diff --git a/src/Razor/src/Microsoft.AspNetCore.Razor.LanguageServer/ProjectSystem/RazorProjectService.cs b/src/Razor/src/Microsoft.AspNetCore.Razor.LanguageServer/ProjectSystem/RazorProjectService.cs
index ba74f7e3503..778059d38a1 100644
--- a/src/Razor/src/Microsoft.AspNetCore.Razor.LanguageServer/ProjectSystem/RazorProjectService.cs
+++ b/src/Razor/src/Microsoft.AspNetCore.Razor.LanguageServer/ProjectSystem/RazorProjectService.cs
@@ -391,10 +391,15 @@ private void UpdateProjectDocuments(
 
             _logger.LogTrace($"Updating document '{newHostDocument.FilePath}''s file kind to '{newHostDocument.FileKind}' and target path to '{newHostDocument.TargetPath}'.");
 
-            var remoteTextLoader = _remoteTextLoaderFactory.Create(newFilePath);
+            // If the physical file name hasn't changed, we use the current document snapshot as the source of truth for text, in case
+            // it has received text change info from LSP. eg, if someone changes the TargetPath of the file while its open in the editor
+            // with unsaved changes, we don't want to reload it from disk.
+            var textLoader = FilePathComparer.Instance.Equals(currentHostDocument.FilePath, newHostDocument.FilePath)
+                ? new DocumentSnapshotTextLoader(documentSnapshot)
+                : _remoteTextLoaderFactory.Create(newFilePath);
 
             updater.DocumentRemoved(currentProjectKey, currentHostDocument);
-            updater.DocumentAdded(currentProjectKey, newHostDocument, remoteTextLoader);
+            updater.DocumentAdded(currentProjectKey, newHostDocument, textLoader);
         }
 
         project = _projectManager.GetLoadedProject(project.Key);
@@ -493,18 +498,27 @@ private void TryMigrateMiscellaneousDocumentsToProject(ProjectSnapshotManager.Up
             }
 
             // Remove from miscellaneous project
-            var defaultMiscProject = miscellaneousProject;
-
-            updater.DocumentRemoved(defaultMiscProject.Key, documentSnapshot.State.HostDocument);
+            updater.DocumentRemoved(miscellaneousProject.Key, documentSnapshot.State.HostDocument);
 
             // Add to new project
 
             var textLoader = new DocumentSnapshotTextLoader(documentSnapshot);
-            var defaultProject = projectSnapshot;
-            var newHostDocument = new HostDocument(documentSnapshot.FilePath, documentSnapshot.TargetPath);
+
+            // If we're moving from the misc files project to a real project, then target path will be the full path to the file
+            // and the next update to the project will update it to be a relative path. To save a bunch of busy work if that is
+            // the only change necessary, we can proactively do that work here. This also means that when we later find out about
+            // this document the "real" way, it will be equal to the one we already know about, and we won't lose content
+            var projectDirectory = FilePathNormalizer.GetNormalizedDirectoryName(projectSnapshot.FilePath);
+            var newTargetPath = documentSnapshot.TargetPath;
+            if (FilePathNormalizer.Normalize(newTargetPath).StartsWith(projectDirectory))
+            {
+                newTargetPath = newTargetPath[projectDirectory.Length..];
+            }
+
+            var newHostDocument = new HostDocument(documentSnapshot.FilePath, newTargetPath, documentSnapshot.FileKind);
             _logger.LogInformation($"Migrating '{documentFilePath}' from the '{miscellaneousProject.Key}' project to '{projectSnapshot.Key}' project.");
 
-            updater.DocumentAdded(defaultProject.Key, newHostDocument, textLoader);
+            updater.DocumentAdded(projectSnapshot.Key, newHostDocument, textLoader);
         }
     }
 
diff --git a/src/Razor/test/Microsoft.AspNetCore.Razor.LanguageServer.Test/RazorProjectServiceTest.cs b/src/Razor/test/Microsoft.AspNetCore.Razor.LanguageServer.Test/RazorProjectServiceTest.cs
index 49ea5dc39a1..a243c9644f5 100644
--- a/src/Razor/test/Microsoft.AspNetCore.Razor.LanguageServer.Test/RazorProjectServiceTest.cs
+++ b/src/Razor/test/Microsoft.AspNetCore.Razor.LanguageServer.Test/RazorProjectServiceTest.cs
@@ -2,6 +2,7 @@
 // Licensed under the MIT license. See License.txt in the project root for license information.
 
