diff --git a/.gitignore b/.gitignore
index ddc5e01720..78ed833761 100644
--- a/.gitignore
+++ b/.gitignore
@@ -36,3 +36,4 @@ testWorkDir/
 .dotnet/
 global.json
 *.binlog
+test/dotnet-watch.FunctionalTests/TestProjects/NuGet.config
\ No newline at end of file
diff --git a/test/dotnet-watch.FunctionalTests/Scenario/ProjectToolScenario.cs b/test/dotnet-watch.FunctionalTests/Scenario/ProjectToolScenario.cs
index dc90313fab..a11310c6e9 100644
--- a/test/dotnet-watch.FunctionalTests/Scenario/ProjectToolScenario.cs
+++ b/test/dotnet-watch.FunctionalTests/Scenario/ProjectToolScenario.cs
@@ -35,7 +35,10 @@ namespace Microsoft.DotNet.Watcher.Tools.FunctionalTests
             CreateTestDirectory();
         }
 
-        public string TempFolder { get; } = Path.Combine(Path.GetDirectoryName(FindNugetConfig()), "testWorkDir", Guid.NewGuid().ToString("N"));
+
+        public static string TestWorkFolder { get; } = Path.Combine(AppContext.BaseDirectory, "testWorkDir");
+
+        public string TempFolder { get; } = Path.Combine(TestWorkFolder, Guid.NewGuid().ToString("N"));
 
         public string WorkFolder { get; }
 
@@ -154,7 +157,7 @@ namespace Microsoft.DotNet.Watcher.Tools.FunctionalTests
 
         private static string FindNugetConfig()
         {
-            var currentDirPath = AppContext.BaseDirectory;
+            var currentDirPath = TestWorkFolder;
 
             string nugetConfigFile;
             while (true)
diff --git a/test/dotnet-watch.FunctionalTests/dotnet-watch.FunctionalTests.csproj b/test/dotnet-watch.FunctionalTests/dotnet-watch.FunctionalTests.csproj
index 04d8118bc1..5d97fcca6f 100644
--- a/test/dotnet-watch.FunctionalTests/dotnet-watch.FunctionalTests.csproj
+++ b/test/dotnet-watch.FunctionalTests/dotnet-watch.FunctionalTests.csproj
@@ -21,6 +21,32 @@
     <PackageReference Include="Microsoft.Extensions.CommandLineUtils.Sources" PrivateAssets="All" Version="$(MicrosoftExtensionsCommandLineUtilsSourcesPackageVersion)" />
   </ItemGroup>
 
+  <Target Name="GenerateRestoreSourcesFile" BeforeTargets="Compile">
+    <PropertyGroup>
+      <RestoreSourcesFile>$(MSBuildThisFileDirectory)/TestProjects/NuGet.config</RestoreSourcesFile>
+    </PropertyGroup>
+
+    <CreateItem Include="$(RestoreSources)">
+      <Output TaskParameter="Include" ItemName="RestoreSourcesItems"/>
+    </CreateItem>
+
+    <ItemGroup>
+      <NuGetConfigLines Include="&lt;?xml version=&quot;1.0&quot; encoding=&quot;utf-8&quot;?&gt;" />
+      <NuGetConfigLines Include="&lt;configuration&gt;" />
+      <NuGetConfigLines Include="&lt;packageSources&gt;" />
+      <NuGetConfigLines Include="&lt;clear/&gt;" />
+      <NuGetConfigLines Include="&lt;add key=&quot;%(RestoreSourcesItems.Identity)&quot; value=&quot;%(RestoreSourcesItems.Identity)&quot; /&gt;" />
+      <NuGetConfigLines Include="&lt;/packageSources&gt;" />
+      <NuGetConfigLines Include="&lt;/configuration&gt;" />
+    </ItemGroup>
+
+    <WriteLinesToFile
+      File="$(RestoreSourcesFile)"
+      Lines="@(NuGetConfigLines)"
+      Overwrite="true"
+      Encoding="UTF-8" />
+  </Target>
+
   <Target Name="CleanTestProjects" BeforeTargets="CoreCompile">
     <RemoveDir Directories="$(TargetDir)TestProjects" Condition="Exists('$(TargetDir)TestProjects')" />
   </Target>
diff --git a/test/dotnet-watch.Tests/MsBuildFileSetFactoryTest.cs b/test/dotnet-watch.Tests/MsBuildFileSetFactoryTest.cs
index 572b021f80..c34111b239 100644
--- a/test/dotnet-watch.Tests/MsBuildFileSetFactoryTest.cs
+++ b/test/dotnet-watch.Tests/MsBuildFileSetFactoryTest.cs
@@ -83,6 +83,7 @@ namespace Microsoft.DotNet.Watcher.Tools.Tests
                 .SubDir("src")
                     .SubDir("Project1")
                         .WithCSharpProject("Project1", out var target)
+                        .WithProperty("BaseIntermediateOutputPath", "obj")
                         .WithTargetFrameworks("netcoreapp1.0")
                         .Dir()
                         .WithFile("Program.cs")
@@ -111,18 +112,18 @@ namespace Microsoft.DotNet.Watcher.Tools.Tests
         [Fact]
         public async Task MultiTfm()
         {
-             _tempDir
-                .SubDir("src")
-                    .SubDir("Project1")
-                        .WithCSharpProject("Project1", out var target)
-                        .WithTargetFrameworks("netcoreapp1.0", "net451")
-                        .WithProperty("EnableDefaultCompileItems", "false")
-                        .WithItem("Compile", "Class1.netcore.cs", "'$(TargetFramework)'=='netcoreapp1.0'")
-                        .WithItem("Compile", "Class1.desktop.cs", "'$(TargetFramework)'=='net451'")
-                        .Dir()
-                        .WithFile("Class1.netcore.cs")
-                        .WithFile("Class1.desktop.cs")
-                        .WithFile("Class1.notincluded.cs");
+            _tempDir
+               .SubDir("src")
+                   .SubDir("Project1")
+                       .WithCSharpProject("Project1", out var target)
+                       .WithTargetFrameworks("netcoreapp1.0", "net451")
+                       .WithProperty("EnableDefaultCompileItems", "false")
+                       .WithItem("Compile", "Class1.netcore.cs", "'$(TargetFramework)'=='netcoreapp1.0'")
+                       .WithItem("Compile", "Class1.desktop.cs", "'$(TargetFramework)'=='net451'")
+                       .Dir()
+                       .WithFile("Class1.netcore.cs")
+                       .WithFile("Class1.desktop.cs")
+                       .WithFile("Class1.notincluded.cs");
 
             var fileset = await GetFileSet(target);
 
diff --git a/test/dotnet-watch.Tests/Utilities/TemporaryDirectory.cs b/test/dotnet-watch.Tests/Utilities/TemporaryDirectory.cs
index 26f36ec5f0..692899817e 100644
--- a/test/dotnet-watch.Tests/Utilities/TemporaryDirectory.cs
+++ b/test/dotnet-watch.Tests/Utilities/TemporaryDirectory.cs
@@ -104,4 +104,4 @@ namespace Microsoft.DotNet.Watcher.Tools.Tests
             }
         }
     }
-}
\ No newline at end of file
+}