diff --git a/src/dotnet/ToolPackage/IToolPackageInstaller.cs b/src/dotnet/ToolPackage/IToolPackageInstaller.cs
index c6ef964e1..d54de5460 100644
--- a/src/dotnet/ToolPackage/IToolPackageInstaller.cs
+++ b/src/dotnet/ToolPackage/IToolPackageInstaller.cs
@@ -15,6 +15,7 @@ namespace Microsoft.DotNet.ToolPackage
             VersionRange versionRange = null,
             string targetFramework = null,
             FilePath? nugetConfig = null,
+            DirectoryPath? rootConfigDirectory = null,
             string source = null,
             string verbosity = null);
     }
diff --git a/src/dotnet/ToolPackage/ToolPackageInstaller.cs b/src/dotnet/ToolPackage/ToolPackageInstaller.cs
index 44a51094e..355dabc49 100644
--- a/src/dotnet/ToolPackage/ToolPackageInstaller.cs
+++ b/src/dotnet/ToolPackage/ToolPackageInstaller.cs
@@ -35,6 +35,7 @@ namespace Microsoft.DotNet.ToolPackage
             VersionRange versionRange = null,
             string targetFramework = null,
             FilePath? nugetConfig = null,
+            DirectoryPath? rootConfigDirectory = null,
             string source = null,
             string verbosity = null)
         {
@@ -53,7 +54,8 @@ namespace Microsoft.DotNet.ToolPackage
                             packageId: packageId,
                             versionRange: versionRange,
                             targetFramework: targetFramework ?? BundledTargetFramework.GetTargetFrameworkMoniker(),
-                            restoreDirectory: stageDirectory);
+                            restoreDirectory: stageDirectory,
+                            rootConfigDirectory: rootConfigDirectory);
 
                         try
                         {
@@ -115,7 +117,8 @@ namespace Microsoft.DotNet.ToolPackage
             PackageId packageId,
             VersionRange versionRange,
             string targetFramework,
-            DirectoryPath restoreDirectory)
+            DirectoryPath restoreDirectory,
+            DirectoryPath? rootConfigDirectory)
         {
             var tempProject = _tempProject ?? new DirectoryPath(Path.GetTempPath())
                 .WithSubDirectories(Path.GetRandomFileName())
@@ -135,7 +138,7 @@ namespace Microsoft.DotNet.ToolPackage
                         new XElement("TargetFramework", targetFramework),
                         new XElement("RestorePackagesPath", restoreDirectory.Value),
                         new XElement("RestoreProjectStyle", "DotnetToolReference"), // without it, project cannot reference tool package
-                        new XElement("RestoreRootConfigDirectory", Directory.GetCurrentDirectory()), // config file probing start directory
+                        new XElement("RestoreRootConfigDirectory", rootConfigDirectory?.Value ?? Directory.GetCurrentDirectory()), // config file probing start directory
                         new XElement("DisableImplicitFrameworkReferences", "true"), // no Microsoft.NETCore.App in tool folder
                         new XElement("RestoreFallbackFolders", "clear"), // do not use fallbackfolder, tool package need to be copied to tool folder
                         new XElement("RestoreAdditionalProjectSources", // use fallbackfolder as feed to enable offline
diff --git a/test/Microsoft.DotNet.ToolPackage.Tests/ToolPackageInstallerTests.cs b/test/Microsoft.DotNet.ToolPackage.Tests/ToolPackageInstallerTests.cs
index f08ca6077..b487c7dfb 100644
--- a/test/Microsoft.DotNet.ToolPackage.Tests/ToolPackageInstallerTests.cs
+++ b/test/Microsoft.DotNet.ToolPackage.Tests/ToolPackageInstallerTests.cs
@@ -154,21 +154,17 @@ namespace Microsoft.DotNet.ToolPackage.Tests
         }
 
         [Fact]
-        public void GivenAConfigFileInCurrentDirectoryPackageInstallSucceeds()
+        public void GivenAConfigFileRootDirectoryPackageInstallSucceeds()
         {
             var nugetConfigPath = WriteNugetConfigFileToPointToTheFeed();
 
             var (store, installer, reporter, fileSystem) = Setup(useMock: false);
 
-            /*
-             * In test, we don't want NuGet to keep look up, so we point current directory to nugetconfig.
-             */
-            Directory.SetCurrentDirectory(nugetConfigPath.GetDirectoryPath().Value);
-
             var package = installer.InstallPackage(
                 packageId: TestPackageId,
                 versionRange: VersionRange.Parse(TestPackageVersion),
-                targetFramework: _testTargetframework);
+                targetFramework: _testTargetframework,
+                rootConfigDirectory: nugetConfigPath.GetDirectoryPath());
 
             AssertPackageInstall(reporter, fileSystem, package, store);
 
@@ -641,7 +637,7 @@ namespace Microsoft.DotNet.ToolPackage.Tests
             FilePath? tempProject = null,
             DirectoryPath? offlineFeed = null)
         {
-            var root = new DirectoryPath(Path.Combine(Directory.GetCurrentDirectory(), Path.GetRandomFileName()));
+            var root = new DirectoryPath(Path.Combine(Path.GetFullPath(TempRoot.Root), Path.GetRandomFileName()));
             var reporter = new BufferedReporter();
 
             IFileSystem fileSystem;
diff --git a/test/Microsoft.DotNet.Tools.Tests.ComponentMocks/ToolPackageInstallerMock.cs b/test/Microsoft.DotNet.Tools.Tests.ComponentMocks/ToolPackageInstallerMock.cs
index 9966ddb6a..2d058d6fb 100644
--- a/test/Microsoft.DotNet.Tools.Tests.ComponentMocks/ToolPackageInstallerMock.cs
+++ b/test/Microsoft.DotNet.Tools.Tests.ComponentMocks/ToolPackageInstallerMock.cs
@@ -40,6 +40,7 @@ namespace Microsoft.DotNet.Tools.Tests.ComponentMocks
             VersionRange versionRange = null,
             string targetFramework = null,
             FilePath? nugetConfig = null,
+            DirectoryPath? rootConfigDirectory = null,
             string source = null,
             string verbosity = null)
         {