diff --git a/src/Adapter/PlatformServices.Desktop/Services/DesktopTestSourceHost.cs b/src/Adapter/PlatformServices.Desktop/Services/DesktopTestSourceHost.cs
index dc6c4d3ecc..b238127b38 100644
--- a/src/Adapter/PlatformServices.Desktop/Services/DesktopTestSourceHost.cs
+++ b/src/Adapter/PlatformServices.Desktop/Services/DesktopTestSourceHost.cs
@@ -73,7 +73,7 @@ internal TestSourceHost(string sourceFileName, IRunSettings runSettings, IFramew
             this.SetContext(sourceFileName);
 
             // Set isAppDomainCreationDisabled flag
-            this.AppDomainCreationDisabledInRunSettings();
+            this.isAppDomainCreationDisabled = (this.runSettings != null) && MSTestAdapterSettings.IsAppDomainCreationDisabled(this.runSettings.SettingsXml);
         }
 
         internal AppDomain AppDomain
@@ -354,16 +354,6 @@ private void ResetContext()
         }
     }
 
-    private void AppDomainCreationDisabledInRunSettings()
-    {
-        if (this.runSettings != null && MSTestAdapterSettings.IsAppDomainCreationDisabled(this.runSettings.SettingsXml))
-        {
-                this.isAppDomainCreationDisabled = true;
-        }
-
-         this.isAppDomainCreationDisabled = false;
-    }
-
     private void AddSearchDirectoriesSpecifiedInRunSettingsToAssemblyResolver(AssemblyResolver assemblyResolver, string baseDirectory)
     {
             // Check if user specified any adapter settings
diff --git a/test/UnitTests/PlatformServices.Desktop.Unit.Tests/Services/DesktopTestSourceHostTests.cs b/test/UnitTests/PlatformServices.Desktop.Unit.Tests/Services/DesktopTestSourceHostTests.cs
index 77a000d8a5..22af3fe0d8 100644
--- a/test/UnitTests/PlatformServices.Desktop.Unit.Tests/Services/DesktopTestSourceHostTests.cs
+++ b/test/UnitTests/PlatformServices.Desktop.Unit.Tests/Services/DesktopTestSourceHostTests.cs
@@ -263,6 +263,66 @@ public void DisposeShouldSetTestHostShutdownOnIssueWithAppDomainUnload()
             // Assert
             frameworkHandle.VerifySet(fh => fh.EnableShutdownAfterTestRun = true);
         }
+
+        [TestMethod]
+        public void NoAppDomainShouldGetCreatedWhenDisableAppDomainIsSetToTrue()
+        {
+            // Arrange
+            DummyClass dummyclass = new DummyClass();
+            string runSettingxml =
+            @"<RunSettings>   
+                <RunConfiguration>  
+                    <DisableAppDomain>True</DisableAppDomain>   
+                </RunConfiguration>  
+            </RunSettings>";
+
+            var location = typeof(TestSourceHost).Assembly.Location;
+            var mockRunSettings = new Mock<IRunSettings>();
+            mockRunSettings.Setup(rs => rs.SettingsXml).Returns(runSettingxml);
+
+            Mock<TestSourceHost> testSourceHost = new Mock<TestSourceHost>(location, mockRunSettings.Object, null) { CallBase = true };
+
+            try
+            {
+                // Act
+                testSourceHost.Object.SetupHost();
+                Assert.IsNull(testSourceHost.Object.AppDomain);
+            }
+            finally
+            {
+                testSourceHost.Object.Dispose();
+            }
+        }
+
+        [TestMethod]
+        public void AppDomainShouldGetCreatedWhenDisableAppDomainIsSetToFalse()
+        {
+            // Arrange
+            DummyClass dummyclass = new DummyClass();
+            string runSettingxml =
+            @"<RunSettings>   
+                <RunConfiguration>  
+                    <DisableAppDomain>False</DisableAppDomain>   
+                </RunConfiguration>  
+            </RunSettings>";
+
+            var location = typeof(TestSourceHost).Assembly.Location;
+            var mockRunSettings = new Mock<IRunSettings>();
+            mockRunSettings.Setup(rs => rs.SettingsXml).Returns(runSettingxml);
+
+            Mock<TestSourceHost> testSourceHost = new Mock<TestSourceHost>(location, mockRunSettings.Object, null) { CallBase = true };
+
+            try
+            {
+                // Act
+                testSourceHost.Object.SetupHost();
+                Assert.IsNotNull(testSourceHost.Object.AppDomain);
+            }
+            finally
+            {
+                testSourceHost.Object.Dispose();
+            }
+        }
     }
 
     public class DummyClass : MarshalByRefObject