diff --git a/src/Microsoft.TestPlatform.CommunicationUtilities/TestRequestSender.cs b/src/Microsoft.TestPlatform.CommunicationUtilities/TestRequestSender.cs
index 8361b07208..78d142ace3 100644
--- a/src/Microsoft.TestPlatform.CommunicationUtilities/TestRequestSender.cs
+++ b/src/Microsoft.TestPlatform.CommunicationUtilities/TestRequestSender.cs
@@ -281,9 +281,29 @@ public void CheckVersionWithTestHost()
 
             _channel.Send(data);
 
-            // Wait for negotiation response
+            // Wait for the negotiation response, or for the test host to exit. If the test host exits
+            // before it answers (for example it crashed while deserializing the version check message)
+            // we must stop waiting immediately instead of blocking for the whole connection timeout, and
+            // surface the error it wrote to its standard error rather than a generic timeout message.
             var timeout = EnvironmentHelper.GetConnectionTimeout();
-            if (!protocolNegotiated.WaitOne(timeout * 1000))
+            var waitResult = WaitHandle.WaitAny([protocolNegotiated, _clientExited.WaitHandle], timeout * 1000);
+
+            // The test host process exited before it negotiated the protocol version.
+            if (waitResult == 1)
+            {
+                // Surface the error the test host wrote to its standard error (captured in
+                // OnClientProcessExit) so the user sees the real cause instead of a timeout.
+                var reason = CommonResources.TestHostProcessCrashed;
+                if (!string.IsNullOrWhiteSpace(_clientExitErrorMessage))
+                {
+                    reason = $"{reason} : {_clientExitErrorMessage}";
+                }
+
+                throw new TestPlatformException(reason);
+            }
+
+            // Neither the negotiation response nor the test host exit happened within the timeout.
+            if (waitResult == WaitHandle.WaitTimeout)
             {
                 throw new TestPlatformException(string.Format(CultureInfo.CurrentCulture, CommonResources.VersionCheckTimedout, timeout, EnvironmentHelper.VstestConnectionTimeout));
             }
diff --git a/src/Microsoft.TestPlatform.CrossPlatEngine/EventHandlers/TestRequestHandler.cs b/src/Microsoft.TestPlatform.CrossPlatEngine/EventHandlers/TestRequestHandler.cs
index 0c9fb56ed2..c0c437c43c 100644
--- a/src/Microsoft.TestPlatform.CrossPlatEngine/EventHandlers/TestRequestHandler.cs
+++ b/src/Microsoft.TestPlatform.CrossPlatEngine/EventHandlers/TestRequestHandler.cs
@@ -376,6 +376,13 @@ public void OnMessageReceived(object? sender, MessageReceivedEventArgs messageRe
                     _messageProcessingUnrecoverableError = ex;
                     EqtTrace.Error("Failed processing message {0}, aborting test run.", message.MessageType);
                     EqtTrace.Error(ex);
+
+                    // The protocol version is not negotiated yet, so we cannot report this error back to
+                    // the runner over the communication channel (serializing the response would hit the
+                    // same failure). Write it to standard error instead, so the runner can capture it from
+                    // the test host process output and show the real cause instead of a connection timeout.
+                    WriteToStandardError($"Failed to process {message.MessageType} message in test host: {ex}");
+
                     goto case MessageType.AbortTestRun;
                 }
                 break;
@@ -594,6 +601,13 @@ public void OnMessageReceived(object? sender, MessageReceivedEventArgs messageRe
         }
     }
 
+    // Writes a message to the test host standard error stream. Virtual so tests can observe what the
+    // test host writes to standard error without depending on the process-wide Console.Error stream.
+    internal virtual void WriteToStandardError(string message)
+    {
+        ConsoleOutput.Instance.WriteLine(message, OutputLevel.Error);
+    }
+
     private static ITestCaseEventsHandler? GetTestCaseEventsHandler(string? runSettings)
     {
         ITestCaseEventsHandler? testCaseEventsHandler = null;
diff --git a/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestRequestSenderTests.cs b/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestRequestSenderTests.cs
index f1df84a12d..ad3eedb975 100644
--- a/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestRequestSenderTests.cs
+++ b/test/Microsoft.TestPlatform.CommunicationUtilities.UnitTests/TestRequestSenderTests.cs
@@ -286,6 +286,24 @@ public void CheckVersionWithTestHostShouldThrowIfProtocolNegotiationTimeouts()
         Assert.AreEqual(message, TimoutErrorMessage);
     }
 
