diff --git a/sdk/Sdk/ExtensionsCsprojGenerator.cs b/sdk/Sdk/ExtensionsCsprojGenerator.cs
index 96c66beb1..ad565f787 100644
--- a/sdk/Sdk/ExtensionsCsprojGenerator.cs
+++ b/sdk/Sdk/ExtensionsCsprojGenerator.cs
@@ -10,7 +10,7 @@ namespace Microsoft.Azure.Functions.Worker.Sdk
 {
     internal class ExtensionsCsprojGenerator
     {
-        private const string ExtensionsProjectName = "WorkerExtensions.csproj";
+        internal const string ExtensionsProjectName = "WorkerExtensions.csproj";
 
         private readonly IDictionary<string, string> _extensions;
         private readonly string _outputPath;
@@ -31,9 +31,23 @@ public void Generate()
         {
             var extensionsCsprojFilePath = Path.Combine(_outputPath, ExtensionsProjectName);
 
-            RecreateDirectory(_outputPath);
+            string csproj = GetCsProjContent();
+
+            // Incremental build support: write the new csproj only if contents have changed.
+            // By keeping one from a previous build around, our restore & build has a chance
+            // to follow incremental build and no-op if nothing needs to be done.
+            if (File.Exists(extensionsCsprojFilePath))
+            {
+                string existing = File.ReadAllText(extensionsCsprojFilePath);
+                if (string.Equals(csproj, existing, StringComparison.Ordinal))
+                {
+                    // Up to date, nothing to do.
+                    return;
+                }
+            }
 
-            WriteExtensionsCsProj(extensionsCsprojFilePath);
+            RecreateDirectory(_outputPath);
+            File.WriteAllText(extensionsCsprojFilePath, csproj);
         }
 
         private void RecreateDirectory(string directoryPath)
@@ -46,13 +60,6 @@ private void RecreateDirectory(string directoryPath)
             Directory.CreateDirectory(directoryPath);
         }
 
-        private void WriteExtensionsCsProj(string filePath)
-        {
-            string csprojContent = GetCsProjContent();
-
-            File.WriteAllText(filePath, csprojContent);
-        }
-
         internal string GetCsProjContent()
         {
             string extensionReferences = GetExtensionReferences();
diff --git a/sdk/Sdk/Sdk.csproj b/sdk/Sdk/Sdk.csproj
index 34e2e84e6..081876fce 100644
--- a/sdk/Sdk/Sdk.csproj
+++ b/sdk/Sdk/Sdk.csproj
@@ -3,6 +3,7 @@
   <PropertyGroup>
     <MinorProductVersion>14</MinorProductVersion>
     <PatchProductVersion>0</PatchProductVersion>
+    <VersionSuffix>-preview1</VersionSuffix>
     <TargetFrameworks>netstandard2.0;net472</TargetFrameworks>
     <PackageId>Microsoft.Azure.Functions.Worker.Sdk</PackageId>
     <Description>This package provides development time support for the Azure Functions .NET Worker.</Description>
diff --git a/sdk/Sdk/Targets/Microsoft.Azure.Functions.Worker.Sdk.targets b/sdk/Sdk/Targets/Microsoft.Azure.Functions.Worker.Sdk.targets
index 9974aa5a9..77767d968 100644
--- a/sdk/Sdk/Targets/Microsoft.Azure.Functions.Worker.Sdk.targets
+++ b/sdk/Sdk/Targets/Microsoft.Azure.Functions.Worker.Sdk.targets
@@ -66,14 +66,17 @@ WARNING:  DO NOT MODIFY this file unless you are knowledgeable about MSBuild and
         <Error Condition="'$(_IsFunctionsSdkBuild)' == 'true'" Text="Microsoft.NET.Sdk.Functions package is meant to be used with in-proc function apps. Please remove the reference to this package in isolated function apps."/>
     </Target>
 
