diff --git a/shared/NullReporter.cs b/shared/NullReporter.cs
new file mode 100644
index 0000000000..5d80aeac91
--- /dev/null
+++ b/shared/NullReporter.cs
@@ -0,0 +1,25 @@
+// 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.
+
+namespace Microsoft.Extensions.Tools.Internal
+{
+    public class NullReporter : IReporter
+    {
+        private NullReporter()
+        { }
+
+        public static IReporter Singleton { get; } = new NullReporter();
+
+        public void Verbose(string message)
+        { }
+
+        public void Output(string message)
+        { }
+
+        public void Warn(string message)
+        { }
+
+        public void Error(string message)
+        { }
+    }
+}
diff --git a/src/Microsoft.DotNet.Watcher.Tools/CommandLineOptions.cs b/src/Microsoft.DotNet.Watcher.Tools/CommandLineOptions.cs
index af158d0e53..22705c9265 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/CommandLineOptions.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/CommandLineOptions.cs
@@ -1,6 +1,7 @@
 // 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;
 using System.Collections.Generic;
 using System.Reflection;
 using Microsoft.DotNet.Watcher.Tools;
@@ -19,6 +20,17 @@ namespace Microsoft.DotNet.Watcher
         public IList<string> RemainingArguments { get; private set; }
         public bool ListFiles { get; private set; }
 
+        public static bool IsPollingEnabled
+        {
+            get
+            {
+                var envVar = Environment.GetEnvironmentVariable("DOTNET_USE_POLLING_FILE_WATCHER");
+                return envVar != null &&
+                    (envVar.Equals("1", StringComparison.OrdinalIgnoreCase) ||
+                     envVar.Equals("true", StringComparison.OrdinalIgnoreCase));
+            }
+        }
+
         public static CommandLineOptions Parse(string[] args, IConsole console)
         {
             Ensure.NotNull(args, nameof(args));
diff --git a/src/Microsoft.DotNet.Watcher.Tools/DotNetWatcher.cs b/src/Microsoft.DotNet.Watcher.Tools/DotNetWatcher.cs
index 66a213a043..258ba0ab1e 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/DotNetWatcher.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/DotNetWatcher.cs
@@ -51,7 +51,7 @@ namespace Microsoft.DotNet.Watcher
                 using (var combinedCancellationSource = CancellationTokenSource.CreateLinkedTokenSource(
                     cancellationToken,
                     currentRunCancellationSource.Token))
-                using (var fileSetWatcher = new FileSetWatcher(fileSet))
+                using (var fileSetWatcher = new FileSetWatcher(fileSet, _reporter))
                 {
                     var fileSetTask = fileSetWatcher.GetChangedFileAsync(combinedCancellationSource.Token);
                     var processTask = _processRunner.RunAsync(processSpec, combinedCancellationSource.Token);
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileSetWatcher.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileSetWatcher.cs
index 597d13cdd1..3dc56cc452 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileSetWatcher.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileSetWatcher.cs
@@ -11,14 +11,15 @@ namespace Microsoft.DotNet.Watcher.Internal
 {
     public class FileSetWatcher : IDisposable
     {
-        private readonly FileWatcher _fileWatcher = new FileWatcher();
+        private readonly FileWatcher _fileWatcher;
         private readonly IFileSet _fileSet;
 
-        public FileSetWatcher(IFileSet fileSet)
+        public FileSetWatcher(IFileSet fileSet, IReporter reporter)
         {
             Ensure.NotNull(fileSet, nameof(fileSet));
 
             _fileSet = fileSet;
+            _fileWatcher = new FileWatcher(reporter);
         }
 
         public async Task<string> GetChangedFileAsync(CancellationToken cancellationToken)
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher.cs
index 20840f40b9..65c2ff9285 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher.cs
@@ -5,6 +5,7 @@ using System;
 using System.Collections.Generic;
 using System.IO;
 using System.Linq;
+using Microsoft.Extensions.Tools.Internal;
 
 namespace Microsoft.DotNet.Watcher.Internal
 {
@@ -12,7 +13,18 @@ namespace Microsoft.DotNet.Watcher.Internal
     {
         private bool _disposed;
 
-        private readonly IDictionary<string, IFileSystemWatcher> _watchers = new Dictionary<string, IFileSystemWatcher>();
+        private readonly IDictionary<string, IFileSystemWatcher> _watchers;
+        private readonly IReporter _reporter;
+
+        public FileWatcher()
+            : this(NullReporter.Singleton)
+        { }
+
+        public FileWatcher(IReporter reporter)
+        {
+            _reporter = reporter ?? throw new ArgumentNullException(nameof(reporter));
+            _watchers = new Dictionary<string, IFileSystemWatcher>();
+        }
 
         public event Action<string> OnFileChange;
 
