diff --git a/src/Microsoft.PowerShell.Commands.Utility/commands/utility/AddType.cs b/src/Microsoft.PowerShell.Commands.Utility/commands/utility/AddType.cs
index a71101f269e..cd5a42413aa 100644
--- a/src/Microsoft.PowerShell.Commands.Utility/commands/utility/AddType.cs
+++ b/src/Microsoft.PowerShell.Commands.Utility/commands/utility/AddType.cs
@@ -763,6 +763,14 @@ internal string GetUsingSet(Language language)
         /// </summary>
         protected override void EndProcessing()
         {
+            // Prevent code compilation in ConstrainedLanguage mode
+            if (SessionState.LanguageMode == PSLanguageMode.ConstrainedLanguage)
+            {
+                ThrowTerminatingError(
+                    new ErrorRecord(
+                        new PSNotSupportedException(AddTypeStrings.CannotDefineNewType), "CannotDefineNewType", ErrorCategory.PermissionDenied, null));
+            }
+
             // Generate an error if they've specified an output
             // assembly type without an output assembly
             if (String.IsNullOrEmpty(outputAssembly) && outputTypeSpecified)
@@ -779,36 +787,6 @@ protected override void EndProcessing()
                 ThrowTerminatingError(errorRecord);
                 return;
             }
-
-            PopulateSource();
-        }
-
-        internal void PopulateSource()
-        {
-            // Prevent code compilation in ConstrainedLanguage mode
-            if (SessionState.LanguageMode == PSLanguageMode.ConstrainedLanguage)
-            {
-                ThrowTerminatingError(
-                    new ErrorRecord(
-                        new PSNotSupportedException(AddTypeStrings.CannotDefineNewType), "CannotDefineNewType", ErrorCategory.PermissionDenied, null));
-            }
-
-            // Load the source if they want to load from a file
-            if (String.Equals(ParameterSetName, "FromPath", StringComparison.OrdinalIgnoreCase) ||
-                String.Equals(ParameterSetName, "FromLiteralPath", StringComparison.OrdinalIgnoreCase)
-                )
-            {
-                sourceCode = "";
-                foreach (string file in paths)
-                {
-                    sourceCode += System.IO.File.ReadAllText(file) + "\n";
-                }
-            }
-
-            if (String.Equals(ParameterSetName, "FromMember", StringComparison.OrdinalIgnoreCase))
-            {
-                sourceCode = GenerateTypeSource(typeNamespace, Name, sourceCode, language);
-            }
         }
 
         internal void HandleCompilerErrors(AddTypeCompilerError[] compilerErrors)
@@ -853,12 +831,12 @@ private void OutputError(AddTypeCompilerError error, string[] actualSource)
             {
                 if (!String.IsNullOrEmpty(error.FileName))
                 {
-                    actualSource = System.IO.File.ReadAllText(error.FileName).Split(Utils.Separators.Newline);
+                    actualSource = System.IO.File.ReadAllLines(error.FileName);
                 }
             }
 
             string errorText = StringUtil.Format(AddTypeStrings.CompilationErrorFormat,
-                        error.FileName, error.Line, error.ErrorText) + "\n";
+                        error.FileName, error.Line, error.ErrorText) + Environment.NewLine;
 
             for (int lineNumber = error.Line - 1; lineNumber < error.Line + 2; lineNumber++)
             {
@@ -876,8 +854,8 @@ private void OutputError(AddTypeCompilerError error, string[] actualSource)
 
                     lineText += actualSource[lineNumber - 1];
 
-                    errorText += "\n" + StringUtil.Format(AddTypeStrings.CompilationErrorFormat,
-                        error.FileName, lineNumber, lineText) + "\n";
+                    errorText += Environment.NewLine + StringUtil.Format(AddTypeStrings.CompilationErrorFormat,
+                        error.FileName, lineNumber, lineText) + Environment.NewLine;
                 }
             }
 