-    <Target Name="_FunctionsPostBuild" AfterTargets="AfterBuild" DependsOnTargets="_FunctionsPostBuildNetFx;_FunctionsPostBuildNetApp"/>
-    <!--.NET Framework post build-->
-    <Target Name="_FunctionsPostBuildNetFx" Condition="$(TargetFrameworkIdentifier) == '.NETFramework'">
+    <Target Name="_FunctionsPostBuild" AfterTargets="AfterBuild" DependsOnTargets="_FunctionsGetWorkerExtensionPath;_FunctionsPostBuildNetFx;_FunctionsPostBuildNetApp"/>
+
+    <Target Name="_FunctionsGetWorkerExtensionPath">
         <PropertyGroup>
-            <OutputFile>$(TargetDir)\worker.config.json</OutputFile>
-            <ExtensionsCsProjFilePath>$([System.IO.Path]::Combine($([System.IO.Path]::GetTempPath()), $([System.IO.Path]::GetRandomFileName())))</ExtensionsCsProjFilePath>
+            <_FunctionsWorkerConfigOutputFile>$(TargetDir)\worker.config.json</_FunctionsWorkerConfigOutputFile>
+            <ExtensionsCsProjFilePath Condition="'$(ExtensionsCsProjFilePath)' == ''">$([System.IO.Path]::GetFullPath($(IntermediateOutputPath)WorkExtensions))</ExtensionsCsProjFilePath>
         </PropertyGroup>
+    </Target>
 
+    <!--.NET Framework post build-->
+    <Target Name="_FunctionsPostBuildNetFx" Condition="$(TargetFrameworkIdentifier) == '.NETFramework'">
         <GenerateFunctionMetadata
           AssemblyPath="$(TargetDir)$(AssemblyName).exe"
           ReferencePaths="@(ReferencePath)"
@@ -88,24 +91,20 @@ WARNING:  DO NOT MODIFY this file unless you are knowledgeable about MSBuild and
           Condition="!$(FunctionsEnablePlaceholder)"
           SourceFiles="$(_FunctionsMetadataLoaderExtensionFile)"
           DestinationFolder="$(ExtensionsCsProjFilePath)\buildout"
+          SkipUnchangedFiles="true"
           OverwriteReadOnlyFiles="true" />
 
         <WriteLinesToFile
-            File="$(OutputFile)"
-            Lines="$([System.IO.File]::ReadAllText($(_FunctionsWorkerConfigInputFile))
-                                  .Replace('$functionExe$', '{WorkerRoot}$(TargetName).exe')
-                                  .Replace('$functionWorker$', '$(TargetName).exe')
-                                  .Replace('$enableWorkerIndexing$', '$(FunctionsEnableWorkerIndexing)'))"
-            Overwrite="true" />
+          File="$(_FunctionsWorkerConfigOutputFile)"
+          Lines="$([System.IO.File]::ReadAllText($(_FunctionsWorkerConfigInputFile))
+                                .Replace('$functionExe$', '{WorkerRoot}$(TargetName).exe')
+                                .Replace('$functionWorker$', '$(TargetName).exe')
+                                .Replace('$enableWorkerIndexing$', '$(FunctionsEnableWorkerIndexing)'))"
+          Overwrite="true" />
     </Target>
 
     <!--.NET/.NET Core post build-->
     <Target Name="_FunctionsPostBuildNetApp" Condition="$(TargetFrameworkIdentifier) != '.NETFramework'">
-        <PropertyGroup>
-            <OutputFile>$(TargetDir)\worker.config.json</OutputFile>
-            <ExtensionsCsProjFilePath>$([System.IO.Path]::Combine($([System.IO.Path]::GetTempPath()), $([System.IO.Path]::GetRandomFileName())))</ExtensionsCsProjFilePath>
-        </PropertyGroup>
-
         <GenerateFunctionMetadata
           AssemblyPath="$(TargetDir)$(AssemblyName).dll"
           ReferencePaths="@(ReferencePath)"
@@ -114,31 +113,33 @@ WARNING:  DO NOT MODIFY this file unless you are knowledgeable about MSBuild and
           TargetFrameworkIdentifier="$(TargetFrameworkIdentifier)"
           TargetFrameworkVersion="$(TargetFrameworkVersion)"
           OutputPath="$(TargetDir)"/>
+
         <!-- Do not copy _FunctionsMetadataLoaderExtensionFile when in placeholder mode, as we don't want the FunctionMetadataLoader entry in extensions.json--> 
         <Copy
           Condition="!$(FunctionsEnablePlaceholder)"
           SourceFiles="$(_FunctionsMetadataLoaderExtensionFile)"
           DestinationFolder="$(ExtensionsCsProjFilePath)\buildout"
+          SkipUnchangedFiles="true"
           OverwriteReadOnlyFiles="true" />
 
