diff --git a/tests/functional/adapter/test_debug.py b/tests/functional/adapter/test_debug.py
new file mode 100644
index 00000000..84738fbc
--- /dev/null
+++ b/tests/functional/adapter/test_debug.py
@@ -0,0 +1,63 @@
+import os
+import re
+
+import yaml
+from dbt.tests.adapter.dbt_debug.test_dbt_debug import BaseDebug, BaseDebugProfileVariable
+from dbt.tests.util import run_dbt
+
+
+class TestDebugSQLServer(BaseDebug):
+    def test_ok(self, project):
+        run_dbt(["debug"])
+        assert "ERROR" not in self.capsys.readouterr().out
+
+    def test_nopass(self, project):
+        run_dbt(["debug", "--target", "nopass"], expect_pass=False)
+        self.assertGotValue(re.compile(r"\s+profiles\.yml file"), "ERROR invalid")
+
+    def test_wronguser(self, project):
+        run_dbt(["debug", "--target", "wronguser"], expect_pass=False)
+        self.assertGotValue(re.compile(r"\s+Connection test"), "ERROR")
+
+    def test_empty_target(self, project):
+        run_dbt(["debug", "--target", "none_target"], expect_pass=False)
+        self.assertGotValue(re.compile(r"\s+output 'none_target'"), "misconfigured")
+
+
+class TestDebugProfileVariableSQLServer(BaseDebugProfileVariable):
+    pass
+
+
+class TestDebugInvalidProjectSQLServer(BaseDebug):
+    def test_empty_project(self, project):
+        with open("dbt_project.yml", "w") as f:  # noqa: F841
+            pass
+
+        run_dbt(["debug", "--profile", "test"], expect_pass=False)
+        splitout = self.capsys.readouterr().out.split("\n")
+        self.check_project(splitout)
+
+    def test_badproject(self, project):
+        update_project = {"invalid-key": "not a valid key so this is bad project"}
+
+        with open("dbt_project.yml", "w") as f:
+            yaml.safe_dump(update_project, f)
+
+        run_dbt(["debug", "--profile", "test"], expect_pass=False)
+        splitout = self.capsys.readouterr().out.split("\n")
+        self.check_project(splitout)
+
+    def test_not_found_project(self, project):
+        run_dbt(["debug", "--project-dir", "nopass"], expect_pass=False)
+        splitout = self.capsys.readouterr().out.split("\n")
+        self.check_project(splitout, msg="ERROR not found")
+
+    def test_invalid_project_outside_current_dir(self, project):
+        # create a dbt_project.yml
+        project_config = {"invalid-key": "not a valid key in this project"}
+        os.makedirs("custom", exist_ok=True)
+        with open("custom/dbt_project.yml", "w") as f:
+            yaml.safe_dump(project_config, f, default_flow_style=True)
+        run_dbt(["debug", "--project-dir", "custom"], expect_pass=False)
+        splitout = self.capsys.readouterr().out.split("\n")
+        self.check_project(splitout)