diff --git a/src/OmniSharp.Abstractions/FileWatching/FileChangeType.cs b/src/OmniSharp.Abstractions/FileWatching/FileChangeType.cs
index 218513e78b..ca5d487cda 100644
--- a/src/OmniSharp.Abstractions/FileWatching/FileChangeType.cs
+++ b/src/OmniSharp.Abstractions/FileWatching/FileChangeType.cs
@@ -5,6 +5,7 @@ public enum FileChangeType
         Unspecified = 0,
         Change,
         Create,
-        Delete
+        Delete,
+        DirectoryDelete
     }
 }
diff --git a/src/OmniSharp.Abstractions/FileWatching/IFileSystemWatcher.cs b/src/OmniSharp.Abstractions/FileWatching/IFileSystemWatcher.cs
index 90bccf5196..200146cea4 100644
--- a/src/OmniSharp.Abstractions/FileWatching/IFileSystemWatcher.cs
+++ b/src/OmniSharp.Abstractions/FileWatching/IFileSystemWatcher.cs
@@ -12,5 +12,6 @@ public interface IFileSystemWatcher
         /// <param name="pathOrExtension">The file path, directory path or file extension to watch.</param>
         /// <param name="callback">The callback that will be invoked when a change occurs in the watched file or directory.</param>
         void Watch(string pathOrExtension, FileSystemNotificationCallback callback);
+        void WatchDirectories(FileSystemNotificationCallback callback);
     }
 }
diff --git a/src/OmniSharp.Host/FileWatching/ManualFileSystemWatcher.cs b/src/OmniSharp.Host/FileWatching/ManualFileSystemWatcher.cs
index 0a485eb27e..ce7c22ec81 100644
--- a/src/OmniSharp.Host/FileWatching/ManualFileSystemWatcher.cs
+++ b/src/OmniSharp.Host/FileWatching/ManualFileSystemWatcher.cs
@@ -1,6 +1,7 @@
 using System;
 using System.Collections.Generic;
 using System.IO;
+using System.Linq;
 
 namespace OmniSharp.FileWatching
 {
@@ -8,6 +9,7 @@ internal partial class ManualFileSystemWatcher : IFileSystemWatcher, IFileSystem
     {
         private readonly object _gate = new object();
         private readonly Dictionary<string, Callbacks> _callbacksMap;
+        private readonly Callbacks _folderCallbacks = new Callbacks();
 
         public ManualFileSystemWatcher()
         {
@@ -18,6 +20,11 @@ public void Notify(string filePath, FileChangeType changeType = FileChangeType.U
         {
             lock (_gate)
             {
+                if(changeType == FileChangeType.DirectoryDelete)
+                {
+                    _folderCallbacks.Invoke(filePath, FileChangeType.DirectoryDelete);
+                }
+
                 if (_callbacksMap.TryGetValue(filePath, out var fileCallbacks))
                 {
                     fileCallbacks.Invoke(filePath, changeType);
@@ -38,6 +45,11 @@ public void Notify(string filePath, FileChangeType changeType = FileChangeType.U
             }
         }
 
+        public void WatchDirectories(FileSystemNotificationCallback callback)
+        {
+            _folderCallbacks.Add(callback);
+        }
+
         public void Watch(string pathOrExtension, FileSystemNotificationCallback callback)
         {
             if (pathOrExtension == null)
diff --git a/src/OmniSharp.Roslyn/OmniSharpWorkspace.cs b/src/OmniSharp.Roslyn/OmniSharpWorkspace.cs
index 4c878a069b..fe0e39bd08 100644
--- a/src/OmniSharp.Roslyn/OmniSharpWorkspace.cs
+++ b/src/OmniSharp.Roslyn/OmniSharpWorkspace.cs
@@ -41,10 +41,26 @@ public OmniSharpWorkspace(HostServicesAggregator aggregator, ILoggerFactory logg
         {
             BufferManager = new BufferManager(this, fileSystemWatcher);
             _logger = loggerFactory.CreateLogger<OmniSharpWorkspace>();
+            fileSystemWatcher.WatchDirectories(OnDirectoryRemoved);
         }
 
         public override bool CanOpenDocuments => true;
 
