diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index ed910f9fdbe4..df26e7113594 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -74,6 +74,8 @@ Use the `Extension` launch option.
 
 ### Running Unit Tests
 
+Note: Unit tests are those in files with extension `.unit.test.ts`.
+
 1. Make sure you have compiled all code (done automatically when using incremental building)
 1. Ensure you have disabled breaking into 'Uncaught Exceptions' when running the Unit Tests
 1. For the linters and formatters tests to pass successfully, you will need to have those corresponding Python libraries installed locally
@@ -97,8 +99,20 @@ Alter the `launch.json` file in the `"Debug Unit Tests"` section by setting the
 ```
 ...this will only run the suite with the tests you care about during a test run (be sure to set the debugger to run the `Debug Unit Tests` launcher).
 
+### Running Functional Tests
+
+Functional tests are those in files with extension `.functional.test.ts`.
+These tests are similar to system tests in scope, but are run like unit tests.
+
+You can run functional tests in a similar way to that for unit tests:
+
+* via the "Functional Tests" launch option, or
+* on the command line via `npm run test:functional`
+
 ### Running System Tests
 
+Note: System tests are those in files with extension `.test*.ts` but which are neither `.functional.test.ts` nor `.unit.test.ts`.
+
 1. Make sure you have compiled all code (done automatically when using incremental building)
 1. Ensure you have disabled breaking into 'Uncaught Exceptions' when running the Unit Tests
 1. For the linters and formatters tests to pass successfully, you will need to have those corresponding Python libraries installed locally by using the `./requirements.txt` and `build/test-requirements.txt` files