngineFactoryService(services);
+
+            // Act
+            var engine = factoryService.Create("/TestPath/SomePath/", b =>
+            {
+                b.Features.Add(new MyCoolNewFeature());
+                Assert.True(b.DesignTime);
+            });
+
+            // Assert
+            Assert.Single(engine.Engine.Features.OfType<MyCoolNewFeature>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.MvcViewDocumentClassifierPass>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.ViewComponentTagHelperPass>());
+        }
+
+        [Fact]
+        public void Create_UnknownProjectPath_UsesLatest()
+        {
+            // Arrange
+            var mvcReference = GetAssemblyMetadataReference("Microsoft.AspNetCore.Mvc.Razor", "1.1.0");
+            var services = GetServices(mvcReference);
+            var factoryService = new DefaultTemplateEngineFactoryService(services);
+
+            // Act
+            var engine = factoryService.Create("/TestPath/DifferentPath/", b =>
+            {
+                b.Features.Add(new MyCoolNewFeature());
+                Assert.True(b.DesignTime);
+            });
+
+            // Assert
+            Assert.Single(engine.Engine.Features.OfType<MyCoolNewFeature>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.MvcViewDocumentClassifierPass>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.ViewComponentTagHelperPass>());
+        }
+
+        [Fact]
+        public void Create_MvcReferenceNotFound_UsesLatest()
+        {
+            // Arrange
+            var mvcReference = GetAssemblyMetadataReference("Microsoft.Something.Else", "1.0.0");
+            var services = GetServices(mvcReference);
+            var factoryService = new DefaultTemplateEngineFactoryService(services);
+
+            // Act
+            var engine = factoryService.Create("/TestPath/DifferentPath/", b =>
+            {
+                b.Features.Add(new MyCoolNewFeature());
+                Assert.True(b.DesignTime);
+            });
+
+            // Assert
+            Assert.Single(engine.Engine.Features.OfType<MyCoolNewFeature>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.MvcViewDocumentClassifierPass>());
+            Assert.Single(engine.Engine.Features.OfType<MvcLatest.ViewComponentTagHelperPass>());
+        }
+
+        private HostLanguageServices GetServices(MetadataReference mvcReference)
+        {
+            var project = ProjectInfo
+                .Create(ProjectId.CreateNewId(), VersionStamp.Default, "TestProject", "TestAssembly", LanguageNames.CSharp)
+                .WithFilePath("/TestPath/SomePath/MyProject.csproj")
+                .WithMetadataReferences(new[] { mvcReference });
+
+            var workspace = new AdhocWorkspace();
+            workspace.AddProject(project);
+
+            return workspace.Services.GetLanguageServices(LanguageNames.CSharp);
+        }
+
+        private MetadataReference GetAssemblyMetadataReference(string assemblyName, string version)
+        {
+            var code = $@"
+using System.Reflection;
+[assembly: AssemblyVersion(""{version}"")]
+";
+
+            var syntaxTree = CSharpSyntaxTree.ParseText(code);
+
+            var compilation = CSharpCompilation.Create(
+                assemblyName,
+                syntaxTrees: new[] { syntaxTree },
+                references: new[] { MetadataReference.CreateFromFile(typeof(object).Assembly.Location) });
+
+            return compilation.ToMetadataReference();
+        }
+
+        private class MyCoolNewFeature : IRazorEngineFeature
+        {
+            public RazorEngine Engine { get; set; }
+        }
+    }
+}