diff --git a/src/SourceBuild/content/Directory.Build.props b/src/SourceBuild/content/Directory.Build.props
index 91df19fb2..25e9e5dad 100644
--- a/src/SourceBuild/content/Directory.Build.props
+++ b/src/SourceBuild/content/Directory.Build.props
@@ -153,6 +153,8 @@
     <ArcadeBootstrapPackageDir Condition="'$(DotNetBuildSourceOnly)' == 'true'">$([MSBuild]::NormalizeDirectory('$(NuGetPackageRoot)', 'ArcadeBootstrapPackage'))</ArcadeBootstrapPackageDir>
     <ArcadeBootstrapPackageDir Condition="'$(DotNetBuildSourceOnly)' != 'true'">$(NuGetPackageRoot)</ArcadeBootstrapPackageDir>
 
+    <VSMSBuildSdkResolversDir>$([MSBuild]::NormalizeDirectory('$(ArtifactsDir)', 'toolset', 'VSSdkResolvers'))</VSMSBuildSdkResolversDir>
+
     <!-- Shared output and intermediate output path folders that are architecture and configuration specific. -->
     <SharedOutputPath>$([MSBuild]::NormalizeDirectory('$(ArtifactsDir)', '$(TargetArchitecture)', '$(Configuration)'))</SharedOutputPath>
     <SharedIntermediateOutputPath>$([MSBuild]::NormalizeDirectory('$(ArtifactsObjDir)', '$(TargetArchitecture)', '$(Configuration)'))</SharedIntermediateOutputPath>
diff --git a/src/SourceBuild/content/eng/tools/init-build.proj b/src/SourceBuild/content/eng/tools/init-build.proj
index f16673ff7..4d6b4d316 100644
--- a/src/SourceBuild/content/eng/tools/init-build.proj
+++ b/src/SourceBuild/content/eng/tools/init-build.proj
@@ -67,7 +67,7 @@
              Properties="MSBuildRestoreSessionId=$([System.Guid]::NewGuid())" />
 
     <MSBuild Projects="tasks\SourceBuild.MSBuildSdkResolver\SourceBuild.MSBuildSdkResolver.csproj"
-             Targets="Build;InstallResolver" />
+             Targets="Build" />
 
     <MakeDir Directories="$(BaseIntermediateOutputPath)" />
     <Touch Files="$(BaseIntermediateOutputPath)BuildMSBuildSdkResolver.complete" AlwaysCreate="true">
@@ -75,6 +75,10 @@
     </Touch>
   </Target>
 
+  <PropertyGroup>
+    <SourceBuildMSBuildSdkResolverManifestPath>$([MSBuild]::NormalizePath('$(VSMSBuildSdkResolversDir)', 'SourceBuild.MSBuildSdkResolver', 'SourceBuild.MSBuildSdkResolver.xml'))</SourceBuildMSBuildSdkResolverManifestPath>
+  </PropertyGroup>
+
   <!-- Build msbuild tasks. -->
   <Target Name="BuildXPlatTasks"
           DependsOnTargets="UnpackTarballs;BuildMSBuildSdkResolver"
diff --git a/src/SourceBuild/content/eng/tools/tasks/SourceBuild.MSBuildSdkResolver/SourceBuild.MSBuildSdkResolver.csproj b/src/SourceBuild/content/eng/tools/tasks/SourceBuild.MSBuildSdkResolver/SourceBuild.MSBuildSdkResolver.csproj
index 04f354465..6cae18884 100644
--- a/src/SourceBuild/content/eng/tools/tasks/SourceBuild.MSBuildSdkResolver/SourceBuild.MSBuildSdkResolver.csproj
+++ b/src/SourceBuild/content/eng/tools/tasks/SourceBuild.MSBuildSdkResolver/SourceBuild.MSBuildSdkResolver.csproj
@@ -4,20 +4,23 @@
     <TargetFramework>netstandard2.0</TargetFramework>
   </PropertyGroup>
 