 using System;
+using System.Collections.Immutable;
 using System.Linq;
 using System.Threading;
 using System.Threading.Tasks;
@@ -1137,13 +1138,77 @@ await _projectManager.UpdateAsync(updater =>
             x => x.DocumentRemoved(DocumentFilePath2, miscProject.Key));
     }
 
-    private static TextLoader CreateEmptyTextLoader()
+    [Fact]
+    public async Task AddProject_MigratesMiscellaneousDocumentsToNewOwnerProject_FixesTargetPath()
+    {
+        // Arrange
+        const string ProjectFilePath = "C:/path/to/project.csproj";
+        const string IntermediateOutputPath = "C:/path/to/obj";
+        const string DocumentFilePath1 = "C:/path/to/document1.cshtml";
+        const string DocumentFilePath2 = "C:/path/to/document2.cshtml";
+
+        var miscProject = _snapshotResolver.GetMiscellaneousProject();
+
+        await _projectManager.UpdateAsync(updater =>
+        {
+            updater.DocumentAdded(miscProject.Key,
+                new HostDocument(DocumentFilePath1, "C:/path/to/document1.cshtml"), CreateEmptyTextLoader());
+            updater.DocumentAdded(miscProject.Key,
+                new HostDocument(DocumentFilePath2, "C:/path/to/document2.cshtml"), CreateEmptyTextLoader());
+        });
+
+        // Act
+        var newProjectKey = await _projectService.AddProjectAsync(
+            ProjectFilePath, IntermediateOutputPath, RazorConfiguration.Default, rootNamespace: null, displayName: null, DisposalToken);
+
+        // Assert
+        var newProject = _projectManager.GetLoadedProject(newProjectKey);
+        Assert.Equal("document1.cshtml", newProject.GetDocument(DocumentFilePath1)!.TargetPath);
+        Assert.Equal("document2.cshtml", newProject.GetDocument(DocumentFilePath2)!.TargetPath);
+    }
+
+    [Fact]
+    public async Task AddOrUpdateProjectAsync_MigratesMiscellaneousDocumentsToNewOwnerProject_MaintainsTextState()
+    {
+        // Arrange
+        const string ProjectFilePath = "C:/path/to/project.csproj";
+        const string IntermediateOutputPath = "C:/path/to/obj";
+        const string DocumentFilePath1 = "C:/path/to/document1.cshtml";
+
+        var miscProject = _snapshotResolver.GetMiscellaneousProject();
+
+        await _projectManager.UpdateAsync(updater =>
+        {
+            updater.DocumentAdded(miscProject.Key,
+                new HostDocument(DocumentFilePath1, "other/document1.cshtml"), CreateTextLoader(SourceText.From("Hello")));
+        });
+
+        var projectKey = new ProjectKey(IntermediateOutputPath);
+
+        var documentHandles = ImmutableArray.Create(new DocumentSnapshotHandle(DocumentFilePath1, "document1.cshtml", "mvc"));
+
+        // Act
+        await _projectService.AddOrUpdateProjectAsync(
+            projectKey, ProjectFilePath, RazorConfiguration.Default, rootNamespace: null, displayName: null, ProjectWorkspaceState.Default, documentHandles, DisposalToken);
+
+        // Assert
+        var newProject = _projectManager.GetLoadedProject(projectKey);
+        var documentText = await newProject.GetDocument(DocumentFilePath1)!.GetTextAsync();
+        Assert.Equal("Hello", documentText.ToString());
+    }
+
+    private static TextLoader CreateTextLoader(SourceText text)
     {
         var textLoaderMock = new StrictMock<TextLoader>();
         textLoaderMock
             .Setup(x => x.LoadTextAndVersionAsync(It.IsAny<LoadTextOptions>(), It.IsAny<CancellationToken>()))
-            .ReturnsAsync(TextAndVersion.Create(s_emptyText, VersionStamp.Create()));
+            .ReturnsAsync(TextAndVersion.Create(text, VersionStamp.Create()));
 
         return textLoaderMock.Object;
     }
+
+    private static TextLoader CreateEmptyTextLoader()
+    {
+        return CreateTextLoader(s_emptyText);
+    }
 }