diff --git a/packages/vscode/__fixtures__/template-imports-app-ts-plugin/package.json b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/package.json
new file mode 100644
index 000000000..3c9745777
--- /dev/null
+++ b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/package.json
@@ -0,0 +1,4 @@
+{
+  "name": "template-imports-app-ts-plugin",
+  "private": true
+}
diff --git a/packages/vscode/__fixtures__/template-imports-app-ts-plugin/src/Greeting.gts b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/src/Greeting.gts
new file mode 100644
index 000000000..c919c8dac
--- /dev/null
+++ b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/src/Greeting.gts
@@ -0,0 +1,13 @@
+import Component from '@glimmer/component';
+
+export interface GreetingSignature {
+  Args: { target: string };
+}
+
+export default class Greeting extends Component<GreetingSignature> {
+  private message = 'Hello';
+
+  <template>
+    {{this.message}}, {{@target}}!
+  </template>
+}
diff --git a/packages/vscode/__fixtures__/template-imports-app-ts-plugin/src/index.gts b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/src/index.gts
new file mode 100644
index 000000000..fae47f952
--- /dev/null
+++ b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/src/index.gts
@@ -0,0 +1,12 @@
+import '@glint/environment-ember-loose';
+import '@glint/environment-ember-template-imports';
+
+// TS-PLUGIN: I had to add the .gts extension in order for this to work, otherwise
+// Cannot find module './Greeting' or its corresponding type declarations. [ts-plugin(2307)]
+
+// import Greeting from './Greeting';
+import Greeting from './Greeting.gts';
+
+<template>
+  <Greeting @target="World" />
+</template>
diff --git a/packages/vscode/__fixtures__/template-imports-app-ts-plugin/tsconfig.json b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/tsconfig.json
new file mode 100644
index 000000000..6811f1e23
--- /dev/null
+++ b/packages/vscode/__fixtures__/template-imports-app-ts-plugin/tsconfig.json
@@ -0,0 +1,13 @@
+{
+  "extends": "../../../../tsconfig.compileroptions.json",
+  "glint": {
+    "environment": ["ember-loose", "ember-template-imports"],
+    "enableTsPlugin": true
+  },
+  "compilerOptions": {
+    "baseUrl": ".",
+
+    // TODO: work out the interplay between this and typescriptServerPlugins in extension's package.json
+    "plugins": [{ "name": "@glint/typescript-plugin" }]
+  }
+}
diff --git a/packages/vscode/__tests__/smoketest-ember.test.ts b/packages/vscode/__tests__/language-server-tests/smoketest-ember.test.ts
similarity index 98%
rename from packages/vscode/__tests__/smoketest-ember.test.ts
rename to packages/vscode/__tests__/language-server-tests/smoketest-ember.test.ts
index e2b459d54..7e22c6080 100644
--- a/packages/vscode/__tests__/smoketest-ember.test.ts
+++ b/packages/vscode/__tests__/language-server-tests/smoketest-ember.test.ts
@@ -14,10 +14,10 @@ import {
 import * as path from 'path';
 import { describe, afterEach, test } from 'mocha';
 import { expect } from 'expect';
-import { waitUntil } from './helpers/async';
+import { waitUntil } from '../helpers/async';
 
 describe.skip('Smoke test: Ember', () => {
-  const rootDir = path.resolve(__dirname, '../../__fixtures__/ember-app');
+  const rootDir = path.resolve(__dirname, '../../../__fixtures__/ember-app');
 
   afterEach(async () => {
     while (window.activeTextEditor) {
diff --git a/packages/vscode/__tests__/smoketest-template-imports.test.ts b/packages/vscode/__tests__/language-server-tests/smoketest-template-imports.test.ts
similarity index 96%
rename from packages/vscode/__tests__/smoketest-template-imports.test.ts
rename to packages/vscode/__tests__/language-server-tests/smoketest-template-imports.test.ts
index 4ba8d2abf..5e66f413f 100644
--- a/packages/vscode/__tests__/smoketest-template-imports.test.ts
+++ b/packages/vscode/__tests__/language-server-tests/smoketest-template-imports.test.ts
@@ -12,10 +12,10 @@ import {
 import * as path from 'path';
 import { describe, afterEach, test } from 'mocha';
 import { expect } from 'expect';
-import { waitUntil } from './helpers/async';
+import { waitUntil } from '../helpers/async';
 
