diff --git a/.bazelignore b/.bazelignore
index 38444c881d4..025edaf4217 100644
--- a/.bazelignore
+++ b/.bazelignore
@@ -31,7 +31,5 @@ cmd/symbols/squirrel/test_repos/starlark
 cmd/sitemap
 docker-images/syntax-highlighter/crates/sg-syntax/src/snapshots/
 
-lib/codeintel/precise/diff/testdata/
-
 # temporary ignores
 internal/cmd/progress-bot
diff --git a/enterprise/dev/ci/internal/ci/bazel_operations.go b/enterprise/dev/ci/internal/ci/bazel_operations.go
index 0c3e1ad1b9e..9e6456eeeee 100644
--- a/enterprise/dev/ci/internal/ci/bazel_operations.go
+++ b/enterprise/dev/ci/internal/ci/bazel_operations.go
@@ -15,7 +15,7 @@ func BazelOperations() *operations.Set {
 	ops.Append(bazelBuild(
 		"//...",
 	))
-	ops.Append(bazelTest("//monitoring/..."))
+	ops.Append(bazelTest("//monitoring/...", "//lib/..."))
 	return ops
 }
 
diff --git a/lib/codeintel/lsif/conversion/BUILD.bazel b/lib/codeintel/lsif/conversion/BUILD.bazel
index 08a320b1497..52485d337e1 100644
--- a/lib/codeintel/lsif/conversion/BUILD.bazel
+++ b/lib/codeintel/lsif/conversion/BUILD.bazel
@@ -32,6 +32,10 @@ go_test(
         "group_test.go",
         "prune_test.go",
     ],
+    # The testdata folders lives in our parent folder, which cannot be referenced directly.
+    # therefore, we have to create a filegroup with the correct visibility and reference
+    # it manually below.
+    data = ["//lib/codeintel/lsif/testdata:data"], # keep
     embed = [":conversion"],
     deps = [
         "//lib/codeintel/lsif/conversion/datastructures",
diff --git a/lib/codeintel/lsif/testdata/BUILD.bazel b/lib/codeintel/lsif/testdata/BUILD.bazel
new file mode 100644
index 00000000000..a1d1532aed9
--- /dev/null
+++ b/lib/codeintel/lsif/testdata/BUILD.bazel
@@ -0,0 +1,5 @@
+filegroup(
+    name = "data",
+    srcs = glob(["*.lsif"]),
+    visibility = ["//lib/codeintel:__subpackages__"],
+)
diff --git a/lib/codeintel/precise/diff/BUILD.bazel b/lib/codeintel/precise/diff/BUILD.bazel
index de6a5388ac4..56178ef53be 100644
--- a/lib/codeintel/precise/diff/BUILD.bazel
+++ b/lib/codeintel/precise/diff/BUILD.bazel
@@ -1,5 +1,7 @@
 load("@io_bazel_rules_go//go:def.bzl", "go_library", "go_test")
 
+# gazelle:exclude testdata
+
 go_library(
     name = "diff",
     srcs = ["diff.go"],
@@ -15,6 +17,7 @@ go_test(
     name = "diff_test",
     srcs = ["diff_test.go"],
     embed = [":diff"],
+    data = ["//lib/codeintel/precise/diff/testdata:data"],
     deps = [
         "//lib/codeintel/lsif/conversion",
         "//lib/codeintel/precise",
diff --git a/lib/codeintel/precise/diff/diff_test.go b/lib/codeintel/precise/diff/diff_test.go
index cdce00719e0..1805a3d8bbb 100644
--- a/lib/codeintel/precise/diff/diff_test.go
+++ b/lib/codeintel/precise/diff/diff_test.go
@@ -2,6 +2,8 @@ package diff
 
 import (
 	"context"
+	"os"
+	"os/exec"
 	"path/filepath"
 	"testing"
 
