diff --git a/vscode/extension/package.json b/vscode/extension/package.json
index c7285ad7c7..1db45abcf4 100644
--- a/vscode/extension/package.json
+++ b/vscode/extension/package.json
@@ -18,7 +18,8 @@
   ],
   "activationEvents": [
     "onLanguage:sql",
-    "onLanguage:python"
+    "onLanguage:python",
+    "onLanguage:yaml"
   ],
   "extensionKind": [
     "workspace"
diff --git a/vscode/extension/src/lsp/lsp.ts b/vscode/extension/src/lsp/lsp.ts
index ccf3981eb2..8195876f48 100644
--- a/vscode/extension/src/lsp/lsp.ts
+++ b/vscode/extension/src/lsp/lsp.ts
@@ -96,7 +96,17 @@ export class LSPClient implements Disposable {
       },
     }
     const clientOptions: LanguageClientOptions = {
-      documentSelector: [{ scheme: 'file', pattern: `**/*.sql` }],
+      documentSelector: [
+        { scheme: 'file', pattern: `**/*.sql` },
+        {
+          scheme: 'file',
+          pattern: '**/external_models.yaml',
+        },
+        {
+          scheme: 'file',
+          pattern: '**/external_models.yml',
+        },
+      ],
       diagnosticCollectionName: 'sqlmesh',
       outputChannel: outputChannel,
     }
diff --git a/vscode/extension/tests/external_models.spec.ts b/vscode/extension/tests/external_models.spec.ts
new file mode 100644
index 0000000000..dc087e836a
--- /dev/null
+++ b/vscode/extension/tests/external_models.spec.ts
@@ -0,0 +1,68 @@
+import os from 'os'
+import { openServerPage, SUSHI_SOURCE_PATH } from './utils'
+import { createPythonInterpreterSettingsSpecifier } from './utils_code_server'
+import { test, expect } from './fixtures'
+import fs from 'fs-extra'
+import path from 'path'
+
+test.describe('External model files trigger lsp', () => {
+  test('external_models.yaml', async ({ page, sharedCodeServer }) => {
+    const file = 'external_models.yaml'
+
+    const tempDir = await fs.mkdtemp(
+      path.join(os.tmpdir(), 'vscode-test-sushi-'),
+    )
+    await fs.copy(SUSHI_SOURCE_PATH, tempDir)
+
+    // Assert external_models.yaml exists
+    const externalModelsYamlPath = path.join(tempDir, file)
+    expect(await fs.pathExists(externalModelsYamlPath)).toBe(true)
+
+    await createPythonInterpreterSettingsSpecifier(tempDir)
+    await openServerPage(page, tempDir, sharedCodeServer)
+
+    // Wait for the models folder to be visible
+    await page.waitForSelector('text=models')
+
+    // Click on the external_models file (e.g., external_models.yaml or external_models.yml)
+    await page
+      .getByRole('treeitem', { name: file, exact: true })
+      .locator('a')
+      .click()
+
+    await page.waitForSelector('text=raw.demographics')
+    await page.waitForSelector('text=Loaded SQLMesh Context')
+  })
+
+  test('external_models.yml', async ({ page, sharedCodeServer }) => {
+    const file = 'external_models.yml'
+
+    const tempDir = await fs.mkdtemp(
+      path.join(os.tmpdir(), 'vscode-test-sushi-'),
+    )
+    await fs.copy(SUSHI_SOURCE_PATH, tempDir)
+
+    // Move external_models.yaml to external_models.yml
+    const externalModelsYamlPath = path.join(tempDir, 'external_models.yaml')
+    const externalModelsYmlPath = path.join(tempDir, file)
+    await fs.rename(externalModelsYamlPath, externalModelsYmlPath)
+
+    // Assert external_models.yml exists
+    expect(await fs.pathExists(externalModelsYmlPath)).toBe(true)
+
+    await createPythonInterpreterSettingsSpecifier(tempDir)
+    await openServerPage(page, tempDir, sharedCodeServer)
+
+    // Wait for the models folder to be visible
+    await page.waitForSelector('text=models')
+
+    // Click on the external_models.yml file
+    await page
+      .getByRole('treeitem', { name: file, exact: true })
+      .locator('a')
+      .click()
+
+    await page.waitForSelector('text=raw.demographics')
+    await page.waitForSelector('text=Loaded SQLMesh Context')
+  })
+})