diff --git a/client/src/TelemetryClient.ts b/client/src/TelemetryClient.ts
index c52457c8..576ee8d1 100644
--- a/client/src/TelemetryClient.ts
+++ b/client/src/TelemetryClient.ts
@@ -19,6 +19,10 @@ export class TelemetryClient {
   }
 
   static activate(context: ExtensionContext): TelemetryReporter {
+    if (process.env['DBT_LS_DISABLE_TELEMETRY']) {
+      return null;
+    }
+
     var extensionPath = path.join(context.extensionPath, 'package.json');
     var packageJson = JSON.parse(fs.readFileSync(extensionPath, 'utf8'));
 
diff --git a/client/src/test/runTest.ts b/client/src/test/runTest.ts
index 4c706535..779b9f8a 100644
--- a/client/src/test/runTest.ts
+++ b/client/src/test/runTest.ts
@@ -27,7 +27,7 @@ async function main() {
       extensionDevelopmentPath,
       extensionTestsPath,
       launchArgs: [path.resolve(__dirname, '../../test-fixture/')],
-      extensionTestsEnv: { CLI_PATH: cliPath },
+      extensionTestsEnv: { CLI_PATH: cliPath, DBT_LS_DISABLE_TELEMETRY: 'true' },
     });
   } catch (err) {
     console.error('Failed to run tests');