@@ -33,8 +45,11 @@ namespace Microsoft.DotNet.Watcher.Internal
 
             foreach (var watcher in _watchers)
             {
+                watcher.Value.OnFileChange -= WatcherChangedHandler;
+                watcher.Value.OnError -= WatcherErrorHandler;
                 watcher.Value.Dispose();
             }
+
             _watchers.Clear();
         }
 
@@ -66,11 +81,20 @@ namespace Microsoft.DotNet.Watcher.Internal
 
             var newWatcher = FileWatcherFactory.CreateWatcher(directory);
             newWatcher.OnFileChange += WatcherChangedHandler;
+            newWatcher.OnError += WatcherErrorHandler;
             newWatcher.EnableRaisingEvents = true;
 
             _watchers.Add(directory, newWatcher);
         }
 
+        private void WatcherErrorHandler(object sender, Exception error)
+        {
+            if (sender is IFileSystemWatcher watcher)
+            {
+                _reporter.Warn($"The file watcher observing '{watcher.BasePath}' encountered an error: {error.Message}");
+            }
+        }
+
         private void WatcherChangedHandler(object sender, string changedPath)
         {
             NotifyChange(changedPath);
@@ -90,7 +114,9 @@ namespace Microsoft.DotNet.Watcher.Internal
             _watchers.Remove(directory);
 
             watcher.EnableRaisingEvents = false;
+
             watcher.OnFileChange -= WatcherChangedHandler;
+            watcher.OnError -= WatcherErrorHandler;
 
             watcher.Dispose();
         }
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/DotnetFileWatcher.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/DotnetFileWatcher.cs
index 5064239746..d1103c41e6 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/DotnetFileWatcher.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/DotnetFileWatcher.cs
@@ -2,6 +2,7 @@
 // Licensed under the Apache License, Version 2.0. See License.txt in the project root for license information.
 
 using System;
+using System.ComponentModel;
 using System.IO;
 using Microsoft.Extensions.Tools.Internal;
 
@@ -10,7 +11,6 @@ namespace Microsoft.DotNet.Watcher.Internal
     internal class DotnetFileWatcher : IFileSystemWatcher
     {
         private readonly Func<string, FileSystemWatcher> _watcherFactory;
-        private readonly string _watchedDirectory;
 
         private FileSystemWatcher _fileSystemWatcher;
 
@@ -26,14 +26,16 @@ namespace Microsoft.DotNet.Watcher.Internal
             Ensure.NotNull(fileSystemWatcherFactory, nameof(fileSystemWatcherFactory));
             Ensure.NotNullOrEmpty(watchedDirectory, nameof(watchedDirectory));
 
-            _watchedDirectory = watchedDirectory;
+            BasePath = watchedDirectory;
             _watcherFactory = fileSystemWatcherFactory;
             CreateFileSystemWatcher();
         }
 
         public event EventHandler<string> OnFileChange;
 
-        public event EventHandler OnError;
+        public event EventHandler<Exception> OnError;
+
+        public string BasePath { get; }
 
         private static FileSystemWatcher DefaultWatcherFactory(string watchedDirectory)
         {
@@ -44,10 +46,18 @@ namespace Microsoft.DotNet.Watcher.Internal
 
         private void WatcherErrorHandler(object sender, ErrorEventArgs e)
         {
-            // Recreate the watcher
-            CreateFileSystemWatcher();
+            var exception = e.GetException();
 
-            OnError?.Invoke(this, null);
+            // Win32Exception may be triggered when setting EnableRaisingEvents on a file system type
+            // that is not supported, such as a network share. Don't attempt to recreate the watcher
+            // in this case as it will cause a StackOverflowException
+            if (!(exception is Win32Exception))
+            {
+                // Recreate the watcher if it is a recoverable error.
+                CreateFileSystemWatcher();
+            }
+
+            OnError?.Invoke(this, exception);
         }
 
         private void WatcherRenameHandler(object sender, RenamedEventArgs e)
@@ -99,7 +109,7 @@ namespace Microsoft.DotNet.Watcher.Internal
                     _fileSystemWatcher.Dispose();
                 }
 
-                _fileSystemWatcher = _watcherFactory(_watchedDirectory);
+                _fileSystemWatcher = _watcherFactory(BasePath);
                 _fileSystemWatcher.IncludeSubdirectories = true;
 
