diff --git a/pythonFiles/tests/pytestadapter/.data/error_raise_exception.py b/pythonFiles/tests/pytestadapter/.data/error_raise_exception.py
new file mode 100644
index 000000000000..2506089abe07
--- /dev/null
+++ b/pythonFiles/tests/pytestadapter/.data/error_raise_exception.py
@@ -0,0 +1,14 @@
+# Copyright (c) Microsoft Corporation. All rights reserved.
+# Licensed under the MIT License.
+
+import pytest
+
+
+@pytest.fixture
+def raise_fixture():
+    raise Exception("Dummy exception")
+
+
+class TestSomething:
+    def test_a(self, raise_fixture):
+        assert True
diff --git a/pythonFiles/tests/pytestadapter/.data/parametrize_tests.py b/pythonFiles/tests/pytestadapter/.data/parametrize_tests.py
index 6911c9aec7f0..a39b7c26de9f 100644
--- a/pythonFiles/tests/pytestadapter/.data/parametrize_tests.py
+++ b/pythonFiles/tests/pytestadapter/.data/parametrize_tests.py
@@ -1,3 +1,6 @@
+# Copyright (c) Microsoft Corporation. All rights reserved.
+# Licensed under the MIT License.
+
 import pytest
 
 
diff --git a/pythonFiles/tests/pytestadapter/.data/skip_tests.py b/pythonFiles/tests/pytestadapter/.data/skip_tests.py
new file mode 100644
index 000000000000..113e3506932a
--- /dev/null
+++ b/pythonFiles/tests/pytestadapter/.data/skip_tests.py
@@ -0,0 +1,30 @@
+# Copyright (c) Microsoft Corporation. All rights reserved.
+# Licensed under the MIT License.
+
+import pytest
+
+# Testing pytest with skipped tests. The first passes, the second three are skipped.
+
+
+def test_something():  # test_marker--test_something
+    # This tests passes successfully.
+    assert 1 + 1 == 2
+
+
+def test_another_thing():  # test_marker--test_another_thing
+    # Skip this test with a reason.
+    pytest.skip("Skipping this test for now")
+
+
+@pytest.mark.skip(
+    reason="Skipping this test as it requires additional setup"  # test_marker--test_complex_thing
+)
+def test_decorator_thing():
+    # Skip this test as well, with a reason. This one uses a decorator.
+    assert True
+
+
+@pytest.mark.skipif(1 < 5, reason="is always true")  # test_marker--test_complex_thing_2
+def test_decorator_thing_2():
+    # Skip this test as well, with a reason. This one uses a decorator with a condition.
+    assert True
diff --git a/pythonFiles/tests/pytestadapter/expected_discovery_test_output.py b/pythonFiles/tests/pytestadapter/expected_discovery_test_output.py
index b05ed5e9f00c..fb8234350fb4 100644
--- a/pythonFiles/tests/pytestadapter/expected_discovery_test_output.py
+++ b/pythonFiles/tests/pytestadapter/expected_discovery_test_output.py
@@ -489,7 +489,10 @@
                         {
                             "name": "[1]",
                             "path": parameterize_tests_path,
-                            "lineno": "15",
+                            "lineno": find_test_line_number(
+                                "test_under_ten[1]",
+                                parameterize_tests_path,
+                            ),
                             "type_": "test",
                             "id_": "parametrize_tests.py::test_under_ten[1]",
                             "runID": "parametrize_tests.py::test_under_ten[1]",
@@ -497,7 +500,10 @@
                         {
                             "name": "[2]",
                             "path": parameterize_tests_path,
-                            "lineno": "15",
+                            "lineno": find_test_line_number(
+                                "test_under_ten[2]",
+                                parameterize_tests_path,
+                            ),
                             "type_": "test",
                             "id_": "parametrize_tests.py::test_under_ten[2]",
                             "runID": "parametrize_tests.py::test_under_ten[2]",
diff --git a/pythonFiles/tests/pytestadapter/expected_execution_test_output.py b/pythonFiles/tests/pytestadapter/expected_execution_test_output.py
index abe27ffc79ce..3d24f036fe2a 100644
--- a/pythonFiles/tests/pytestadapter/expected_execution_test_output.py
+++ b/pythonFiles/tests/pytestadapter/expected_execution_test_output.py
@@ -150,6 +150,57 @@
     },
 }
 
