diff --git a/extensions/json-language-features/client/src/jsonMain.ts b/extensions/json-language-features/client/src/jsonMain.ts
index 3c67428f633..bb23670481d 100644
--- a/extensions/json-language-features/client/src/jsonMain.ts
+++ b/extensions/json-language-features/client/src/jsonMain.ts
@@ -119,6 +119,7 @@ export function activate(context: ExtensionContext) {
 	toDispose.push(schemaResolutionErrorStatusBarItem);
 
 	const fileSchemaErrors = new Map<string, string>();
+	let schemaDownloadEnabled = true;
 
 	// Options to control the language client
 	const clientOptions: LanguageClientOptions = {
@@ -139,7 +140,7 @@ export function activate(context: ExtensionContext) {
 				didChangeConfiguration: () => client.sendNotification(DidChangeConfigurationNotification.type, { settings: getSettings() })
 			},
 			handleDiagnostics: (uri: Uri, diagnostics: Diagnostic[], next: HandleDiagnosticsSignature) => {
-				const schemaErrorIndex = diagnostics.findIndex(candidate => candidate.code === /* SchemaResolveError */ 0x300);
+				const schemaErrorIndex = diagnostics.findIndex(isSchemaResolveError);
 
 				if (schemaErrorIndex === -1) {
 					fileSchemaErrors.delete(uri.toString());
@@ -149,6 +150,10 @@ export function activate(context: ExtensionContext) {
 				const schemaResolveDiagnostic = diagnostics[schemaErrorIndex];
 				fileSchemaErrors.set(uri.toString(), schemaResolveDiagnostic.message);
 
+				if (!schemaDownloadEnabled) {
+					diagnostics = diagnostics.filter(d => !isSchemaResolveError(d));
+				}
+
 				if (window.activeTextEditor && window.activeTextEditor.document.uri.toString() === uri.toString()) {
 					schemaResolutionErrorStatusBarItem.show();
 				}
@@ -204,20 +209,19 @@ export function activate(context: ExtensionContext) {
 	toDispose.push(disposable);
 	client.onReady().then(() => {
 		const schemaDocuments: { [uri: string]: boolean } = {};
-		let schemaDownloadEnabled = true;
 
 		// handle content request
 		client.onRequest(VSCodeContentRequest.type, (uriPath: string) => {
 			const uri = Uri.parse(uriPath);
 			if (uri.scheme === 'untitled') {
-				return Promise.reject(new Error(localize('untitled.schema', 'Unable to load {0}', uri.toString())));
+				return Promise.reject(new ResponseError(3, localize('untitled.schema', 'Unable to load {0}', uri.toString())));
 			}
 			if (uri.scheme !== 'http' && uri.scheme !== 'https') {
 				return workspace.openTextDocument(uri).then(doc => {
 					schemaDocuments[uri.toString()] = true;
 					return doc.getText();
 				}, error => {
-					return Promise.reject(error);
+					return Promise.reject(new ResponseError(2, error.toString()));
 				});
 			} else if (schemaDownloadEnabled) {
 				if (telemetryReporter && uri.authority === 'schema.management.azure.com') {
@@ -239,7 +243,7 @@ export function activate(context: ExtensionContext) {
 					return Promise.reject(new ResponseError(error.status, getErrorStatusDescription(error.status) + '\n' + extraInfo));
 				});
 			} else {
-				return Promise.reject(localize('schemaDownloadDisabled', 'Downloading schemas is disabled through setting \'{0}\'', SettingIds.enableSchemaDownload));
+				return Promise.reject(new ResponseError(1, localize('schemaDownloadDisabled', 'Downloading schemas is disabled through setting \'{0}\'', SettingIds.enableSchemaDownload)));
 			}
 		});
 
@@ -280,7 +284,7 @@ export function activate(context: ExtensionContext) {
 				schemaResolutionErrorStatusBarItem.text = '$(watch)';
 				const activeDocUri = window.activeTextEditor.document.uri.toString();
 				client.sendRequest(ForceValidateRequest.type, activeDocUri).then((diagnostics) => {
-					const schemaErrorIndex = diagnostics.findIndex(candidate => candidate.code === /* SchemaResolveError */ 0x300);
+					const schemaErrorIndex = diagnostics.findIndex(isSchemaResolveError);
 					if (schemaErrorIndex !== -1) {
 						// Show schema resolution errors in status bar only; ref: #51032
 						const schemaResolveDiagnostic = diagnostics[schemaErrorIndex];
@@ -546,3 +550,7 @@ function updateMarkdownString(h: MarkdownString): MarkdownString {
 	n.isTrusted = h.isTrusted;
 	return n;
 }
+
+function isSchemaResolveError(d: Diagnostic) {
+	return d.code === /* SchemaResolveError */ 0x300;
+}