                 _fileSystemWatcher.Created += WatcherChangeHandler;
@@ -114,8 +124,8 @@ namespace Microsoft.DotNet.Watcher.Internal
 
         public bool EnableRaisingEvents
         {
-            get { return _fileSystemWatcher.EnableRaisingEvents; }
-            set { _fileSystemWatcher.EnableRaisingEvents = value; }
+            get => _fileSystemWatcher.EnableRaisingEvents;
+            set => _fileSystemWatcher.EnableRaisingEvents = value;
         }
 
         public void Dispose()
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/FileWatcherFactory.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/FileWatcherFactory.cs
index 248342571f..cbb1c12a74 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/FileWatcherFactory.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/FileWatcherFactory.cs
@@ -8,15 +8,7 @@ namespace Microsoft.DotNet.Watcher.Internal
     public static class FileWatcherFactory
     {
         public static IFileSystemWatcher CreateWatcher(string watchedDirectory)
-        {
-            var envVar = Environment.GetEnvironmentVariable("DOTNET_USE_POLLING_FILE_WATCHER");
-            var usePollingWatcher =
-                envVar != null &&
-                (envVar.Equals("1", StringComparison.OrdinalIgnoreCase) ||
-                 envVar.Equals("true", StringComparison.OrdinalIgnoreCase));
-
-            return CreateWatcher(watchedDirectory, usePollingWatcher);
-        }
+            => CreateWatcher(watchedDirectory, CommandLineOptions.IsPollingEnabled);
 
         public static IFileSystemWatcher CreateWatcher(string watchedDirectory, bool usePollingWatcher)
         {
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/IFileSystemWatcher.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/IFileSystemWatcher.cs
index 4bfc6bac6d..aaf5773449 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/IFileSystemWatcher.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/IFileSystemWatcher.cs
@@ -9,7 +9,9 @@ namespace Microsoft.DotNet.Watcher.Internal
     {
         event EventHandler<string> OnFileChange;
 
-        event EventHandler OnError;
+        event EventHandler<Exception> OnError;
+
+        string BasePath { get; }
 
         bool EnableRaisingEvents { get; set; }
     }
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/PollingFileWatcher.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/PollingFileWatcher.cs
index 25e4f6f76f..1b503af774 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/PollingFileWatcher.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/FileWatcher/PollingFileWatcher.cs
@@ -31,6 +31,7 @@ namespace Microsoft.DotNet.Watcher.Internal
             Ensure.NotNullOrEmpty(watchedDirectory, nameof(watchedDirectory));
 
             _watchedDirectory = new DirectoryInfo(watchedDirectory);
+            BasePath = _watchedDirectory.FullName;
 
             _pollingThread = new Thread(new ThreadStart(PollingLoop));
             _pollingThread.IsBackground = true;
@@ -44,15 +45,14 @@ namespace Microsoft.DotNet.Watcher.Internal
         public event EventHandler<string> OnFileChange;
 
 #pragma warning disable CS0067 // not used
-        public event EventHandler OnError;
+        public event EventHandler<Exception> OnError;
 #pragma warning restore
 
+        public string BasePath { get; }
+
         public bool EnableRaisingEvents
         {
-            get
-            {
-                return _raiseEvents;
-            }
+            get => _raiseEvents;
             set
             {
                 EnsureNotDisposed();
@@ -125,7 +125,7 @@ namespace Microsoft.DotNet.Watcher.Internal
 
                         _knownEntities[fullFilePath] = new FileMeta(fileMeta.FileInfo, true);
                     }
-                    catch(FileNotFoundException)
+                    catch (FileNotFoundException)
                     {
                         _knownEntities[fullFilePath] = new FileMeta(fileMeta.FileInfo, false);
                     }
@@ -187,7 +187,7 @@ namespace Microsoft.DotNet.Watcher.Internal
             {
                 return;
             }
-            
+
             var entities = dirInfo.EnumerateFileSystemInfos("*.*");
             foreach (var entity in entities)
             {
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Internal/MsBuildFileSetFactory.cs b/src/Microsoft.DotNet.Watcher.Tools/Internal/MsBuildFileSetFactory.cs
index 01b8f4a996..0190b089ca 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Internal/MsBuildFileSetFactory.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Internal/MsBuildFileSetFactory.cs
@@ -144,7 +144,7 @@ namespace Microsoft.DotNet.Watcher.Internal
 
                         var fileSet = new FileSet(new[] { _projectFile });
 
-                        using (var watcher = new FileSetWatcher(fileSet))
+                        using (var watcher = new FileSetWatcher(fileSet, _reporter))
                         {
                             await watcher.GetChangedFileAsync(cancellationToken);
 
diff --git a/src/Microsoft.DotNet.Watcher.Tools/Program.cs b/src/Microsoft.DotNet.Watcher.Tools/Program.cs
index c8832649fb..019c95a329 100644
--- a/src/Microsoft.DotNet.Watcher.Tools/Program.cs
+++ b/src/Microsoft.DotNet.Watcher.Tools/Program.cs
@@ -160,6 +160,11 @@ namespace Microsoft.DotNet.Watcher
                 },
             };
 
+            if (CommandLineOptions.IsPollingEnabled)
+            {
+                _reporter.Output("Polling file watcher is enabled");
+            }
+
             await new DotNetWatcher(reporter)
                 .WatchAsync(processInfo, fileSetFactory, cancellationToken);