 describe('Smoke test: ETI Environment', () => {
-  const rootDir = path.resolve(__dirname, '../../__fixtures__/template-imports-app');
+  const rootDir = path.resolve(__dirname, '../../../__fixtures__/template-imports-app');
 
   afterEach(async () => {
     while (window.activeTextEditor) {
diff --git a/packages/vscode/__tests__/support/launch-from-cli.mts b/packages/vscode/__tests__/support/launch-from-cli.mts
index be7014ad7..c4069e6b8 100644
--- a/packages/vscode/__tests__/support/launch-from-cli.mts
+++ b/packages/vscode/__tests__/support/launch-from-cli.mts
@@ -2,30 +2,66 @@ import * as path from 'node:path';
 import * as os from 'node:os';
 import { fileURLToPath } from 'node:url';
 import { runTests } from '@vscode/test-electron';
+import * as fs from 'node:fs';
 
 const dirname = path.dirname(fileURLToPath(import.meta.url));
 const packageRoot = path.resolve(dirname, '../../..');
-const emptyTempDir = path.join(os.tmpdir(), `user-data-${Math.random()}`);
+const emptyExtensionsDir = path.join(os.tmpdir(), `extensions-${Math.random()}`);
+const emptyUserDataDir = path.join(os.tmpdir(), `user-data-${Math.random()}`);
+
+const settingsDir = path.join(emptyUserDataDir, 'User');
+fs.mkdirSync(settingsDir, { recursive: true });
+
+const userPreferences = {
+  // When testing TS Plugin, it can be useful to look at tsserver logs within
+  // the test runner VSCode instance. To do this, uncomment the following line,
+  // and then check the logs for TypeScript
+  // "typescript.tsserver.log": "verbose",
+};
+
+fs.writeFileSync(path.join(settingsDir, 'settings.json'), JSON.stringify(userPreferences, null, 2));
+
+const testType = process.argv[2];
+
+let disableExtensionArgs: string[] = [];
+
+let testRunner: string;
+switch (testType) {
+  case 'language-server':
+    testRunner = 'vscode-runner-language-server.js';
+
+    // Disable vanilla TS for full "takeover" mode.
+    disableExtensionArgs = ['--disable-extension', 'vscode.typescript-language-features'];
+    break;
+  case 'ts-plugin':
+    testRunner = 'vscode-runner-ts-plugin.js';
+
+    // Note: here, we WANT vanilla TS to be enabled since we're testing the TS Plugin.
+    break;
+  default:
+    console.error('Test type must be either "language-server" or "ts-plugin"');
+    process.exit(1);
+}
 
 try {
   await runTests({
     extensionDevelopmentPath: packageRoot,
-    extensionTestsPath: path.resolve(dirname, 'vscode-runner.js'),
+    extensionTestsPath: path.resolve(dirname, testRunner),
     launchArgs: [
       // Don't show the "hey do you trust this folder?" prompt
       '--disable-workspace-trust',
-      // Explicitly turn off the built-in TS extension
-      '--disable-extension',
-      'vscode.typescript-language-features',
+      ...disableExtensionArgs,
       // Point at an empty directory so no third-party extensions load
       '--extensions-dir',
-      emptyTempDir,
+      emptyExtensionsDir,
       // Point at an empty directory so we don't have to contend with any local user preferences
       '--user-data-dir',
-      emptyTempDir,
-      // Load the app fixtures
+      emptyUserDataDir,
+      // Load the app fixtures. Note that it's ok to load fixtures that aren't used for the
+      // particular test type.
       `${packageRoot}/__fixtures__/ember-app`,
       `${packageRoot}/__fixtures__/template-imports-app`,
+      `${packageRoot}/__fixtures__/template-imports-app-ts-plugin`,
     ],
   });
 } catch (error) {
diff --git a/packages/vscode/__tests__/support/vscode-runner-language-server.ts b/packages/vscode/__tests__/support/vscode-runner-language-server.ts
new file mode 100644
index 000000000..d955b4fb7
--- /dev/null
+++ b/packages/vscode/__tests__/support/vscode-runner-language-server.ts
@@ -0,0 +1,8 @@
+// This file is invoked by VSCode itself when configured to run extension
+// tests via the `--extensionTestsPath` flag.
+
+import { run as runShared } from './vscode-runner';
+
+export function run(runner: unknown, callback: (error: unknown, failures?: number) => void): void {
+  runShared(runner, callback, 'language-server-tests');
+}
diff --git a/packages/vscode/__tests__/support/vscode-runner-ts-plugin.ts b/packages/vscode/__tests__/support/vscode-runner-ts-plugin.ts
new file mode 100644
index 000000000..d0744b1de
--- /dev/null
+++ b/packages/vscode/__tests__/support/vscode-runner-ts-plugin.ts
@@ -0,0 +1,8 @@
+// This file is invoked by VSCode itself when configured to run extension
+// tests via the `--extensionTestsPath` flag.
+
+import { run as runShared } from './vscode-runner';
+
+export function run(runner: unknown, callback: (error: unknown, failures?: number) => void): void {
+  runShared(runner, callback, 'ts-plugin-tests');
+}
diff --git a/packages/vscode/__tests__/support/vscode-runner.ts b/packages/vscode/__tests__/support/vscode-runner.ts
index 1d6cc6417..778699395 100644
--- a/packages/vscode/__tests__/support/vscode-runner.ts
+++ b/packages/vscode/__tests__/support/vscode-runner.ts
@@ -5,12 +5,16 @@ import * as path from 'node:path';
 import * as glob from 'glob';
 import Mocha = require('mocha');
 
