diff --git a/src/node/proxy_agent.ts b/src/node/proxy_agent.ts
index 416a97868..39607c8da 100644
--- a/src/node/proxy_agent.ts
+++ b/src/node/proxy_agent.ts
@@ -62,7 +62,7 @@ function newProxyAgent(inVSCode: boolean): http.Agent {
 
 // If they have $NO_PROXY set to example.com then this check won't work!
 // But that's drastically unlikely.
-function shouldEnableProxy(): boolean {
+export function shouldEnableProxy(): boolean {
   let shouldEnable = false
 
   const httpProxy = proxyFromEnv.getProxyForUrl(`http://example.com`)
diff --git a/test/unit/node/proxy_agent.test.ts b/test/unit/node/proxy_agent.test.ts
new file mode 100644
index 000000000..9868c19f7
--- /dev/null
+++ b/test/unit/node/proxy_agent.test.ts
@@ -0,0 +1,59 @@
+import { shouldEnableProxy } from "../../../src/node/proxy_agent"
+
+/**
+ * Helper function to set an env variable.
+ *
+ * Returns a function to cleanup the env variable.
+ */
+function setEnv(name: string, value: string) {
+  process.env[name] = value
+
+  return {
+    cleanup() {
+      delete process.env[name]
+    },
+  }
+}
+
+describe("shouldEnableProxy", () => {
+  // Source: https://stackoverflow.com/a/48042799
+  const OLD_ENV = process.env
+
+  beforeEach(() => {
+    jest.resetModules() // Most important - it clears the cache
+    process.env = { ...OLD_ENV } // Make a copy
+  })
+
+  afterAll(() => {
+    process.env = OLD_ENV // Restore old environment
+  })
+
+  it("returns true when HTTP_PROXY is set", () => {
+    const { cleanup } = setEnv("HTTP_PROXY", "http://proxy.example.com")
+    expect(shouldEnableProxy()).toBe(true)
+    cleanup()
+  })
+  it("returns true when HTTPS_PROXY is set", () => {
+    const { cleanup } = setEnv("HTTPS_PROXY", "http://proxy.example.com")
+    expect(shouldEnableProxy()).toBe(true)
+    cleanup()
+  })
+  it("returns false when NO_PROXY is set", () => {
+    const { cleanup } = setEnv("NO_PROXY", "*")
+    expect(shouldEnableProxy()).toBe(false)
+    cleanup()
+  })
+  it("should return false when neither HTTP_PROXY nor HTTPS_PROXY is set", () => {
+    expect(shouldEnableProxy()).toBe(false)
+  })
+  it("should return false when NO_PROXY is set to https://example.com", () => {
+    const { cleanup } = setEnv("NO_PROXY", "https://example.com")
+    expect(shouldEnableProxy()).toBe(false)
+    cleanup()
+  })
+  it("should return false when NO_PROXY is set to http://example.com", () => {
+    const { cleanup } = setEnv("NO_PROXY", "http://example.com")
+    expect(shouldEnableProxy()).toBe(false)
+    cleanup()
+  })
+})