         <WriteLinesToFile
-            Condition="$(SelfContained)"
-            File="$(OutputFile)"
-            Lines="$([System.IO.File]::ReadAllText($(_FunctionsWorkerConfigInputFile))
-                                  .Replace('$functionExe$', '{WorkerRoot}$(TargetName)')
-                                  .Replace('$functionWorker$', '$(TargetName).dll')
-                                  .Replace('$enableWorkerIndexing$', '$(FunctionsEnableWorkerIndexing)'))"
-        Overwrite="true" />
+          Condition="$(SelfContained)"
+          File="$(_FunctionsWorkerConfigOutputFile)"
+          Lines="$([System.IO.File]::ReadAllText($(_FunctionsWorkerConfigInputFile))
+                                .Replace('$functionExe$', '{WorkerRoot}$(TargetName)')
+                                .Replace('$functionWorker$', '$(TargetName).dll')
+                                .Replace('$enableWorkerIndexing$', '$(FunctionsEnableWorkerIndexing)'))"
+          Overwrite="true" />
 
 
         <WriteLinesToFile
-            Condition="!$(SelfContained)"
-            File="$(OutputFile)"
-            Lines="$([System.IO.File]::ReadAllText($(_FunctionsWorkerConfigInputFile))
-                                  .Replace('$functionExe$', 'dotnet')
-                                  .Replace('$functionWorker$', '$(TargetName).dll')
-                                  .Replace('$enableWorkerIndexing$', '$(FunctionsEnableWorkerIndexing)'))"
-        Overwrite="true" />
+          Condition="!$(SelfContained)"
+          File="$(_FunctionsWorkerConfigOutputFile)"
+          Lines="$([System.IO.File]::ReadAllText($(_FunctionsWorkerConfigInputFile))
+                                .Replace('$functionExe$', 'dotnet')
+                                .Replace('$functionWorker$', '$(TargetName).dll')
+                                .Replace('$enableWorkerIndexing$', '$(FunctionsEnableWorkerIndexing)'))"
+          Overwrite="true" />
 
   </Target>
 
@@ -157,8 +158,8 @@ WARNING:  DO NOT MODIFY this file unless you are knowledgeable about MSBuild and
             <ExtensionRuntimeBinaries Include="$(ExtensionsCsProjFilePath)\buildout\runtimes\**\*.*" />
         </ItemGroup>
 
-        <Copy SourceFiles="@(ExtensionBinaries)" DestinationFolder="$(TargetDir)\.azurefunctions\%(RecursiveDir)" />
-        <Copy SourceFiles="@(ExtensionRuntimeBinaries)" DestinationFolder="$(TargetDir)\.azurefunctions\runtimes\%(RecursiveDir)" />
+        <Copy SourceFiles="@(ExtensionBinaries)" DestinationFolder="$(TargetDir)\.azurefunctions\%(RecursiveDir)" SkipUnchangedFiles="true" />
+        <Copy SourceFiles="@(ExtensionRuntimeBinaries)" DestinationFolder="$(TargetDir)\.azurefunctions\runtimes\%(RecursiveDir)" SkipUnchangedFiles="true" />
     </Target>
 
     <Target Name ="_WorkerExtensionsBuild" AfterTargets="_WorkerExtensionsRestore">
diff --git a/sdk/release_notes.md b/sdk/release_notes.md
index 8b1885c82..ef0f9fa27 100644
--- a/sdk/release_notes.md
+++ b/sdk/release_notes.md
@@ -4,9 +4,12 @@
 - My change description (#PR/#issue)
 -->
 
-### Microsoft.Azure.Functions.Worker.Sdk <version> (meta package)
 
-- <entry>
+### Microsoft.Azure.Functions.Worker.Sdk 1.14.0-preview1
+
+- Improve incremental build support for worker extension project inner build [#1749](https://github.com/Azure/azure-functions-dotnet-worker/pull/1749)
+    - Now builds to intermediate output path
+    - Avoids disk writes for generated .csproj and file copies if nothing has changed
 
 ### Microsoft.Azure.Functions.Worker.Sdk.Analyzers <version> (delete if not updated)
 
diff --git a/test/FunctionMetadataGeneratorTests/ExtensionsCsProjGeneratorTests.cs b/test/FunctionMetadataGeneratorTests/ExtensionsCsProjGeneratorTests.cs
index 1c2014785..05f148941 100644
--- a/test/FunctionMetadataGeneratorTests/ExtensionsCsProjGeneratorTests.cs
+++ b/test/FunctionMetadataGeneratorTests/ExtensionsCsProjGeneratorTests.cs
@@ -1,7 +1,9 @@
 // Copyright (c) .NET Foundation. All rights reserved.
 // Licensed under the MIT License. See License.txt in the project root for license information.
 