-  <Target Name="InstallResolver">
-    <PropertyGroup>
-      <SourceBuildMSBuildSdkResolverPath>$([MSBuild]::NormalizePath('$(DotNetRoot)', 'sdk', '$(NETCoreSdkVersion)', 'SdkResolvers', '$(MSBuildProjectName)', '$(MSBuildProjectName).dll'))</SourceBuildMSBuildSdkResolverPath>
-    </PropertyGroup>
-
-    <Copy SourceFiles="$(TargetPath)" DestinationFiles="$(SourceBuildMSBuildSdkResolverPath)" />
-    <Message Text="Adding resolver to SDK: $(MSBuildProjectName) -> $(SourceBuildMSBuildSdkResolverPath)" Importance="High"  />
-  </Target>
-
   <ItemGroup>
-    <PackageReference Include="Microsoft.Build" Version="$(MicrosoftBuildVersion)" />
-    <PackageReference Include="Microsoft.Build.Framework" Version="$(MicrosoftBuildVersion)" />
-    <PackageReference Include="Microsoft.Build.Tasks.Core" Version="$(MicrosoftBuildVersion)" />
-    <PackageReference Include="Microsoft.Build.Utilities.Core" Version="$(MicrosoftBuildVersion)" />
+    <PackageReference Include="Microsoft.Build" Version="$(MicrosoftBuildVersion)" ExcludeAssets="runtime"/>
+    <PackageReference Include="Microsoft.Build.Framework" Version="$(MicrosoftBuildVersion)" ExcludeAssets="runtime" />
+    <PackageReference Include="Microsoft.Build.Tasks.Core" Version="$(MicrosoftBuildVersion)" ExcludeAssets="runtime" />
+    <PackageReference Include="Microsoft.Build.Utilities.Core" Version="$(MicrosoftBuildVersion)" ExcludeAssets="runtime" />
   </ItemGroup>
 
+  <PropertyGroup>
+    <SourceBuildMSBuildSdkResolverManifestPath>$([MSBuild]::NormalizePath('$(VSMSBuildSdkResolversDir)', '$(MSBuildProjectName)', '$(MSBuildProjectName).xml'))</SourceBuildMSBuildSdkResolverManifestPath>
+  </PropertyGroup>
+
+  <Target Name="InstallResolver" BeforeTargets="PrepareForRun">
+    <WriteLinesToFile
+      File="$(SourceBuildMSBuildSdkResolverManifestPath)"
+      Lines="&lt;SdkResolver&gt;&lt;Path&gt;$(TargetPath)&lt;/Path&gt;&lt;/SdkResolver&gt;"
+      Overwrite="true"
+      WriteOnlyWhenDifferent="true" />
+  </Target>
+
 </Project>
diff --git a/src/SourceBuild/content/repo-projects/Directory.Build.targets b/src/SourceBuild/content/repo-projects/Directory.Build.targets
index 9165e7da1..85d576dc3 100644
--- a/src/SourceBuild/content/repo-projects/Directory.Build.targets
+++ b/src/SourceBuild/content/repo-projects/Directory.Build.targets
@@ -586,6 +586,8 @@
   <Target Name="SetSourceBuiltSdkOverrides"
           Condition="'@(SourceBuiltSdkOverride)' != ''">
     <ItemGroup>
+      <!-- Set the environment variables for MSBuild to look for our additional SDK Resolvers and or our resolver to find our source-built SDKs. -->
+      <EnvironmentVariables Include="MSBUILDADDITIONALSDKRESOLVERSFOLDER=$(VSMSBuildSdkResolversDir)" />
       <EnvironmentVariables Include="SOURCE_BUILT_SDK_ID_%(SourceBuiltSdkOverride.Group)=%(SourceBuiltSdkOverride.Identity)" />
       <EnvironmentVariables Include="SOURCE_BUILT_SDK_VERSION_%(SourceBuiltSdkOverride.Group)=%(SourceBuiltSdkOverride.Version)" />
       <EnvironmentVariables Condition="'%(SourceBuiltSdkOverride.Location)' != ''" Include="SOURCE_BUILT_SDK_DIR_%(SourceBuiltSdkOverride.Group)=%(SourceBuiltSdkOverride.Location)/" />