diff --git a/test/integration/037_external_reference_tests/models/my_model.sql b/test/integration/037_external_reference_tests/models/my_model.sql
deleted file mode 100644
index 5d10e607ed7..00000000000
--- a/test/integration/037_external_reference_tests/models/my_model.sql
+++ /dev/null
@@ -1,7 +0,0 @@
-{{
-  config(
-    materialized = "view"
-  )
-}}
-
-select * from "{{ this.schema + 'z' }}"."external"
diff --git a/test/integration/037_external_reference_tests/standalone_models/my_model.sql b/test/integration/037_external_reference_tests/standalone_models/my_model.sql
deleted file mode 100644
index 2cd691ea7b4..00000000000
--- a/test/integration/037_external_reference_tests/standalone_models/my_model.sql
+++ /dev/null
@@ -1,2 +0,0 @@
-
-select 1 as id
diff --git a/test/integration/037_external_reference_tests/test_external_reference.py b/test/integration/037_external_reference_tests/test_external_reference.py
deleted file mode 100644
index d5a7e129e3a..00000000000
--- a/test/integration/037_external_reference_tests/test_external_reference.py
+++ /dev/null
@@ -1,78 +0,0 @@
-from test.integration.base import DBTIntegrationTest, use_profile
-
-class TestExternalReference(DBTIntegrationTest):
-    @property
-    def schema(self):
-        return "external_reference_037"
-
-    @property
-    def models(self):
-        return "models"
-
-    def setUp(self):
-        super().setUp()
-        self.use_default_project()
-        self.external_schema = self.unique_schema()+'z'
-        self.run_sql(
-            'create schema "{}"'.format(self.external_schema)
-        )
-        self.run_sql(
-            'create table "{}"."external" (id integer)'
-            .format(self.external_schema)
-        )
-        self.run_sql(
-            'insert into "{}"."external" values (1), (2)'
-            .format(self.external_schema)
-        )
-
-    def tearDown(self):
-        # This has to happen before we drop the external schema, because
-        # otherwise postgres hangs forever.
-        self._drop_schemas()
-        with self.get_connection():
-            self._drop_schema_named(self.default_database, self.external_schema)
-        super().tearDown()
-
-    @use_profile('postgres')
-    def test__postgres__external_reference(self):
-        self.assertEqual(len(self.run_dbt()), 1)
-        # running it again should succeed
-        self.assertEqual(len(self.run_dbt()), 1)
-
-
-# The opposite of the test above -- check that external relations that
-# depend on a dbt model do not create issues with caching
-class TestExternalDependency(DBTIntegrationTest):
-    @property
-    def schema(self):
-        return "external_dependency_037"
-
-    @property
-    def models(self):
-        return "standalone_models"
-
-    def tearDown(self):
-        # This has to happen before we drop the external schema, because
-        # otherwise postgres hangs forever.
-        self._drop_schemas()
-        with self.get_connection():
-            self._drop_schema_named(self.default_database, self.external_schema)
-        super().tearDown()
-
-    @use_profile('postgres')
-    def test__postgres__external_reference(self):
-        self.assertEqual(len(self.run_dbt()), 1)
-
-        # create a view outside of the dbt schema that depends on this model
-        self.external_schema = self.unique_schema()+'zz'
-        self.run_sql(
-            'create schema "{}"'.format(self.external_schema)
-        )
-        self.run_sql(
-            'create view "{}"."external" as (select * from {}.my_model)'
-            .format(self.external_schema, self.unique_schema())
-        )
-
-        # running it again should succeed
-        self.assertEqual(len(self.run_dbt()), 1)
-
diff --git a/tests/functional/external_reference/test_external_reference.py b/tests/functional/external_reference/test_external_reference.py
new file mode 100644
index 00000000000..50cf7835494
--- /dev/null
+++ b/tests/functional/external_reference/test_external_reference.py
@@ -0,0 +1,57 @@
+import pytest
+
+from dbt.tests.util import run_dbt
+
+
+external_model_sql = """
+{{
+  config(
+    materialized = "view"
+  )
+}}
+
+select * from "{{ this.schema + 'z' }}"."external"
+"""
+
+model_sql = """
+select 1 as id
+"""
+
+
+class TestExternalReference:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {"model.sql": external_model_sql}
+
+    def test_external_reference(self, project, unique_schema):
+        external_schema = unique_schema + 'z'
+        project.run_sql(f'create schema "{external_schema}"')
+        project.run_sql(f'create table "{external_schema}"."external" (id integer)')
+        project.run_sql(f'insert into "{external_schema}"."external" values (1), (2)')
+
+        results = run_dbt(['run'])
+        assert len(results) == 1
+
+        # running it again should succeed
+        results = run_dbt(['run'])
+        assert len(results) == 1
+
+
+# The opposite of the test above -- check that external relations that
+# depend on a dbt model do not create issues with caching
+class TestExternalDependency:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {"model.sql": model_sql}
+
+    def test_external_reference(self, project, unique_schema):
+        results = run_dbt(['run'])
+        assert len(results) == 1
+
+        external_schema = unique_schema + 'z'
+        project.run_sql(f'create schema "{external_schema}"')
+        project.run_sql(f'create view "{external_schema}"."external" as (select * from {unique_schema}.model)')
+
+        # running it again should succeed
+        results = run_dbt(['run'])
+        assert len(results) == 1