diff --git a/src/client/extensionActivation.ts b/src/client/extensionActivation.ts
index b842440db208..b2c7704812c5 100644
--- a/src/client/extensionActivation.ts
+++ b/src/client/extensionActivation.ts
@@ -17,6 +17,7 @@ import { Commands, PYTHON, PYTHON_LANGUAGE, STANDARD_OUTPUT_CHANNEL, UseProposed
 import { registerTypes as installerRegisterTypes } from './common/installer/serviceRegistry';
 import { traceError } from './common/logger';
 import { registerTypes as platformRegisterTypes } from './common/platform/serviceRegistry';
+import { IFileSystem } from './common/platform/types';
 import { registerTypes as processRegisterTypes } from './common/process/serviceRegistry';
 import { registerTypes as commonRegisterTypes } from './common/serviceRegistry';
 import {
@@ -57,6 +58,7 @@ import { registerTypes as providersRegisterTypes } from './providers/serviceRegi
 import { activateSimplePythonRefactorProvider } from './providers/simpleRefactorProvider';
 import { TerminalProvider } from './providers/terminalProvider';
 import { ISortImportsEditingProvider } from './providers/types';
+import { setExtensionInstallTelemetryProperties } from './telemetry/extensionInstallTelemetry';
 import { registerTypes as commonRegisterTerminalTypes } from './terminals/serviceRegistry';
 import { ICodeExecutionManager, ITerminalAutoActivation } from './terminals/types';
 import { TEST_OUTPUT_CHANNEL } from './testing/common/constants';
@@ -104,6 +106,10 @@ async function activateLegacy(
     platformRegisterTypes(serviceManager);
     processRegisterTypes(serviceManager);
 
+    // We need to setup this property before any telemetry is sent
+    const fs = serviceManager.get<IFileSystem>(IFileSystem);
+    await setExtensionInstallTelemetryProperties(fs);
+
     const applicationEnv = serviceManager.get<IApplicationEnvironment>(IApplicationEnvironment);
     const enableProposedApi = applicationEnv.packageJson.enableProposedApi;
     serviceManager.addSingletonInstance<boolean>(UseProposedApi, enableProposedApi);
diff --git a/src/client/telemetry/extensionInstallTelemetry.ts b/src/client/telemetry/extensionInstallTelemetry.ts
new file mode 100644
index 000000000000..87e6ec50e3ea
--- /dev/null
+++ b/src/client/telemetry/extensionInstallTelemetry.ts
@@ -0,0 +1,33 @@
+// Copyright (c) Microsoft Corporation. All rights reserved.
+// Licensed under the MIT License.
+
+import * as path from 'path';
+import { setSharedProperty } from '.';
+import { IFileSystem } from '../common/platform/types';
+import { EXTENSION_ROOT_DIR } from '../constants';
+
+/**
+ * Sets shared telemetry property about where the extension was installed from
+ * currently we only detect installations from the Python coding pack installer.
+ * Those installations get the 'pythonCodingPack'. Otherwise assume the default
+ * case as 'MarketPlace'.
+ *
+ */
+export async function setExtensionInstallTelemetryProperties(fs: IFileSystem) {
+    // Look for PythonCodingPack file under `%USERPROFILE%/.vscode/extensions`
+    // folder. If that file exists treat this extension as installed from coding
+    // pack.
+    //
+    // Use parent of EXTENSION_ROOT_DIR to access %USERPROFILE%/.vscode/extensions
+    // this is because the installer will add PythonCodingPack to %USERPROFILE%/.vscode/extensions
+    // or %USERPROFILE%/.vscode-insiders/extensions depending on what was installed
+    // previously by the user. If we always join (<home>, .vscode, extensions), we will
+    // end up looking at the wrong place, with respect to the extension that was launched.
+    const fileToCheck = path.join(path.dirname(EXTENSION_ROOT_DIR), 'PythonCodingPack');
+    if (await fs.fileExists(fileToCheck)) {
+        setSharedProperty('installSource', 'pythonCodingPack');
+    } else {
+        // We did not file the `PythonCodingPack` file, assume market place install.
+        setSharedProperty('installSource', 'marketPlace');
+    }
+}
diff --git a/src/client/telemetry/index.ts b/src/client/telemetry/index.ts
index 52294d80c1a5..fc72620503dd 100644
--- a/src/client/telemetry/index.ts
+++ b/src/client/telemetry/index.ts
@@ -332,6 +332,12 @@ export interface ISharedPropertyMapping {
      * For every DS telemetry we would like to know the type of Notebook Editor used when doing something.
      */
     ['ds_notebookeditor']: undefined | 'old' | 'custom' | 'native';
+
+    /**
+     * For every telemetry event from the extension we want to make sure we can associate it with install
+     * source. We took this approach to work around very limiting query performance issues.
+     */
+    ['installSource']: undefined | 'marketPlace' | 'pythonCodingPack';
 }
 
 // Map all events to their properties
diff --git a/src/test/telemetry/extensionInstallTelemetery.unit.test.ts b/src/test/telemetry/extensionInstallTelemetery.unit.test.ts
new file mode 100644
index 000000000000..47e25eca05fa
--- /dev/null
+++ b/src/test/telemetry/extensionInstallTelemetery.unit.test.ts
@@ -0,0 +1,29 @@
+import * as assert from 'assert';
+import * as sinon from 'sinon';
+import { anyString, instance, mock, when } from 'ts-mockito';
+import { FileSystem } from '../../client/common/platform/fileSystem';
+import { IFileSystem } from '../../client/common/platform/types';
+import * as Telemetry from '../../client/telemetry';
+import { setExtensionInstallTelemetryProperties } from '../../client/telemetry/extensionInstallTelemetry';
+
+suite('Extension Install Telemetry', () => {
+    let fs: IFileSystem;
+    let telemetryPropertyStub: sinon.SinonStub;
+    setup(() => {
+        fs = mock(FileSystem);
+        telemetryPropertyStub = sinon.stub(Telemetry, 'setSharedProperty');
+    });
+    teardown(() => {
+        telemetryPropertyStub.restore();
+    });
+    test('PythonCodingPack exists', async () => {
+        when(fs.fileExists(anyString())).thenResolve(true);
+        await setExtensionInstallTelemetryProperties(instance(fs));
+        assert.ok(telemetryPropertyStub.calledOnceWithExactly('installSource', 'pythonCodingPack'));
+    });
+    test('PythonCodingPack does not exists', async () => {
+        when(fs.fileExists(anyString())).thenResolve(false);
+        await setExtensionInstallTelemetryProperties(instance(fs));
+        assert.ok(telemetryPropertyStub.calledOnceWithExactly('installSource', 'marketPlace'));
+    });
+});