diff --git a/GVFS/GVFS.Common/FileSystem/IKernelDriver.cs b/GVFS/GVFS.Common/FileSystem/IKernelDriver.cs
index 270019da4..35fbdd1c1 100644
--- a/GVFS/GVFS.Common/FileSystem/IKernelDriver.cs
+++ b/GVFS/GVFS.Common/FileSystem/IKernelDriver.cs
@@ -1,4 +1,5 @@
 using GVFS.Common.Tracing;
+using System;
 
 namespace GVFS.Common.FileSystem
 {
@@ -8,7 +9,7 @@ public interface IKernelDriver
         string DriverLogFolderName { get; }
         bool IsSupported(string normalizedEnlistmentRootPath, out string warning, out string error);
         string FlushDriverLogs();
-        bool TryPrepareFolderForCallbacks(string folderPath, out string error);
+        bool TryPrepareFolderForCallbacks(string folderPath, out string error, out Exception exception);
         bool IsReady(JsonTracer tracer, string enlistmentRoot, out string error);
     }
 }
diff --git a/GVFS/GVFS.Platform.Mac/ProjFSKext.cs b/GVFS/GVFS.Platform.Mac/ProjFSKext.cs
index 9adc1d68c..ede5623fc 100644
--- a/GVFS/GVFS.Platform.Mac/ProjFSKext.cs
+++ b/GVFS/GVFS.Platform.Mac/ProjFSKext.cs
@@ -46,8 +46,9 @@ public bool IsReady(JsonTracer tracer, string enlistmentRoot, out string error)
             return true;
         }
 
-        public bool TryPrepareFolderForCallbacks(string folderPath, out string error)
+        public bool TryPrepareFolderForCallbacks(string folderPath, out string error, out Exception exception)
         {
+            exception = null;
             error = string.Empty;
             Result result = VirtualizationInstance.ConvertDirectoryToVirtualizationRoot(folderPath);
             if (result != Result.Success)
diff --git a/GVFS/GVFS.Platform.Windows/ProjFSFilter.cs b/GVFS/GVFS.Platform.Windows/ProjFSFilter.cs
index 544b5678a..3d7b4ce92 100644
--- a/GVFS/GVFS.Platform.Windows/ProjFSFilter.cs
+++ b/GVFS/GVFS.Platform.Windows/ProjFSFilter.cs
@@ -30,6 +30,7 @@ public class ProjFSFilter : IKernelDriver
         private const string FilterLoggerSessionName = "Microsoft-Windows-ProjFS-Filter-Log";
 
         private const string ProjFSNativeLibFileName = "ProjectedFSLib.dll";
+        private const string ProjFSManagedLibFileName = "ProjectedFSLib.Managed.dll";
 
         private const uint OkResult = 0;
         private const uint NameCollisionErrorResult = 0x801F0012;
@@ -320,18 +321,34 @@ public string FlushDriverLogs()
             return sb.ToString();
         }
 
-        public bool TryPrepareFolderForCallbacks(string folderPath, out string error)
+        public bool TryPrepareFolderForCallbacks(string folderPath, out string error, out Exception exception)
         {
-            error = string.Empty;
-            Guid virtualizationInstanceGuid = Guid.NewGuid();
-            HResult result = VirtualizationInstance.ConvertDirectoryToVirtualizationRoot(virtualizationInstanceGuid, folderPath);
-            if (result != HResult.Ok)
+            exception = null;
+            try
             {
-                error = "Failed to prepare \"" + folderPath + "\" for callbacks, error: " + result.ToString("F");
-                return false;
+                return this.TryPrepareFolderForCallbacksImpl(folderPath, out error);
             }
+            catch (FileNotFoundException e)
+            {
+                exception = e;
 
-            return true;
+                if (e.FileName.Equals(ProjFSManagedLibFileName, StringComparison.OrdinalIgnoreCase))
+                {
+                    error = $"Failed to load {ProjFSManagedLibFileName}. Ensure that ProjFS is installed and enabled";
+                }
+                else
+                {
+                    error = $"FileNotFoundException while trying to prepare \"{folderPath}\" for callbacks: {e.Message}";
+                }
+
+                return false;
+            }
+            catch (Exception e)
+            {
+                exception = e;
+                error = $"Exception while trying to prepare \"{folderPath}\" for callbacks: {e.Message}";
+                return false;
+            }
         }
 
