diff --git a/.github/actions/infrastructure/path-filters/action.yml b/.github/actions/infrastructure/path-filters/action.yml
index b50384f69..18e78e9a2 100644
--- a/.github/actions/infrastructure/path-filters/action.yml
+++ b/.github/actions/infrastructure/path-filters/action.yml
@@ -112,6 +112,9 @@ runs:
           const globalConfigChanged = files.some(file => file === '.globalconfig' || file === 'nuget.config' || file === 'global.json');
           console.log(`✓ Global config changed: ${globalConfigChanged}`);
 
+          const localizationConfigChanged = files.some(file => file === 'Localize/LocProject.json');
+          console.log(`✓ Localization config changed: ${localizationConfigChanged}`);
+
           const packagingChanged = files.some(file =>
             file === '.github/workflows/windows-ci.yml' ||
             file === '.github/workflows/linux-ci.yml' ||
@@ -128,7 +131,7 @@ runs:
             toolsCiPsm1Changed;
           console.log(`→ Packaging changed: ${packagingChanged}`);
 
-          const source = mainSourceChanged || toolsChanged || githubChanged || propsChanged || testsChanged || globalConfigChanged;
+          const source = mainSourceChanged || toolsChanged || githubChanged || propsChanged || testsChanged || globalConfigChanged || localizationConfigChanged;
           console.log(`→ Source (composite): ${source}`);
 
           core.endGroup();
diff --git a/test/powershell/engine/ResourceValidation/LocProject.Tests.ps1 b/test/powershell/engine/ResourceValidation/LocProject.Tests.ps1
index f8e77c0fb..4f348fa2d 100644
--- a/test/powershell/engine/ResourceValidation/LocProject.Tests.ps1
+++ b/test/powershell/engine/ResourceValidation/LocProject.Tests.ps1
@@ -29,8 +29,18 @@ Describe "LocProject.json file validation" -Tags "CI" {
                 $realSourceFile = Join-Path $repoRoot $sourceFile
 
                 Test-Path -Path $realSourceFile | Should -BeTrue
-                $_.OutputPath | Should -BeExactly "$parentDir\"
-                $_.CopyOption | Should -BeExactly 'LangIDOnPathAndName'
+
+                if ($sourceFile -like '*.resx') {
+                    $_.OutputPath | Should -BeExactly "$parentDir\"
+                    $_.CopyOption | Should -BeExactly 'LangIDOnPathAndName'
+                }
+                elseif ($sourceFile -like '*.xml') {
+                    $_.OutputPath + "en-US" | Should -BeExactly $parentDir
+                    $_.CopyOption | Should -BeExactly 'LangIDOnPath'
+                }
+                else {
+                    throw "Unexpected source file type: $sourceFile"
+                }
             }
     }
 
@@ -38,6 +48,21 @@ Describe "LocProject.json file validation" -Tags "CI" {
         $srcDir = Join-Path $repoRoot 'src'
         $project = $locProject.Projects[0]
 
+        $resxLocItemCount = 0
+        $xmlLocItemCount = 0
+
+        foreach ($item in $project.LocItems) {
+            if ($item.SourceFile -like '*.resx') {
+                $resxLocItemCount++
+            }
+            elseif ($item.SourceFile -like '*.xml') {
+                $xmlLocItemCount++
+            }
+            else {
+                throw "Unexpected source file type: $($item.SourceFile)"
+            }
+        }
+
         try {
             Push-Location -Path $srcDir
             $resDirs = Get-ChildItem 'resources' -Recurse -Directory | ForEach-Object FullName
@@ -48,7 +73,8 @@ Describe "LocProject.json file validation" -Tags "CI" {
                 $totalResourceCount += $count
             }
 
-            $project.LocItems.Count | Should -Be $totalResourceCount
+            $resxLocItemCount | Should -Be $totalResourceCount
+            $xmlLocItemCount | Should -Be 1
         }
         finally {
             Pop-Location