@@ -17,6 +19,13 @@ var dumpOldPath = "./testdata/project1/dump-old.lsif"
 var dumpNewPath = "./testdata/project1/dump-new.lsif"
 
 func TestNoDiffOnPermutedDumps(t *testing.T) {
+	cwd, _ := os.Getwd()
+	defer func() { os.Chdir(cwd) }()
+
+	tmpdir1, teardown := createTmpRepo(t, dumpPath)
+	t.Cleanup(teardown)
+	os.Chdir(tmpdir1)
+
 	bundle1, err := conversion.CorrelateLocalGit(
 		context.Background(),
 		dumpPath,
@@ -26,6 +35,10 @@ func TestNoDiffOnPermutedDumps(t *testing.T) {
 		t.Fatalf("Unexpected error reading dump path: %v", err)
 	}
 
+	tmpdir2, teardown := createTmpRepo(t, dumpPermutedPath)
+	t.Cleanup(teardown)
+	os.Chdir(tmpdir2)
+
 	bundle2, err := conversion.CorrelateLocalGit(
 		context.Background(),
 		dumpPermutedPath,
@@ -41,6 +54,13 @@ func TestNoDiffOnPermutedDumps(t *testing.T) {
 }
 
 func TestDiffOnEditedDumps(t *testing.T) {
+	cwd, _ := os.Getwd()
+	defer func() { os.Chdir(cwd) }()
+
+	tmpdir1, teardown := createTmpRepo(t, dumpOldPath)
+	t.Cleanup(teardown)
+	os.Chdir(tmpdir1)
+
 	bundle1, err := conversion.CorrelateLocalGit(
 		context.Background(),
 		dumpOldPath,
@@ -50,6 +70,10 @@ func TestDiffOnEditedDumps(t *testing.T) {
 		t.Fatalf("Unexpected error reading dump: %v", err)
 	}
 
+	tmpdir2, teardown := createTmpRepo(t, dumpNewPath)
+	t.Cleanup(teardown)
+	os.Chdir(tmpdir2)
+
 	bundle2, err := conversion.CorrelateLocalGit(
 		context.Background(),
 		dumpNewPath,
@@ -66,3 +90,39 @@ func TestDiffOnEditedDumps(t *testing.T) {
 
 	autogold.Equal(t, autogold.Raw(computedDiff))
 }
+
+// createTmpRepo returns a temp directory with the testdata copied over from the
+// enclosing folder of path, with a newly initialized git repository.
+func createTmpRepo(t *testing.T, path string) (string, func()) {
+	tmpdir, err := os.MkdirTemp("", "")
+	if err != nil {
+		t.Fatalf("Unexpected error creating dump tmp folder: %v", err)
+	}
+
+	fullpath := filepath.Join(tmpdir, "testdata")
+	os.MkdirAll(fullpath, os.ModePerm)
+
+	if err := exec.Command("cp", "-R", filepath.Dir(path), fullpath).Run(); err != nil {
+		t.Fatalf("Unexpected error copying dump tmp folder: %v", err)
+	}
+
+	gitcmd := exec.Command("git", "init")
+	gitcmd.Dir = tmpdir
+	if err := gitcmd.Run(); err != nil {
+		t.Fatalf("Unexpected error git: %v", err)
+	}
+
+	gitcmd = exec.Command("git", "add", ".")
+	gitcmd.Dir = tmpdir
+	if err := gitcmd.Run(); err != nil {
+		t.Fatalf("Unexpected error git: %v", err)
+	}
+
+	gitcmd = exec.Command("git", "commit", "-m", "initial commit")
+	gitcmd.Dir = tmpdir
+	if err := gitcmd.Run(); err != nil {
+		t.Fatalf("Unexpected error git: %v", err)
+	}
+
+	return tmpdir, func() { os.RemoveAll(tmpdir) }
+}
diff --git a/lib/codeintel/precise/diff/testdata/project1/BUILD.bazel b/lib/codeintel/precise/diff/testdata/project1/BUILD.bazel
deleted file mode 100644
index a78ad670262..00000000000
--- a/lib/codeintel/precise/diff/testdata/project1/BUILD.bazel
+++ /dev/null
@@ -1,9 +0,0 @@
-load("@io_bazel_rules_go//go:def.bzl", "go_library")
-
-go_library(
-    name = "project1",
-    srcs = ["test.go"],
-    importpath = "github.com/sourcegraph/sourcegraph/lib/codeintel/precise/diff/testdata/project1",
-    visibility = ["//visibility:public"],
-    deps = ["@com_github_google_go_cmp//cmp"],
-)