diff --git a/src/Cli/dotnet/commands/dotnet-test/Logger.cs b/src/Cli/dotnet/commands/dotnet-test/Logger.cs
index b3beb944033e..e26bcce5af73 100644
--- a/src/Cli/dotnet/commands/dotnet-test/Logger.cs
+++ b/src/Cli/dotnet/commands/dotnet-test/Logger.cs
@@ -15,6 +15,12 @@ static Logger()
         {
             _traceFilePath = Environment.GetEnvironmentVariable(CliConstants.TestTraceLoggingEnvVar);
             TraceEnabled = !string.IsNullOrEmpty(_traceFilePath);
+
+            string directoryPath = Path.GetDirectoryName(_traceFilePath);
+            if (!string.IsNullOrEmpty(directoryPath))
+            {
+                Directory.CreateDirectory(directoryPath);
+            }
         }
 
         public static void LogTrace(Func<string> messageLog)
diff --git a/test/dotnet-test.Tests/GivenDotnetTestBuildsAndRunsTestsWithDifferentOptions.cs b/test/dotnet-test.Tests/GivenDotnetTestBuildsAndRunsTestsWithDifferentOptions.cs
index daddd60cb705..bc1728942dd7 100644
--- a/test/dotnet-test.Tests/GivenDotnetTestBuildsAndRunsTestsWithDifferentOptions.cs
+++ b/test/dotnet-test.Tests/GivenDotnetTestBuildsAndRunsTestsWithDifferentOptions.cs
@@ -519,5 +519,23 @@ public void RunWithTraceFileLogging_ShouldReturnExitCodeGenericFailure(string co
             result.ExitCode.Should().Be(ExitCode.GenericFailure);
         }
 
+        [InlineData(TestingConstants.Debug)]
+        [InlineData(TestingConstants.Release)]
+        [Theory]
+        public void RunWithTraceFileLoggingAndNonExistingDirectory_ShouldReturnExitCodeGenericFailure(string configuration)
+        {
+            TestAsset testInstance = _testAssetsManager.CopyTestAsset("MultiTestProjectSolutionWithTests", Guid.NewGuid().ToString()).WithSource();
+
+            string traceFile = $"directory_{configuration}{Path.DirectorySeparatorChar}logs.txt";
+            CommandResult result = new DotnetTestCommand(Log, disableNewOutput: false)
+                                    .WithWorkingDirectory(testInstance.Path)
+                                    .WithEnvironmentVariable(CliConstants.TestTraceLoggingEnvVar, traceFile)
+                                    .WithEnableTestingPlatform()
+                                    .Execute(TestingPlatformOptions.ConfigurationOption.Name, configuration);
+
+            Assert.True(File.Exists(Path.Combine(testInstance.Path, traceFile)), "Trace file should exist after test execution.");
+
+            result.ExitCode.Should().Be(ExitCode.GenericFailure);
+        }
     }
 }