+# This is the expected output for the error_raised_exception.py file.
+# └── error_raise_exception.py
+#   ├── TestSomething
+#   │   └── test_a: failure
+error_raised_exception_execution_expected_output = {
+    "error_raise_exception.py::TestSomething::test_a": {
+        "test": "error_raise_exception.py::TestSomething::test_a",
+        "outcome": "failure",
+        "message": "ERROR MESSAGE",
+        "traceback": "TRACEBACK",
+        "subtest": None,
+    }
+}
+
+# This is the expected output for the skip_tests.py file.
+# └── test_something: success
+# └── test_another_thing: skipped
+# └── test_decorator_thing: skipped
+# └── test_decorator_thing_2: skipped
+skip_tests_execution_expected_output = {
+    "skip_tests.py::test_something": {
+        "test": "skip_tests.py::test_something",
+        "outcome": "success",
+        "message": None,
+        "traceback": None,
+        "subtest": None,
+    },
+    "skip_tests.py::test_another_thing": {
+        "test": "skip_tests.py::test_another_thing",
+        "outcome": "skipped",
+        "message": None,
+        "traceback": None,
+        "subtest": None,
+    },
+    "skip_tests.py::test_decorator_thing": {
+        "test": "skip_tests.py::test_decorator_thing",
+        "outcome": "skipped",
+        "message": None,
+        "traceback": None,
+        "subtest": None,
+    },
+    "skip_tests.py::test_decorator_thing_2": {
+        "test": "skip_tests.py::test_decorator_thing_2",
+        "outcome": "skipped",
+        "message": None,
+        "traceback": None,
+        "subtest": None,
+    },
+}
+
+
 # This is the expected output for the dual_level_nested_folder.py tests
 #  └── dual_level_nested_folder
 #    └── test_top_folder.py
diff --git a/pythonFiles/tests/pytestadapter/test_execution.py b/pythonFiles/tests/pytestadapter/test_execution.py
index 400ef9f883bc..f147a0462f38 100644
--- a/pythonFiles/tests/pytestadapter/test_execution.py
+++ b/pythonFiles/tests/pytestadapter/test_execution.py
@@ -56,6 +56,19 @@ def test_bad_id_error_execution():
 @pytest.mark.parametrize(
     "test_ids, expected_const",
     [
+        (
+            [
+                "skip_tests.py::test_something",
+                "skip_tests.py::test_another_thing",
+                "skip_tests.py::test_decorator_thing",
+                "skip_tests.py::test_decorator_thing_2",
+            ],
+            expected_execution_test_output.skip_tests_execution_expected_output,
+        ),
+        (
+            ["error_raise_exception.py::TestSomething::test_a"],
+            expected_execution_test_output.error_raised_exception_execution_expected_output,
+        ),
         (
             [
                 "unittest_folder/test_add.py::TestAddFunction::test_add_positive_numbers",
@@ -161,4 +174,6 @@ def test_pytest_execution(test_ids, expected_const):
     for key in actual_result_dict:
         if actual_result_dict[key]["outcome"] == "failure":
             actual_result_dict[key]["message"] = "ERROR MESSAGE"
+        if actual_result_dict[key]["traceback"] != None:
+            actual_result_dict[key]["traceback"] = "TRACEBACK"
     assert actual_result_dict == expected_const
diff --git a/pythonFiles/vscode_pytest/__init__.py b/pythonFiles/vscode_pytest/__init__.py
index d5d7d0e6a9f2..b14a79aef7fd 100644
--- a/pythonFiles/vscode_pytest/__init__.py
+++ b/pythonFiles/vscode_pytest/__init__.py
@@ -69,14 +69,37 @@ def pytest_exception_interact(node, call, report):
     """
     # call.excinfo is the captured exception of the call, if it raised as type ExceptionInfo.
     # call.excinfo.exconly() returns the exception as a string.
-    if call.excinfo and call.excinfo.typename != "AssertionError":
-        ERRORS.append(
-            call.excinfo.exconly() + "\n Check Python Test Logs for more details."
-        )
+    # See if it is during discovery or execution.
+    # if discovery, then add the error to error logs.
+    if type(report) == pytest.CollectReport:
+        if call.excinfo and call.excinfo.typename != "AssertionError":
+            ERRORS.append(
+                call.excinfo.exconly() + "\n Check Python Test Logs for more details."
+            )
+        else:
+            ERRORS.append(
+                report.longreprtext + "\n Check Python Test Logs for more details."
+            )
     else:
-        ERRORS.append(
-            report.longreprtext + "\n Check Python Test Logs for more details."
-        )
+        # if execution, send this data that the given node failed.
+        report_value = "failure"
+        node_id = str(node.nodeid)
+        if node_id not in collected_tests_so_far:
+            collected_tests_so_far.append(node_id)
+            item_result = create_test_outcome(
+                node_id,
+                report_value,
+                "Test failed with exception",
+                report.longreprtext,
+            )
+            collected_test = testRunResultDict()
+            collected_test[node_id] = item_result
+            cwd = pathlib.Path.cwd()
+            execution_post(
+                os.fsdecode(cwd),
+                "success",
+                collected_test if collected_test else None,
+            )
 
 
 def pytest_keyboard_interrupt(excinfo):
@@ -183,6 +206,35 @@ def pytest_report_teststatus(report, config):
 }
 
 
+def pytest_runtest_protocol(item, nextitem):
+    if item.own_markers:
+        for marker in item.own_markers:
+            # If the test is marked with skip then it will not hit the pytest_report_teststatus hook,
+            # therefore we need to handle it as skipped here.
+            skip_condition = False
+            if marker.name == "skipif":
+                skip_condition = any(marker.args)
+            if marker.name == "skip" or skip_condition:
+                node_id = str(item.nodeid)
+                report_value = "skipped"
+                cwd = pathlib.Path.cwd()
+                if node_id not in collected_tests_so_far:
+                    collected_tests_so_far.append(node_id)
+                    item_result = create_test_outcome(
+                        node_id,
+                        report_value,
+                        None,
+                        None,
+                    )
+                    collected_test = testRunResultDict()
+                    collected_test[node_id] = item_result
+                    execution_post(
+                        os.fsdecode(cwd),
+                        "success",
+                        collected_test if collected_test else None,
+                    )
+
+
 def pytest_sessionfinish(session, exitstatus):
     """A pytest hook that is called after pytest has fulled finished.