diff --git a/src/VisualStudio/Core/Def/Implementation/ProjectSystem/VisualStudioProjectOptionsProcessor.cs b/src/VisualStudio/Core/Def/Implementation/ProjectSystem/VisualStudioProjectOptionsProcessor.cs
index ea8a08b80278ea92e86904aebcf2144776b25f18..759af655e631f3bbb9487d368c29a8f7ca1564da 100644
--- a/src/VisualStudio/Core/Def/Implementation/ProjectSystem/VisualStudioProjectOptionsProcessor.cs
+++ b/src/VisualStudio/Core/Def/Implementation/ProjectSystem/VisualStudioProjectOptionsProcessor.cs
@@ -2,7 +2,9 @@
 using System.Collections.Immutable;
 using System.IO;
 using Microsoft.CodeAnalysis;
+using Microsoft.CodeAnalysis.Editor.Shared.Options;
 using Microsoft.CodeAnalysis.Host;
+using Microsoft.CodeAnalysis.Options;
 using Roslyn.Utilities;
 
 namespace Microsoft.VisualStudio.LanguageServices.Implementation.ProjectSystem
@@ -12,6 +14,7 @@ internal class VisualStudioProjectOptionsProcessor : IDisposable
         private readonly VisualStudioProject _project;
         private readonly HostWorkspaceServices _workspaceServices;
         private readonly ICommandLineParserService _commandLineParserService;
+        private IOptionService _optionService;
 
         /// <summary>
         /// Gate to guard all mutable fields in this class.
@@ -28,11 +31,27 @@ public VisualStudioProjectOptionsProcessor(VisualStudioProject project, HostWork
             _project = project ?? throw new ArgumentNullException(nameof(project));
             _workspaceServices = workspaceServices;
             _commandLineParserService = workspaceServices.GetLanguageServices(project.Language).GetRequiredService<ICommandLineParserService>();
+            _optionService = workspaceServices.GetRequiredService<IOptionService>();
+
+            if (project.Language == LanguageNames.CSharp)
+            {
+                // For C#, we need to listen to the options for NRT analysis 
+                // that can change in VS through tools > options
+                _optionService.OptionChanged += OptionService_OptionChanged;
+            }
 
             // Set up _commandLineArgumentsForCommandLine to a default. No lock taken since we're in the constructor so nothing can race.
             ReparseCommandLine_NoLock();
         }
 
+        private void OptionService_OptionChanged(object sender, OptionChangedEventArgs e)
+        {
+            if (e.Option.Feature == FeatureOnOffOptions.UseNullableReferenceTypes.Feature)
+            {
+                UpdateProjectForNewHostValues();
+            }
+        }
+
         public string CommandLine
         {
             get
@@ -159,6 +178,18 @@ private void UpdateProjectOptions_NoLock()
             compilationOptions = ComputeCompilationOptionsWithHostValues(compilationOptions, this._ruleSetFile?.Target.Value);
             parseOptions = ComputeParseOptionsWithHostValues(parseOptions);
 
+            if (_project.Language == LanguageNames.CSharp)
+            {
+                var useNullableReferenceTypesOption = _optionService.GetOption(FeatureOnOffOptions.UseNullableReferenceTypes);
+
+                parseOptions = useNullableReferenceTypesOption switch
+                {
+                    -1 => parseOptions.WithFeatures(new[] { KeyValuePairUtil.Create("run-nullable-analysis", "false") }),
+                    1 => parseOptions.WithFeatures(new[] { KeyValuePairUtil.Create("run-nullable-analysis", "true") }),
+                    _ => parseOptions
+                };
+            }
+
             // For managed projects, AssemblyName has to be non-null, but the command line we get might be a partial command line
             // and not contain the existing value. Only update if we have one.
             _project.AssemblyName = _commandLineArgumentsForCommandLine.CompilationName ?? _project.AssemblyName;
@@ -225,6 +256,12 @@ public void Dispose()
             lock (_gate)
             {
                 DisposeOfRuleSetFile_NoLock();
+
+                if (_optionService != null)
+                {
+                    _optionService.OptionChanged -= OptionService_OptionChanged;
+                    _optionService = null;
+                }
             }
         }
     }