-export function run(runner: unknown, callback: (error: unknown, failures?: number) => void): void {
+export function run(
+  runner: unknown,
+  callback: (error: unknown, failures?: number) => void,
+  testSubfolder: 'language-server-tests' | 'ts-plugin-tests',
+): void {
   try {
     let mocha = new Mocha({ color: true, slow: 3_000, timeout: 30_000 });
     let tests = path.resolve(__dirname, '..').replace(/\\/g, '/');
 
-    for (let testFile of glob.sync(`${tests}/**/*.test.js`)) {
+    for (let testFile of glob.sync(`${tests}/${testSubfolder}/**/*.test.js`)) {
       if (process.platform === 'win32') {
         // Mocha is weird about drive letter casing under Windows
         testFile = testFile[0].toLowerCase() + testFile.slice(1);
diff --git a/packages/vscode/__tests__/ts-plugin-tests/smoketest-template-imports-ts-plugin.test.ts b/packages/vscode/__tests__/ts-plugin-tests/smoketest-template-imports-ts-plugin.test.ts
new file mode 100644
index 000000000..ea06b93e2
--- /dev/null
+++ b/packages/vscode/__tests__/ts-plugin-tests/smoketest-template-imports-ts-plugin.test.ts
@@ -0,0 +1,154 @@
+import {
+  commands,
+  languages,
+  ViewColumn,
+  window,
+  Uri,
+  Range,
+  Position,
+  CodeAction,
+  workspace,
+} from 'vscode';
+import * as path from 'path';
+import { describe, afterEach, test } from 'mocha';
+import { expect } from 'expect';
+import { waitUntil } from '../helpers/async';
+
+describe('Smoke test: ETI Environment (TS Plugin Mode)', () => {
+  const rootDir = path.resolve(__dirname, '../../../__fixtures__/template-imports-app-ts-plugin');
+
+  afterEach(async () => {
+    while (window.activeTextEditor) {
+      await commands.executeCommand('workbench.action.files.revert');
+      await commands.executeCommand('workbench.action.closeActiveEditor');
+    }
+  });
+
+  describe('diagnostics for errors', () => {
+    // TODO: fix remaining tests and remove this `.only`
+    test.only('with a custom extension', async () => {
+      let scriptURI = Uri.file(`${rootDir}/src/index.gts`);
+      let scriptEditor = await window.showTextDocument(scriptURI, { viewColumn: ViewColumn.One });
+
+      // Ensure we have a clean bill of health
+      expect(languages.getDiagnostics(scriptURI)).toEqual([]);
+
+      await hackishlyWaitForTypescriptPluginToActivate();
+
+      // Replace a string with a number
+      await scriptEditor.edit((edit) => {
+        edit.replace(new Range(10, 20, 10, 27), '{{123}}');
+
+        // Original range, in case we revert some of the TS-Plugin-specific
+        // edit.replace(new Range(6, 20, 6, 27), '{{123}}');
+      });
+
+      // Wait for the diagnostic to show up
+      await waitUntil(() => languages.getDiagnostics(scriptURI).length);
+
+      // Verify it's what we expect
+      expect(languages.getDiagnostics(scriptURI)).toMatchObject([
+        {
+          message: "Type 'number' is not assignable to type 'string'.",
+          source: 'ts-plugin',
+          code: 2322,
+          // range: new Range(6, 13, 6, 19),
+          range: new Range(10, 13, 10, 19),
+        },
+      ]);
+    });
+
+    describe('codeactions args', () => {
+      test('adds missing args from template into Args type', async () => {
+        let scriptURI = Uri.file(`${rootDir}/src/Greeting.gts`);
+
+        // Open the script and the template
+        let scriptEditor = await window.showTextDocument(scriptURI, { viewColumn: ViewColumn.One });
+
+        // Ensure neither has any diagnostic messages
+        expect(languages.getDiagnostics(scriptURI)).toEqual([]);
+
+        // Comment out a property in the script that's referenced in the template
