Pytest test discovery is failing. The UI states:

Test discovery error, please check the configuration settings for the tests

The output window states:

Test Discovery failed: 
Error: Traceback (most recent call last):
  File "C:\Users\mikep\.vscode\extensions\ms-python.python-2019.4.11987\pythonFiles\testing_tools\run_adapter.py", line 16, in <module>
    main(tool, cmd, subargs, toolargs)
  File "C:\Users\mikep\.vscode\extensions\ms-python.python-2019.4.11987\pythonFiles\testing_tools\adapter\__main__.py", line 90, in main
    parents, result = run(toolargs, **subargs)
  File "C:\Users\mikep\.vscode\extensions\ms-python.python-2019.4.11987\pythonFiles\testing_tools\adapter\pytest.py", line 43, in discover
    raise Exception('pytest discovery failed (exit code {})'.format(ec))
Exception: pytest discovery failed (exit code 3)

Here are my settings:

{
    "python.pythonPath": ".venv\\Scripts\\python.exe",
    "python.testing.pyTestArgs": [
        "tests"
    ],
    "python.testing.unittestEnabled": false,
    "python.testing.nosetestsEnabled": false,
    "python.testing.pyTestEnabled": true
}

I can run pytest from the command line successfully FWIW.

I resolved the issue by upgrading pytest to the latest version: 4.4.1 with "pip install --upgrade pytest". I was apparently running an old version 3.4.2