@@ -932,13 +910,35 @@ protected override void EndProcessing()
             {
                 // Load the source if they want to load from a file
                 if (String.Equals(ParameterSetName, "FromPath", StringComparison.OrdinalIgnoreCase) ||
-                    String.Equals(ParameterSetName, "FromLiteralPath", StringComparison.OrdinalIgnoreCase))
+                    String.Equals(ParameterSetName, "FromLiteralPath", StringComparison.OrdinalIgnoreCase)
+                   )
                 {
-                    this.sourceCode = "";
-                    foreach (string file in paths)
+                    if (paths.Length == 1)
                     {
-                        this.sourceCode += System.IO.File.ReadAllText(file) + "\n";
+                        sourceCode = File.ReadAllText(paths[0]);
                     }
+                    else
+                    {
+
+                        // We replace 'ReadAllText' with 'StringBuilder' and 'ReadAllLines'
+                        // to avoide temporary LOH allocations.
+
+                        StringBuilder sb = new StringBuilder(8192);
+
+                        foreach (string file in paths)
+                        {
+                            foreach (string line in File.ReadAllLines(file))
+                            {
+                                sb.AppendLine(line);
+                            }
+                        }
+
+                        sourceCode = sb.ToString();
+                    }
+                }
+                else if (String.Equals(ParameterSetName, "FromMember", StringComparison.OrdinalIgnoreCase))
+                {
+                    sourceCode = GenerateTypeSource(typeNamespace, Name, sourceCode, language);
                 }
 
                 CompileSourceToAssembly(this.sourceCode);
diff --git a/test/powershell/Modules/Microsoft.PowerShell.Utility/Add-Type.Tests.ps1 b/test/powershell/Modules/Microsoft.PowerShell.Utility/Add-Type.Tests.ps1
index e4efeb10f32..b36ce180d51 100644
--- a/test/powershell/Modules/Microsoft.PowerShell.Utility/Add-Type.Tests.ps1
+++ b/test/powershell/Modules/Microsoft.PowerShell.Utility/Add-Type.Tests.ps1
@@ -1,6 +1,38 @@
-$guid = [Guid]::NewGuid().ToString().Replace("-","")
-
 Describe "Add-Type" -Tags "CI" {
+    BeforeAll {
+        $guid = [Guid]::NewGuid().ToString().Replace("-","")
+
+        $code1 = @"
+        namespace Test.AddType
+        {
+            public class BasicTest1
+            {
+                public static int Add1(int a, int b)
+                {
+                    return (a + b);
+                }
+            }
+        }
+"@
+        $code2 = @"
+        namespace Test.AddType
+        {
+            public class BasicTest2
+            {
+                public static int Add2(int a, int b)
+                {
+                    return (a + b);
+                }
+            }
+        }
+"@
+        $codeFile1 = Join-Path -Path $TestDrive -ChildPath "codeFile1.cs"
+        $codeFile2 = Join-Path -Path $TestDrive -ChildPath "codeFile2.cs"
+
+        Set-Content -Path $codeFile1 -Value $code1 -Force
+        Set-Content -Path $codeFile2 -Value $code2 -Force
+    }
+
     It "Public 'Language' enumeration contains all members" {
         [Enum]::GetNames("Microsoft.PowerShell.Commands.Language") -join "," | Should Be "CSharp,CSharpVersion7,CSharpVersion6,CSharpVersion5,CSharpVersion4,CSharpVersion3,CSharpVersion2,CSharpVersion1,VisualBasic,JScript"
     }
@@ -20,4 +52,15 @@ public class AttributeTest$guid {}
     It "Can load TPA assembly System.Runtime.Serialization.Primitives.dll" {
         Add-Type -AssemblyName 'System.Runtime.Serialization.Primitives' -PassThru | Should Not Be $null
     }
+
+    It "Can compile C# files" {
+
+        { [Test.AddType.BasicTest1]::Add1(1, 2) } | Should Throw
+        { [Test.AddType.BasicTest2]::Add2(3, 4) } | Should Throw
+
+        Add-Type -Path $codeFile1,$codeFile2
+
+        { [Test.AddType.BasicTest1]::Add1(1, 2) } | Should Not Throw
+        { [Test.AddType.BasicTest2]::Add2(3, 4) } | Should Not Throw
+    }
 }