+        await scriptEditor.edit((edit) => {
+          edit.insert(new Position(10, 4), '{{@undocumentedProperty}} ');
+        });
+
+        // Wait for a diagnostic to appear in the template
+        await waitUntil(() => languages.getDiagnostics(scriptURI).length);
+
+        const fixes = await commands.executeCommand<CodeAction[]>(
+          'vscode.executeCodeActionProvider',
+          scriptURI,
+          new Range(new Position(10, 9), new Position(10, 9)),
+        );
+
+        expect(fixes.length).toBe(4);
+
+        const fix = fixes.find((fix) => fix.title === "Declare property 'undocumentedProperty'");
+
+        expect(fix).toBeDefined();
+
+        // apply the missing arg fix
+        await workspace.applyEdit(fix!.edit!);
+
+        await waitUntil(
+          () =>
+            scriptEditor.document.getText().includes('undocumentedProperty: any') &&
+            languages.getDiagnostics(scriptURI).length === 0,
+        );
+      });
+    });
+
+    describe('codeactions locals', () => {
+      test('add local props to a class', async () => {
+        let scriptURI = Uri.file(`${rootDir}/src/Greeting.gts`);
+
+        // Open the script and the template
+        let scriptEditor = await window.showTextDocument(scriptURI, { viewColumn: ViewColumn.One });
+
+        // Ensure neither has any diagnostic messages
+        expect(languages.getDiagnostics(scriptURI)).toEqual([]);
+
+        await scriptEditor.edit((edit) => {
+          edit.insert(new Position(10, 4), '{{this.localProp}} ');
+        });
+
+        // Wait for a diagnostic to appear in the template
+        await waitUntil(() => languages.getDiagnostics(scriptURI).length);
+
+        const fixes = await commands.executeCommand<CodeAction[]>(
+          'vscode.executeCodeActionProvider',
+          scriptURI,
+          new Range(new Position(10, 12), new Position(10, 12)),
+        );
+
+        expect(fixes.length).toBe(4);
+
+        const fix = fixes.find((fix) => fix.title === "Declare property 'localProp'");
+
+        expect(fix).toBeDefined();
+
+        // select ignore
+        await workspace.applyEdit(fix!.edit!);
+
+        await waitUntil(
+          () =>
+            scriptEditor.document.getText().includes('localProp: any') &&
+            languages.getDiagnostics(scriptURI).length,
+        );
+      });
+    });
+  });
+});
+
+/**
+ * We shouldn't have to use this function for many reasons:
+ *
+ * 1. Using timers to avoid a race condition is brittle
+ * 2. More importantly: this only solves the problem of "make sure the TS Plugin is activated
+ *    before we edit the file" when what we REALLY want is diagnostics to kick in without
+ *    editing.
+ */
+function hackishlyWaitForTypescriptPluginToActivate(): Promise<void> {
+  return new Promise((resolve) => setTimeout(resolve, 5000));
+}
diff --git a/packages/vscode/package.json b/packages/vscode/package.json
index 69abe0038..37761b60c 100644
--- a/packages/vscode/package.json
+++ b/packages/vscode/package.json
@@ -25,7 +25,9 @@
   ],
   "scripts": {
     "pretest": "yarn build",
-    "test": "node lib/__tests__/support/launch-from-cli.mjs",
+    "test": "yarn test-language-server && yarn test-ts-plugin",
+    "test-language-server": "node lib/__tests__/support/launch-from-cli.mjs language-server",
+    "test-ts-plugin": "node lib/__tests__/support/launch-from-cli.mjs ts-plugin",
     "test:typecheck": "echo 'no standalone typecheck within this project'",
     "test:tsc": "echo 'no standalone tsc within this project'",
     "build": "yarn compile && yarn bundle",