+    [TestMethod]
+    public void CheckVersionWithTestHostShouldThrowWithTestHostErrorIfTestHostExitsDuringNegotiation()
+    {
+        // The test host connected but then exited during protocol negotiation, for example it crashed while
+        // deserializing the version check message when reflection-based serialization is disabled (issue #16274).
+        // OnClientProcessExit records the standard error and signals the exit. CheckVersionWithTestHost must stop
+        // waiting immediately and surface that error, instead of blocking for the whole connection timeout and
+        // reporting a generic timeout message.
+        SetupFakeCommunicationChannel();
+        _testRequestSender.OnClientProcessExit("System.InvalidOperationException: Reflection-based serialization has been disabled for this application.");
+
+        var message = Assert.ThrowsExactly<TestPlatformException>(() => _testRequestSender.CheckVersionWithTestHost()).Message;
+
+        Assert.Contains("Test host process crashed", message);
+        Assert.Contains("Reflection-based serialization has been disabled", message);
+        Assert.AreNotEqual(TimoutErrorMessage, message);
+    }
+
     #endregion
 
     #region Discovery Protocol Tests
diff --git a/test/Microsoft.TestPlatform.CrossPlatEngine.UnitTests/EventHandlers/TestRequestHandlerTests.cs b/test/Microsoft.TestPlatform.CrossPlatEngine.UnitTests/EventHandlers/TestRequestHandlerTests.cs
index 8c3a7910c7..05289f46f5 100644
--- a/test/Microsoft.TestPlatform.CrossPlatEngine.UnitTests/EventHandlers/TestRequestHandlerTests.cs
+++ b/test/Microsoft.TestPlatform.CrossPlatEngine.UnitTests/EventHandlers/TestRequestHandlerTests.cs
@@ -169,6 +169,24 @@ public void ProcessRequestsVersionCheckShouldLogErrorIfDiagnosticsEnableFails()
         SendSessionEnd();
     }
 
+    [TestMethod]
+    public void ProcessRequestsVersionCheckFailureShouldWriteErrorToStandardError()
+    {
+        // A VersionCheck payload that is not an int makes DeserializePayload<int> throw, which simulates
+        // the unrecoverable serializer failure the test host hits when reflection-based serialization is
+        // disabled (issue #16274). The protocol version is not negotiated yet, so the error cannot be sent
+        // back over the channel and must instead be written to standard error for the runner to capture.
+        var message = new Message { MessageType = MessageType.VersionCheck, RawMessage = JsonDataSerializer.Instance.SerializePayload(MessageType.VersionCheck, "not-an-int", 1) };
+        ProcessRequestsAsync(_mockTestHostManagerFactory.Object);
+
+        SendMessageOnChannel(message);
+
+        var handler = (TestableTestRequestHandler)_requestHandler;
+        var standardError = string.Join(Environment.NewLine, handler.StandardErrorMessages);
+        Assert.Contains(MessageType.VersionCheck, standardError);
+        SendSessionEnd();
+    }
+
     #endregion
 
     #region Discovery Protocol
@@ -521,6 +539,8 @@ private void VerifyResponseMessageContains(string message)
 
 public class TestableTestRequestHandler : TestRequestHandler
 {
+    public List<string> StandardErrorMessages { get; } = new();
+
     public TestableTestRequestHandler(
         TestHostConnectionInfo testHostConnectionInfo,
         ICommunicationEndpointFactory communicationEndpointFactory,
@@ -536,6 +556,11 @@ public TestableTestRequestHandler(
     {
     }
 
+    internal override void WriteToStandardError(string message)
+    {
+        StandardErrorMessages.Add(message);
+    }
+
     private static void OnLaunchAdapterProcessWithDebuggerAttachedAckReceived(Message message)
     {
         Assert.AreEqual(MessageType.LaunchAdapterProcessWithDebuggerAttachedCallback, message.MessageType);