diff --git a/src/Build.UnitTests/BackEnd/SdkResolverLoader_Tests.cs b/src/Build.UnitTests/BackEnd/SdkResolverLoader_Tests.cs
index 298987ef008..2449288f3e1 100644
--- a/src/Build.UnitTests/BackEnd/SdkResolverLoader_Tests.cs
+++ b/src/Build.UnitTests/BackEnd/SdkResolverLoader_Tests.cs
@@ -396,6 +396,106 @@ public void SdkResolverLoaderHonorsAdditionalResolversFolder()
             }
         }
 
+        /// <summary>
+        /// Test that LoadResolverAssembly handles fallback behavior correctly based on isRunningInVS.
+        /// Uses MockSdkResolverLoader to simulate both VS and non-VS behaviors .
+        /// </summary>
+        [Theory]
+        [InlineData(true, false)]   // isRunningInVS = true, no fallback, should fail when Assembly.Load fails
+        [InlineData(false, true)]    // isRunningInVS = false, has fallback, should succeed with LoadFrom
+        public void LoadResolverAssembly_MSBuildSdkResolver_WithAndWithoutFallback(bool isRunningInVS, bool shouldSucceed)
+        {
+            using (var env = TestEnvironment.Create(_output))
+            {
+                // Create resolver folder structure with the specific name that triggers special logic
+                var testRoot = env.CreateFolder().Path;
+                var resolverFolder = Path.Combine(testRoot, "Microsoft.DotNet.MSBuildSdkResolver");
+                Directory.CreateDirectory(resolverFolder);
+
+                var assemblyFile = Path.Combine(resolverFolder, "Microsoft.DotNet.MSBuildSdkResolver.dll");
+
+                // Create file based on test scenario
+                // For shouldSucceed=false: create invalid file to test Assembly.Load failure
+                // For shouldSucceed=true: we don't create a file - we'll simulate success in the mock
+                // to avoid side effects from loading Microsoft.Build.dll copy
+                if (!shouldSucceed)
+                {
+                    // For no-fallback test: create invalid assembly content to force Assembly.Load to fail
+                    File.WriteAllText(assemblyFile, "invalid assembly content");
+                }
+
+                // Use MockSdkResolverLoader to simulate behavior without modifying global state
+                // We avoid actually calling Assembly.LoadFrom with Microsoft.Build.dll copy to prevent side effects
+                var loader = new MockSdkResolverLoader
+                {
+                    FindPotentialSdkResolversFunc = (_, __) => new List<string> { assemblyFile },
+                    GetResolverTypesFunc = assembly => new[] { typeof(MockSdkResolverWithAssemblyPath) },
+                    LoadResolverAssemblyFunc = (resolverPath) =>
+                    {
+                        string resolverFileName = Path.GetFileNameWithoutExtension(resolverPath);
+                        if (resolverFileName.Equals("Microsoft.DotNet.MSBuildSdkResolver", StringComparison.OrdinalIgnoreCase))
+                        {
+                            // Capture test parameters via closure
+                            bool simulatedIsRunningInVS = isRunningInVS;
+                            bool simulatedShouldSucceed = shouldSucceed;
+
+                            if (simulatedIsRunningInVS)
+                            {
+                                // VS behavior: try Assembly.Load directly, no fallback
+                                // We only call Assembly.Load for invalid file case (shouldSucceed=false)
+                                // to test that exception propagates correctly
+                                AssemblyName assemblyName = new AssemblyName(resolverFileName)
+                                {
+                                    CodeBase = resolverPath,
+                                };
+                                // This will throw if file is invalid (no fallback)
+                                return Assembly.Load(assemblyName);
+                            }
+                            else
+                            {
+                                // Non-VS behavior: try Assembly.Load first, fallback to LoadFrom if it fails
+                                // We simulate this without actually calling Assembly.Load or Assembly.LoadFrom
+                                // to avoid side effects from loading Microsoft.Build.dll copy
+                                if (simulatedShouldSucceed)
+                                {
+                                    // Simulate successful fallback: return an existing assembly
+                                    // We use an assembly that's already loaded and contains a valid resolver type
+                                    // to avoid side effects from loading Microsoft.Build.dll copy
+                                    return typeof(MockSdkResolverWithAssemblyPath).Assembly;
+                                }
+                                else
+                                {
+                                    // This branch shouldn't be reached in non-VS + shouldSucceed=false case
+                                    // but if it is, simulate Assembly.Load failure
+                                    throw new BadImageFormatException("Assembly could not be loaded");
+                                }
+                            }
+                        }
+                        return Assembly.LoadFrom(resolverPath);
+                    }
+                };
+
+                if (shouldSucceed)
+                {
+                    // Test that loading succeeds with fallback logic
+                    var resolvers = loader.LoadAllResolvers(new MockElementLocation("file"));
+                    resolvers.ShouldNotBeNull();
+                    resolvers.Count.ShouldBeGreaterThan(0);
+                }
+                else
+                {
+                    // Should throw InvalidProjectFileException because:
+                    // 1. Simulated isRunningInVS = true → no fallback
+                    // 2. Assembly.Load fails on invalid assembly
+                    // 3. No fallback → exception propagates
+                    var exception = Should.Throw<InvalidProjectFileException>(() =>
+                        loader.LoadAllResolvers(new MockElementLocation("file")));
+
+                    exception.Message.ShouldContain("could not be loaded");
+                }
+            }
+        }
+
         private sealed class MockSdkResolverThatDoesNotLoad : SdkResolverBase
         {
             public const string ExpectedMessage = "A8BB8B3131D3475D881ACD3AF8D75BD6";
@@ -435,7 +535,13 @@ private sealed class MockSdkResolverWithAssemblyPath : SdkResolverBase
         {
             public string AssemblyPath;
 
-            public MockSdkResolverWithAssemblyPath(string assemblyPath = "")
+            // Parameterless constructor for reflection-based instantiation
+            public MockSdkResolverWithAssemblyPath()
+                : this("")
+            {
+            }
+
+            public MockSdkResolverWithAssemblyPath(string assemblyPath)
             {
                 AssemblyPath = assemblyPath;
             }