+
+        private void OnDirectoryRemoved(string path, FileChangeType changeType)
+        {
+            if(changeType == FileChangeType.DirectoryDelete)
+            {
+                var docs = CurrentSolution.Projects.SelectMany(x => x.Documents)
+                    .Where(x => x.FilePath.StartsWith(path + Path.DirectorySeparatorChar, StringComparison.OrdinalIgnoreCase));
+
+                foreach(var doc in docs)
+                {
+                    OnDocumentRemoved(doc.Id);
+                }
+            }
+        }
+
         public void AddWaitForProjectModelReadyHandler(Func<string, Task> handler)
         {
             _waitForProjectModelReadyHandlers.Add(handler);
diff --git a/tests/OmniSharp.Cake.Tests/LineIndexHelperFacts.cs b/tests/OmniSharp.Cake.Tests/LineIndexHelperFacts.cs
index 3dc6f031f4..4446050a52 100644
--- a/tests/OmniSharp.Cake.Tests/LineIndexHelperFacts.cs
+++ b/tests/OmniSharp.Cake.Tests/LineIndexHelperFacts.cs
@@ -7,6 +7,7 @@
 using Microsoft.CodeAnalysis.Text;
 using Microsoft.Extensions.Logging;
 using OmniSharp.Cake.Utilities;
+using OmniSharp.FileWatching;
 using OmniSharp.Services;
 using OmniSharp.Utilities;
 using Xunit;
@@ -59,7 +60,7 @@ private static OmniSharpWorkspace CreateSimpleWorkspace(string fileName, string
             var workspace = new OmniSharpWorkspace(
                 new HostServicesAggregator(
                     Enumerable.Empty<IHostServicesProvider>(), new LoggerFactory()),
-                new LoggerFactory(), null);
+                new LoggerFactory(), new DummyFileSystemWatcher());
 
             var projectInfo = ProjectInfo.Create(ProjectId.CreateNewId(), VersionStamp.Create(),
                 "ProjectNameVal", "AssemblyNameVal", LanguageNames.CSharp);
@@ -147,5 +148,16 @@ public async Task TranslateFromGenerated_Should_Translate_To_Negative_If_Outside
 
             Assert.Equal(expected, actualIndex);
         }
+
+        private class DummyFileSystemWatcher : IFileSystemWatcher
+        {
+            public void Watch(string pathOrExtension, FileSystemNotificationCallback callback)
+            {
+            }
+
+            public void WatchDirectories(FileSystemNotificationCallback callback)
+            {
+            }
+        }
     }
 }
diff --git a/tests/OmniSharp.Roslyn.CSharp.Tests/FilesChangedFacts.cs b/tests/OmniSharp.Roslyn.CSharp.Tests/FilesChangedFacts.cs
index ace7d9d098..623ef1c38e 100644
--- a/tests/OmniSharp.Roslyn.CSharp.Tests/FilesChangedFacts.cs
+++ b/tests/OmniSharp.Roslyn.CSharp.Tests/FilesChangedFacts.cs
@@ -26,11 +26,7 @@ public async Task TestFileAddedToMSBuildWorkspaceOnCreation()
             {
                 var watcher = host.GetExport<IFileSystemWatcher>();
 
-                var path = Path.GetDirectoryName(host.Workspace.CurrentSolution.Projects.First().FilePath);
-                var filePath = Path.Combine(path, "FileName.cs");
-                File.WriteAllText(filePath, "text");
-                var handler = GetRequestHandler(host);
-                await handler.Handle(new[] { new FilesChangedRequest() { FileName = filePath, ChangeType = FileChangeType.Create } });
+                var filePath = await AddFile(host);
 
                 Assert.Contains(host.Workspace.CurrentSolution.Projects.First().Documents, d => d.FilePath == filePath && d.Name == "FileName.cs");
             }
@@ -45,22 +41,19 @@ public async Task TestFileMovedToPreviouslyEmptyDirectory()
                 var watcher = host.GetExport<IFileSystemWatcher>();
 
                 var projectDirectory = Path.GetDirectoryName(host.Workspace.CurrentSolution.Projects.First().FilePath);
-                const string filename = "FileName.cs";
-                var filePath = Path.Combine(projectDirectory, filename);
-                File.WriteAllText(filePath, "text");
-                var handler = GetRequestHandler(host);
-                await handler.Handle(new[] { new FilesChangedRequest() { FileName = filePath, ChangeType = FileChangeType.Create } });
+
+                var filePath = await AddFile(host);
 
                 Assert.Contains(host.Workspace.CurrentSolution.Projects.First().Documents, d => d.FilePath == filePath && d.Name == "FileName.cs");
 
                 var nestedDirectory = Path.Combine(projectDirectory, "Nested");
                 Directory.CreateDirectory(nestedDirectory);
 
