diff --git a/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/META-INF/MANIFEST.MF b/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/META-INF/MANIFEST.MF
index de829ec95e..ad378e61fd 100644
--- a/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/META-INF/MANIFEST.MF
+++ b/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/META-INF/MANIFEST.MF
@@ -8,4 +8,5 @@ Bundle-Version: 0.1.0.qualifier
 Fragment-Host: com.google.cloud.tools.eclipse.sdk.ui
 Require-Bundle: com.google.cloud.tools.eclipse.test.dependencies
 Import-Package: com.google.cloud.tools.eclipse.test.util,
- com.google.cloud.tools.eclipse.test.util.ui
+ com.google.cloud.tools.eclipse.test.util.ui,
+ org.eclipse.swtbot.swt.finder.widgets
diff --git a/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/src/com/google/cloud/tools/eclipse/sdk/ui/CloudSdkPreferenceAreaTest.java b/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/src/com/google/cloud/tools/eclipse/sdk/ui/CloudSdkPreferenceAreaTest.java
index 360a64d0dd..8d652ebf9e 100644
--- a/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/src/com/google/cloud/tools/eclipse/sdk/ui/CloudSdkPreferenceAreaTest.java
+++ b/plugins/com.google.cloud.tools.eclipse.sdk.ui.test/src/com/google/cloud/tools/eclipse/sdk/ui/CloudSdkPreferenceAreaTest.java
@@ -31,9 +31,13 @@
 import com.google.cloud.tools.eclipse.test.util.ui.ShellTestResource;
 import org.eclipse.core.runtime.IStatus;
 import org.eclipse.jface.preference.IPreferenceStore;
+import org.eclipse.swt.events.SelectionEvent;
+import org.eclipse.swt.events.SelectionListener;
 import org.eclipse.swt.widgets.Button;
+import org.eclipse.swt.widgets.Display;
 import org.eclipse.swt.widgets.Shell;
 import org.eclipse.swt.widgets.Text;
+import org.eclipse.swtbot.swt.finder.widgets.SWTBotCheckBox;
 import org.junit.After;
 import org.junit.Rule;
 import org.junit.Test;
@@ -76,8 +80,7 @@ public void testNonExistentPath() {
 
   @Test
   public void testInvalidPath() {
-    when(preferences.getString(CloudSdkPreferences.CLOUD_SDK_PATH))
-        .thenReturn(tempFolder.getRoot().getAbsolutePath());
+    when(preferences.getString(CloudSdkPreferences.CLOUD_SDK_PATH)).thenReturn(tempFolder.getRoot().getAbsolutePath());
     createPreferenceArea();
     assertEquals(IStatus.WARNING, area.getStatus().getSeverity());
 
@@ -153,4 +156,21 @@ public void testPerformApply_preferencesSaved() {
 
     verify(preferences).putValue(CloudSdkPreferences.CLOUD_SDK_MANAGEMENT, "MANUAL");
   }
+
+  @Test
+  public void testValidationStatus_switchManagementOption() {
+    CloudSdkManager.forceManagedSdkFeature = true;
+    when(preferences.getString(CloudSdkPreferences.CLOUD_SDK_MANAGEMENT)).thenReturn("MANUAL");
+    when(preferences.getString(CloudSdkPreferences.CLOUD_SDK_PATH)).thenReturn("/non-existing/directory");
+    createPreferenceArea();
+
+    assertTrue(useLocalSdk.getSelection());
+    assertEquals(IStatus.ERROR, area.getStatus().getSeverity());
+
+    new SWTBotCheckBox(useLocalSdk).click();
+    assertTrue(area.getStatus().isOK());
+
+    new SWTBotCheckBox(useLocalSdk).click();
+    assertEquals(IStatus.ERROR, area.getStatus().getSeverity());
+  }
 }
diff --git a/plugins/com.google.cloud.tools.eclipse.sdk.ui/src/com/google/cloud/tools/eclipse/sdk/ui/preferences/CloudSdkPreferenceArea.java b/plugins/com.google.cloud.tools.eclipse.sdk.ui/src/com/google/cloud/tools/eclipse/sdk/ui/preferences/CloudSdkPreferenceArea.java
index 0717313625..a2b2bee449 100644
--- a/plugins/com.google.cloud.tools.eclipse.sdk.ui/src/com/google/cloud/tools/eclipse/sdk/ui/preferences/CloudSdkPreferenceArea.java
+++ b/plugins/com.google.cloud.tools.eclipse.sdk.ui/src/com/google/cloud/tools/eclipse/sdk/ui/preferences/CloudSdkPreferenceArea.java
@@ -44,6 +44,7 @@
 import org.eclipse.swt.SWT;
 import org.eclipse.swt.events.SelectionAdapter;
 import org.eclipse.swt.events.SelectionEvent;
+import org.eclipse.swt.events.SelectionListener;
 import org.eclipse.swt.widgets.Button;
 import org.eclipse.swt.widgets.Composite;
 import org.eclipse.swt.widgets.Control;
@@ -93,6 +94,13 @@ public void widgetSelected(SelectionEvent event) {
       useLocalSdk.addSelectionListener(new SelectionAdapter() {
         @Override
         public void widgetSelected(SelectionEvent e) {
+          if (!useLocalSdk.getSelection()) {
+            status = Status.OK_STATUS;
+          } else {
+            sdkLocation.doCheckState();
+          }
+          fireValueChanged(VALUE, "", "");
+
           updateControlEnablement();
         }
       });