diff --git a/docs/dev/dev_setup.md b/docs/dev/dev_setup.md
index 183fee3a8b0..29ef44491b1 100644
--- a/docs/dev/dev_setup.md
+++ b/docs/dev/dev_setup.md
@@ -54,7 +54,15 @@ After above setup process is finished. You can use `pytest` command to run test,
 
 ![img4](../media/dev_setup/set_up_vscode_4.png)
 
-3. Click the `Run Test` button on the left
+3. Exclude specific test folders.
+
+You can exclude specific test folders if you don't have some extra dependency to avoid VS Code's test discovery fail.
+For example, if you don't have azure dependency, you can exclude `sdk_cli_azure_test`.
+Open `.vscode/settings.json`, write `"--ignore=src/promptflow/tests/sdk_cli_azure_test"` to `"python.testing.pytestArgs"`.
+
+![img6](../media/dev_setup/set_up_vscode_6.png)
+
+4. Click the `Run Test` button on the left
 
 ![img5](../media/dev_setup/set_up_vscode_5.png)
 
diff --git a/docs/media/dev_setup/set_up_vscode_6.png b/docs/media/dev_setup/set_up_vscode_6.png
new file mode 100644
index 00000000000..a3dc9c1ed00
Binary files /dev/null and b/docs/media/dev_setup/set_up_vscode_6.png differ