diff --git a/extensions/markdown-language-features/src/features/documentLinkProvider.ts b/extensions/markdown-language-features/src/features/documentLinkProvider.ts
index a51df3686b1..1f80e7d5f72 100644
--- a/extensions/markdown-language-features/src/features/documentLinkProvider.ts
+++ b/extensions/markdown-language-features/src/features/documentLinkProvider.ts
@@ -47,7 +47,7 @@ function matchAll(
 }
 
 export default class LinkProvider implements vscode.DocumentLinkProvider {
-	private readonly linkPattern = /(\[[^\]]*\]\(\s*?)(((((?=.*\)\)+)|(?=.*\)\]+))[^\s\)]+?)|([^\s]+?)))\)/g;
+	private readonly linkPattern = /(\[[^\]]*\]\(\s*)((([^\s\(\)]|\(\S*?\))+))\)/g;
 	private readonly referenceLinkPattern = /(\[([^\]]+)\]\[\s*?)([^\s\]]*?)\]/g;
 	private readonly definitionPattern = /^([\t ]*\[([^\]]+)\]:\s*)(\S+)/gm;
 
diff --git a/extensions/markdown-language-features/src/test/documentLinkProvider.test.ts b/extensions/markdown-language-features/src/test/documentLinkProvider.test.ts
index dcaf30ec94d..416ac421766 100644
--- a/extensions/markdown-language-features/src/test/documentLinkProvider.test.ts
+++ b/extensions/markdown-language-features/src/test/documentLinkProvider.test.ts
@@ -25,21 +25,67 @@ function getLinksForFile(fileContents: string) {
 	return provider.provideDocumentLinks(doc, noopToken);
 }
 
+function assertRangeEqual(expected: vscode.Range, actual: vscode.Range) {
+	assert.strictEqual(expected.start.line, actual.start.line);
+	assert.strictEqual(expected.start.character, actual.start.character);
+	assert.strictEqual(expected.end.line, actual.end.line);
+	assert.strictEqual(expected.end.character, actual.end.character);
+}
 
 suite('markdown.DocumentLinkProvider', () => {
-	test('Should not return anything for empty document', async () => {
+	test('Should not return anything for empty document', () => {
 		const links = getLinksForFile('');
 		assert.strictEqual(links.length, 0);
 	});
 
-	test('Should not return anything for simple document without links', async () => {
+	test('Should not return anything for simple document without links', () => {
 		const links = getLinksForFile('# a\nfdasfdfsafsa');
 		assert.strictEqual(links.length, 0);
 	});
 
-	test('Should should detect basic http link', async () => {
+	test('Should detect basic http links', () => {
 		const links = getLinksForFile('a [b](https://example.com) c');
 		assert.strictEqual(links.length, 1);
+		const [link] = links;
+		assertRangeEqual(link.range, new vscode.Range(0, 6, 0, 25));
+	});
+
+	test('Should detect basic workspace links', () => {
+		{
+			const links = getLinksForFile('a [b](./file) c');
+			assert.strictEqual(links.length, 1);
+			const [link] = links;
+			assertRangeEqual(link.range, new vscode.Range(0, 6, 0, 12));
+		}
+		{
+			const links = getLinksForFile('a [b](file.png) c');
+			assert.strictEqual(links.length, 1);
+			const [link] = links;
+			assertRangeEqual(link.range, new vscode.Range(0, 6, 0, 14));
+		}
+	});
+
+	test('Should handle links with balanced parens', () => {
+		{
+			const links = getLinksForFile('a [b](https://example.com/a()c) c');
+			assert.strictEqual(links.length, 1);
+			const [link] = links;
+			assertRangeEqual(link.range, new vscode.Range(0, 6, 0, 30));
+		}
+		{
+			const links = getLinksForFile('a [b](https://example.com/a(b)c) c');
+			assert.strictEqual(links.length, 1);
+			const [link] = links;
+			assertRangeEqual(link.range, new vscode.Range(0, 6, 0, 31));
+		}
+	});
+
+	test('Should handle two links without space', () => {
+		const links = getLinksForFile('a ([test](test)[test2](test2)) c');
+		assert.strictEqual(links.length, 2);
+		const [link1, link2] = links;
+		assertRangeEqual(link1.range, new vscode.Range(0, 10, 0, 14));
+		assertRangeEqual(link2.range, new vscode.Range(0, 23, 0, 28));
 	});
 });