-                var destinationPath = Path.Combine(nestedDirectory, filename);
+                var destinationPath = Path.Combine(nestedDirectory, Path.GetFileName(filePath));
                 File.Move(filePath, destinationPath);
 
-                await handler.Handle(new[] { new FilesChangedRequest() { FileName = filePath, ChangeType = FileChangeType.Delete } });
-                await handler.Handle(new[] { new FilesChangedRequest() { FileName = destinationPath, ChangeType = FileChangeType.Create } });
+                await GetRequestHandler(host).Handle(new[] { new FilesChangedRequest() { FileName = filePath, ChangeType = FileChangeType.Delete } });
+                await GetRequestHandler(host).Handle(new[] { new FilesChangedRequest() { FileName = destinationPath, ChangeType = FileChangeType.Create } });
 
                 Assert.Contains(host.Workspace.CurrentSolution.Projects.First().Documents, d => d.FilePath == destinationPath && d.Name == "FileName.cs");
                 Assert.DoesNotContain(host.Workspace.CurrentSolution.Projects.First().Documents, d => d.FilePath == filePath && d.Name == "FileName.cs");
@@ -68,7 +61,7 @@ public async Task TestFileMovedToPreviouslyEmptyDirectory()
         }
 
         [Fact]
-        public void TestMultipleDirectoryWatchers()
+        public async Task TestMultipleDirectoryWatchers()
         {
             using (var host = CreateEmptyOmniSharpHost())
             {
@@ -80,7 +73,7 @@ public void TestMultipleDirectoryWatchers()
                 watcher.Watch("", (path, changeType) => { secondWatcherCalled = true; });
 
                 var handler = GetRequestHandler(host);
-                handler.Handle(new[] { new FilesChangedRequest() { FileName = "FileName.cs", ChangeType = FileChangeType.Create } });
+                await handler.Handle(new[] { new FilesChangedRequest() { FileName = "FileName.cs", ChangeType = FileChangeType.Create } });
 
                 Assert.True(firstWatcherCalled);
                 Assert.True(secondWatcherCalled);
@@ -88,7 +81,7 @@ public void TestMultipleDirectoryWatchers()
         }
 
         [Fact]
-        public void TestFileExtensionWatchers()
+        public async Task TestFileExtensionWatchers()
         {
             using (var host = CreateEmptyOmniSharpHost())
             {
@@ -98,10 +91,38 @@ public void TestFileExtensionWatchers()
                 watcher.Watch(".cs", (path, changeType) => { extensionWatcherCalled = true; });
 
                 var handler = GetRequestHandler(host);
-                handler.Handle(new[] { new FilesChangedRequest() { FileName = "FileName.cs", ChangeType = FileChangeType.Create } });
+                await handler.Handle(new[] { new FilesChangedRequest() { FileName = "FileName.cs", ChangeType = FileChangeType.Create } });
 
                 Assert.True(extensionWatcherCalled);
             }
         }
+
+        [Fact]
+        // This is specifically added to workaround VScode broken file remove notifications on folder removals/moves/renames.
+        // It's by design at VsCode and will probably not get fixed any time soon if ever.
+        public async Task TestThatOnFolderRemovalFilesUnderFolderAreRemoved()
+        {
+            using (var testProject = await TestAssets.Instance.GetTestProjectAsync("ProjectAndSolution"))
+            using (var host = CreateOmniSharpHost(testProject.Directory))
+            {
+                var watcher = host.GetExport<IFileSystemWatcher>();
+
+                var filePath = await AddFile(host);
+
+                await GetRequestHandler(host).Handle(new[] { new FilesChangedRequest() { FileName = Path.GetDirectoryName(filePath), ChangeType = FileChangeType.DirectoryDelete } });
+
+                Assert.DoesNotContain(host.Workspace.CurrentSolution.Projects.First().Documents, d => d.FilePath == filePath && d.Name == Path.GetFileName(filePath));
+            }
+        }
+
+        private async Task<string> AddFile(OmniSharpTestHost host)
+        {
+            var projectDirectory = Path.GetDirectoryName(host.Workspace.CurrentSolution.Projects.First().FilePath);
+            const string filename = "FileName.cs";
+            var filePath = Path.Combine(projectDirectory, filename);
+            File.WriteAllText(filePath, "text");
+            await GetRequestHandler(host).Handle(new[] { new FilesChangedRequest() { FileName = filePath, ChangeType = FileChangeType.Create } });
+            return filePath;
+        }
     }
 }