         // TODO 1050199: Once the service is an optional component, GVFS should only attempt to attach
@@ -562,7 +579,23 @@ private static EventMetadata CreateEventMetadata(Exception e = null)
         private static ProcessResult CallPowershellCommand(string command)
         {
             return ProcessHelper.Run("powershell.exe", "-NonInteractive -NoProfile -Command \"& { " + command + " }\"");
-        }           
+        }
+
+        // Using an Impl method allows TryPrepareFolderForCallbacks to catch any ProjFS dependency related exceptions
+        // thrown in the process of calling this method.
+        private bool TryPrepareFolderForCallbacksImpl(string folderPath, out string error)
+        {
+            error = string.Empty;
+            Guid virtualizationInstanceGuid = Guid.NewGuid();
+            HResult result = VirtualizationInstance.ConvertDirectoryToVirtualizationRoot(virtualizationInstanceGuid, folderPath);
+            if (result != HResult.Ok)
+            {
+                error = "Failed to prepare \"" + folderPath + "\" for callbacks, error: " + result.ToString("F");
+                return false;
+            }
+
+            return true;
+        }
 
         private static class NativeMethods
         {
diff --git a/GVFS/GVFS/CommandLine/CloneVerb.cs b/GVFS/GVFS/CommandLine/CloneVerb.cs
index 00a429c07..5d86b909f 100644
--- a/GVFS/GVFS/CommandLine/CloneVerb.cs
+++ b/GVFS/GVFS/CommandLine/CloneVerb.cs
@@ -609,10 +609,18 @@ private Result CreateClone(
             }
 
             // Prepare the working directory folder for GVFS last to ensure that gvfs mount will fail if gvfs clone has failed
+            Exception exception;
             string prepFileSystemError;
-            if (!GVFSPlatform.Instance.KernelDriver.TryPrepareFolderForCallbacks(enlistment.WorkingDirectoryRoot, out prepFileSystemError))
+            if (!GVFSPlatform.Instance.KernelDriver.TryPrepareFolderForCallbacks(enlistment.WorkingDirectoryRoot, out prepFileSystemError, out exception))
             {
-                tracer.RelatedError(prepFileSystemError);
+                EventMetadata metadata = new EventMetadata();
+                metadata.Add(nameof(prepFileSystemError), prepFileSystemError);
+                if (exception != null)
+                {
+                    metadata.Add("Exception", exception.ToString());
+                }
+
+                tracer.RelatedError(metadata, $"{nameof(this.CreateClone)}: TryPrepareFolderForCallbacks failed");
                 return new Result(prepFileSystemError);
             }
 
diff --git a/GVFS/GVFS/CommandLine/DehydrateVerb.cs b/GVFS/GVFS/CommandLine/DehydrateVerb.cs
index 71342283a..906745f3c 100644
--- a/GVFS/GVFS/CommandLine/DehydrateVerb.cs
+++ b/GVFS/GVFS/CommandLine/DehydrateVerb.cs
@@ -221,9 +221,18 @@ private void Mount(ITracer tracer)
 
         private void PrepareSrcFolder(ITracer tracer, GVFSEnlistment enlistment)
         {
+            Exception exception;
             string error;
-            if (!GVFSPlatform.Instance.KernelDriver.TryPrepareFolderForCallbacks(enlistment.WorkingDirectoryRoot, out error))
+            if (!GVFSPlatform.Instance.KernelDriver.TryPrepareFolderForCallbacks(enlistment.WorkingDirectoryRoot, out error, out exception))
             {
+                EventMetadata metadata = new EventMetadata();
+                metadata.Add(nameof(error), error);
+                if (exception != null)
+                {
+                    metadata.Add("Exception", exception.ToString());
+                }
+
+                tracer.RelatedError(metadata, $"{nameof(this.PrepareSrcFolder)}: TryPrepareFolderForCallbacks failed");
                 this.ReportErrorAndExit(tracer, "Failed to recreate the virtualization root: " + error);
             }
         }