+using System;
 using System.Collections.Generic;
+using System.IO;
 using Microsoft.Azure.Functions.Worker.Sdk;
 using Xunit;
 
@@ -9,8 +11,45 @@ namespace Microsoft.Azure.Functions.SdkTests
 {
     public class ExtensionsCsProjGeneratorTests
     {
-        [Fact]
-        public void GetCsProjContent_Succeeds_functions_v3()
+        public enum FuncVersion
+        {
+            V3,
+            V4,
+        }
+
+        [Theory]
+        [InlineData(FuncVersion.V3)]
+        [InlineData(FuncVersion.V4)]
+        public void GetCsProjContent_Succeeds(FuncVersion version)
+        {
+            var generator = GetGenerator(version);
+            string actual = generator.GetCsProjContent().Replace("\r\n", "\n");
+            string expected = ExpectedCsproj(version).Replace("\r\n", "\n");
+            Assert.Equal(expected, actual);
+        }
+
+        [Theory]
+        [InlineData(FuncVersion.V3)]
+        [InlineData(FuncVersion.V4)]
+        public void GetCsProjContent_IncrementalSupport(FuncVersion version)
+        {
+            DateTime RunGenerate(string subPath)
+            {
+                var generator = GetGenerator(version, subPath);
+                generator.Generate();
+
+                var csproj = new FileInfo(Path.Combine(subPath, ExtensionsCsprojGenerator.ExtensionsProjectName));
+                return csproj.LastWriteTimeUtc;
+            }
+
+            string subPath = Guid.NewGuid().ToString();
+            DateTime firstRun = RunGenerate(subPath);
+            DateTime secondRun = RunGenerate(subPath);
+
+            Assert.Equal(firstRun, secondRun);
+        }
+
+        static ExtensionsCsprojGenerator GetGenerator(FuncVersion version, string subPath = "")
         {
             IDictionary<string, string> extensions = new Dictionary<string, string>
             {
@@ -19,13 +58,22 @@ public void GetCsProjContent_Succeeds_functions_v3()
                 { "Microsoft.Azure.WebJobs.Extensions", "2.0.0" },
             };
 
-            var generator = new ExtensionsCsprojGenerator(extensions, "", "v3", Constants.NetCoreApp, Constants.NetCoreVersion31);
-
-            string actualCsproj = generator.GetCsProjContent().Replace("\r\n", "\n");
-
-            Assert.Equal(ExpectedCsProjV3(), actualCsproj);
+            return version switch
+            {
+                FuncVersion.V3 => new ExtensionsCsprojGenerator(extensions, subPath, "v3", Constants.NetCoreApp, Constants.NetCoreVersion31),
+                FuncVersion.V4 => new ExtensionsCsprojGenerator(extensions, subPath, "v4", Constants.NetCoreApp, Constants.NetCoreVersion6),
+                _ => throw new ArgumentOutOfRangeException(nameof(version)),
+            };
         }
 
+        private static string ExpectedCsproj(FuncVersion version)
+            => version switch
+            {
+                FuncVersion.V3 => ExpectedCsProjV3(),
+                FuncVersion.V4 => ExpectedCsProjV4(),
+                _ => throw new ArgumentOutOfRangeException(nameof(version)),
+            };
+
         private static string ExpectedCsProjV3()
         {
             return @"
@@ -52,27 +100,10 @@ private static string ExpectedCsProjV3()
     </ItemGroup>
 </Project>
 ";
-        }
-
-        [Fact]
-        public void GetCsProjContent_Succeeds_functions_v4()
-        {
-            IDictionary<string, string> extensions = new Dictionary<string, string>
-            {
-                { "Microsoft.Azure.WebJobs.Extensions.Storage", "4.0.3" },
-                { "Microsoft.Azure.WebJobs.Extensions.Http", "3.0.0" },
-                { "Microsoft.Azure.WebJobs.Extensions", "2.0.0" },
-            };
-
-            var generator = new ExtensionsCsprojGenerator(extensions, "", "v4", Constants.NetCoreApp, Constants.NetCoreVersion6);
-
-            string actualCsproj = generator.GetCsProjContent().Replace("\r\n", "\n");
-
-            Assert.Equal(ExpectedCsProjV4(), actualCsproj);
-        }
-
-        private static string ExpectedCsProjV4()
-        {
+        }
+
+        private static string ExpectedCsProjV4()
+        {
             return @"
 <Project Sdk=""Microsoft.NET.Sdk"">
     <PropertyGroup>
@@ -96,7 +127,7 @@ private static string ExpectedCsProjV4()
 
     </ItemGroup>
 </Project>
-";
-        }
+";
+        }
     }
 }