diff --git a/.vscode/launch.json b/.vscode/launch.json
new file mode 100644
index 0000000..80f55a9
--- /dev/null
+++ b/.vscode/launch.json
@@ -0,0 +1,38 @@
+{
+  "version": "0.2.0",
+  "configurations": [
+    {
+      "name": "Python: Debug Tests",
+      "type": "debugpy",
+      "request": "launch",
+      "program": "${file}",
+      "purpose": [
+        "debug-test"
+      ],
+      "console": "integratedTerminal",
+      "justMyCode": false,
+      "env": {
+        "PYTEST_ADDOPTS": "--no-cov"
+      }
+    },
+    {
+      "name": "Python: Current File",
+      "type": "debugpy",
+      "request": "launch",
+      "program": "${file}",
+      "console": "integratedTerminal",
+      "justMyCode": true
+    },
+    {
+      "name": "Python: API Server",
+      "type": "debugpy",
+      "request": "launch",
+      "module": "alpine_bits_python.run_api",
+      "console": "integratedTerminal",
+      "justMyCode": true,
+      "env": {
+        "ALPINEBITS_CONFIG_DIR": "${workspaceFolder}/config"
+      }
+    }
+  ]
+}
\ No newline at end of file
diff --git a/.vscode/settings.json b/.vscode/settings.json
index 35d9ae1..6d1f9e5 100644
--- a/.vscode/settings.json
+++ b/.vscode/settings.json
@@ -18,7 +18,17 @@
   "notebook.output.wordWrap": true,
   "notebook.output.textLineLimit": 200,
   "jupyter.debugJustMyCode": false,
+  "python.defaultInterpreterPath": "./.venv/bin/python",
   "python.testing.pytestEnabled": true,
+  "python.testing.pytestArgs": [
+    "tests",
+    "-v",
+    "--tb=short"
+  ],
+  "python.testing.pytestPath": "./.venv/bin/pytest",
+  "python.testing.unittestEnabled": false,
+  "python.testing.autoTestDiscoverOnSaveEnabled": true,
+  "python.testing.cwd": "${workspaceFolder}",
   "files.exclude": {
     "**/*.egg-info": true,
     "**/htmlcov": true,
@@ -27,27 +37,6 @@
     "**/.venv": true,
     "**/__pycache__": true,
     "**/.mypy_cache": true,
-    "**/.pytest_cache": true,
+    "**/.pytest_cache": true
   }
-}
-
-// .vscode/launch.json
-{
-  "version": "0.2.0",
-  "configurations": [
-    {
-      "name": "Python: Debug Tests",
-      "type": "debugpy",
-      "request": "launch",
-      "program": "${file}",
-      "purpose": [
-        "debug-test"
-      ],
-      "console": "integratedTerminal",
-      "justMyCode": false,
-      "env": {
-        "PYTEST_ADDOPTS": "--no-cov"
-      }
-    }
-  ]
 }
\ No newline at end of file
diff --git a/conftest.py b/conftest.py
new file mode 100644
index 0000000..81266b7
--- /dev/null
+++ b/conftest.py
@@ -0,0 +1,13 @@
+"""Pytest configuration and path setup for VS Code.
+
+This configuration file ensures that VS Code can properly discover and run tests
+by setting up the Python path to include the src directory.
+"""
+
+import sys
+from pathlib import Path
+
+# Add the src directory to Python path for VS Code test discovery
+src_path = Path(__file__).parent / "src"
+if str(src_path) not in sys.path:
+    sys.path.insert(0, str(src_path))