diff --git a/extensions/schema-compare/src/dialogs/schemaCompareDialog.ts b/extensions/schema-compare/src/dialogs/schemaCompareDialog.ts
index 5417b8aa62..68d5ad5e77 100644
--- a/extensions/schema-compare/src/dialogs/schemaCompareDialog.ts
+++ b/extensions/schema-compare/src/dialogs/schemaCompareDialog.ts
@@ -9,6 +9,8 @@ import * as azdata from 'azdata';
 import * as vscode from 'vscode';
 import * as os from 'os';
 import { SchemaCompareResult } from '../schemaCompareResult';
+import { isNullOrUndefined } from 'util';
+import { existsSync } from 'fs';
 
 const localize = nls.loadMessageBundle();
 const OkButtonText: string = localize('schemaCompareDialog.ok', 'Ok');
@@ -76,6 +78,7 @@ export class SchemaCompareDialog {
 		this.initializeDialog();
 
 		this.dialog.okButton.label = OkButtonText;
+		this.dialog.okButton.enabled = false;
 		this.dialog.okButton.onClick(async () => await this.execute());
 
 		this.dialog.cancelButton.label = CancelButtonText;
@@ -147,10 +150,18 @@ export class SchemaCompareDialog {
 				width: 275
 			}).component();
 
+			this.sourceTextBox.onTextChanged((e) => {
+				this.dialog.okButton.enabled = this.shouldEnableOkayButton();
+			});
+
 			this.targetTextBox = view.modelBuilder.inputBox().withProperties({
 				width: 275
 			}).component();
 
+			this.targetTextBox.onTextChanged(() => {
+				this.dialog.okButton.enabled = this.shouldEnableOkayButton();
+			});
+
 			this.sourceServerComponent = await this.createSourceServerDropdown(view);
 			await this.populateServerDropdown(false);
 
@@ -288,6 +299,7 @@ export class SchemaCompareDialog {
 			this.formBuilder.removeFormItem(this.sourceServerComponent);
 			this.formBuilder.removeFormItem(this.sourceDatabaseComponent);
 			this.formBuilder.insertFormItem(this.sourceDacpacComponent, 2, { horizontal: true, titleFontSize: titleFontSize });
+			this.dialog.okButton.enabled = this.shouldEnableOkayButton();
 		});
 
 		// show server and db dropdowns or 'No active connections' text
@@ -300,6 +312,7 @@ export class SchemaCompareDialog {
 				this.formBuilder.insertFormItem(this.sourceNoActiveConnectionsText, 2, { horizontal: true, titleFontSize: titleFontSize });
 			}
 			this.formBuilder.removeFormItem(this.sourceDacpacComponent);
+			this.dialog.okButton.enabled = this.shouldEnableOkayButton();
 		});
 
 		if (this.database) {
@@ -340,6 +353,7 @@ export class SchemaCompareDialog {
 			this.formBuilder.removeFormItem(this.targetServerComponent);
 			this.formBuilder.removeFormItem(this.targetDatabaseComponent);
 			this.formBuilder.addFormItem(this.targetDacpacComponent, { horizontal: true, titleFontSize: titleFontSize });
+			this.dialog.okButton.enabled = this.shouldEnableOkayButton();
 		});
 
 		// show server and db dropdowns or 'No active connections' text
@@ -352,6 +366,7 @@ export class SchemaCompareDialog {
 			} else {
 				this.formBuilder.addFormItem(this.targetNoActiveConnectionsText, { horizontal: true, titleFontSize: titleFontSize });
 			}
+			this.dialog.okButton.enabled = this.shouldEnableOkayButton();
 		});
 
 		dacpacRadioButton.checked = true;
@@ -367,6 +382,17 @@ export class SchemaCompareDialog {
 		};
 	}
 
+	private shouldEnableOkayButton(): boolean {
+		let sourcefilled = (this.sourceIsDacpac && this.existsDacpac(this.sourceTextBox.value)) || (!this.sourceIsDacpac && !isNullOrUndefined(this.sourceDatabaseDropdown.value));
+		let targetfilled = (this.targetIsDacpac && this.existsDacpac(this.targetTextBox.value)) || (!this.targetIsDacpac && !isNullOrUndefined(this.targetDatabaseDropdown.value));
+
+		return sourcefilled && targetfilled;
+	}
+
+	private existsDacpac(filename: string): boolean {
+		return !isNullOrUndefined(filename) && existsSync(filename) && (filename.toLocaleLowerCase().endsWith('.dacpac'));
+	}
+
 	protected async createSourceServerDropdown(view: azdata.ModelView): Promise<azdata.FormComponent> {
 		this.sourceServerDropdown = view.modelBuilder.dropDown().component();
 		this.sourceServerDropdown.onValueChanged(async () => {
@@ -454,6 +480,9 @@ export class SchemaCompareDialog {
 
 	protected async createSourceDatabaseDropdown(view: azdata.ModelView): Promise<azdata.FormComponent> {
 		this.sourceDatabaseDropdown = view.modelBuilder.dropDown().component();
+		this.sourceDatabaseDropdown.onValueChanged(() => {
+			this.dialog.okButton.enabled = this.shouldEnableOkayButton();
+		});
 
 		return {
 			component: this.sourceDatabaseDropdown,
@@ -463,6 +492,9 @@ export class SchemaCompareDialog {
 
 	protected async createTargetDatabaseDropdown(view: azdata.ModelView): Promise<azdata.FormComponent> {
 		this.targetDatabaseDropdown = view.modelBuilder.dropDown().component();
+		this.targetDatabaseDropdown.onValueChanged(() => {
+			this.dialog.okButton.enabled = this.shouldEnableOkayButton();
+		});
 
 		return {
 			component: this.targetDatabaseDropdown,