diff --git a/test/powershell/Modules/Microsoft.PowerShell.Management/FunctionProvider.Tests.ps1 b/test/powershell/Modules/Microsoft.PowerShell.Management/FunctionProvider.Tests.ps1
new file mode 100644
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+++ b/test/powershell/Modules/Microsoft.PowerShell.Management/FunctionProvider.Tests.ps1
@@ -0,0 +1,62 @@
+# Copyright (c) Microsoft Corporation. All rights reserved.
+# Licensed under the MIT License.
+
+Describe "Basic Function Provider Tests" -Tags "CI" {
+    BeforeAll {
+        $existingFunction = "existingFunction"
+        $nonExistingFunction = "nonExistingFunction"
+        $text = "Hello World!"
+        $functionValue = { return $text }
+        $restoreLocation = Get-Location
+        Set-Location Function:
+    }
+
+    AfterAll {
+        Set-Location -Path $restoreLocation
+    }
+
+    Context "Validate Set-Item Cmdlet" {
+        BeforeEach {
+            Set-Item $existingFunction -Options "None" -Value $functionValue
+        }
+
+        AfterEach {
+            Remove-Item $existingFunction -ErrorAction SilentlyContinue -Force
+            Remove-Item $nonexistingFunction -ErrorAction SilentlyContinue -Force
+        }
+
+        It "Sets the new options in existing function" {
+            $newOptions = "ReadOnly, AllScope"
+            (Get-Item $existingFunction).Options | Should -BeExactly "None"
+            Set-Item $existingFunction -Options $newOptions
+            (Get-Item $existingFunction).Options | Should -BeExactly $newOptions
+        }
+
+        It "Sets the options and a value of type ScriptBlock for a new function" {
+            $options = "ReadOnly"
+            Set-Item $nonExistingFunction -Options $options -Value $functionValue
+            $getItemResult = Get-Item $nonExistingFunction
+            $getItemResult.Options | Should -BeExactly $options
+            $getItemResult.ScriptBlock | Should -BeExactly $functionValue
+        }
+
+        It "Removes existing function if Set-Item has no arguments beside function name" {
+            Set-Item $existingFunction
+            $existingFunction | Should -Not -Exist
+        }
+
+        It "Sets a value of type FunctionInfo for a new function" {
+            Set-Item $nonExistingFunction -Value (Get-Item $existingFunction)
+            Invoke-Expression $nonExistingFunction | Should -BeExactly $text
+        }
+
+        It "Sets a value of type String for a new function" {
+            Set-Item $nonExistingFunction -Value "return '$text' "
+            Invoke-Expression $nonExistingFunction | Should -BeExactly $text
+        }
+
+        It "Throws PSArgumentException when Set-Item is called with incorrect function value" {
+            { Set-Item $nonExistingFunction -Value 123 -ErrorAction Stop } | ShouldBeErrorId "Argument,Microsoft.PowerShell.Commands.SetItemCommand"
+        }
+    }
+}