diff --git a/packages/zowe-explorer/CHANGELOG.md b/packages/zowe-explorer/CHANGELOG.md
index e9e87e8e00..f740058a41 100644
--- a/packages/zowe-explorer/CHANGELOG.md
+++ b/packages/zowe-explorer/CHANGELOG.md
@@ -8,6 +8,7 @@ All notable changes to the "vscode-extension-for-zowe" extension will be documen
 
 - Update Zowe SDKs to `8.2.0` to get the latest enhancements from Imperative.
 - Added expired JSON web token detection for profiles in each tree view (Data Sets, USS, Jobs). When a user performs a search on a profile, they are prompted to log in if their token expired. [#3175](https://github.com/zowe/zowe-explorer-vscode/issues/3175)
+- Add Data Set or USS resources to a virtual workspace with the new "Add to Workspace" context menu option. [#3265](https://github.com/zowe/zowe-explorer-vscode/issues/3265)
 
 ### Bug fixes
 
diff --git a/packages/zowe-explorer/__tests__/__mocks__/vscode.ts b/packages/zowe-explorer/__tests__/__mocks__/vscode.ts
index 5c32ad9803..0f9e3ad87a 100644
--- a/packages/zowe-explorer/__tests__/__mocks__/vscode.ts
+++ b/packages/zowe-explorer/__tests__/__mocks__/vscode.ts
@@ -1320,6 +1320,23 @@ export namespace workspace {
     export function onDidOpenTextDocument<T>(listener: (e: T) => any, thisArgs?: any, disposables?: Disposable[]) {}
     export function onDidSaveTextDocument<T>(listener: (e: T) => any, thisArgs?: any, disposables?: Disposable[]) {}
 
+    export function updateWorkspaceFolders(
+        start: number,
+        deleteCount: number | undefined | null,
+        ...workspaceFoldersToAdd: {
+            /**
+             * The uri of a workspace folder that's to be added.
+             */
+            readonly uri: Uri;
+            /**
+             * The name of a workspace folder that's to be added.
+             */
+            readonly name?: string;
+        }[]
+    ): boolean {
+        return false;
+    }
+
     export function getConfiguration(configuration: string) {
         return {
             update: () => {
diff --git a/packages/zowe-explorer/__tests__/__unit__/trees/shared/SharedUtils.unit.test.ts b/packages/zowe-explorer/__tests__/__unit__/trees/shared/SharedUtils.unit.test.ts
index 181ee8c6a9..c874c19c3b 100644
--- a/packages/zowe-explorer/__tests__/__unit__/trees/shared/SharedUtils.unit.test.ts
+++ b/packages/zowe-explorer/__tests__/__unit__/trees/shared/SharedUtils.unit.test.ts
@@ -25,6 +25,7 @@ import { SharedUtils } from "../../../../src/trees/shared/SharedUtils";
 import { ZoweUSSNode } from "../../../../src/trees/uss/ZoweUSSNode";
 import { AuthUtils } from "../../../../src/utils/AuthUtils";
 import { SharedTreeProviders } from "../../../../src/trees/shared/SharedTreeProviders";
+import { MockedProperty } from "../../../__mocks__/mockUtils";
 
 function createGlobalMocks() {
     const newMocks = {
@@ -551,3 +552,44 @@ describe("Shared utils unit tests - function parseFavorites", () => {
         expect(warnSpy).toHaveBeenCalledWith("Failed to parse a saved favorite. Attempted to parse: [testProfile]: ");
     });
 });
+
+describe("Shared utils unit tests - function addToWorkspace", () => {
+    it("adds a Data Set resource to the workspace", () => {
+        const datasetNode = new ZoweDatasetNode({
+            label: "EXAMPLE.DS",
+            collapsibleState: vscode.TreeItemCollapsibleState.None,
+            contextOverride: Constants.DS_DS_CONTEXT,
+            profile: createIProfile(),
+        });
+        const updateWorkspaceFoldersMock = jest.spyOn(vscode.workspace, "updateWorkspaceFolders").mockImplementation();
+        SharedUtils.addToWorkspace(datasetNode, null as any);
+        expect(updateWorkspaceFoldersMock).toHaveBeenCalledWith(0, null, { uri: datasetNode.resourceUri, name: datasetNode.label as string });
+    });
+    it("adds a USS resource to the workspace", () => {
+        const ussNode = new ZoweUSSNode({
+            label: "textFile.txt",
+            collapsibleState: vscode.TreeItemCollapsibleState.None,
+            contextOverride: Constants.USS_TEXT_FILE_CONTEXT,
+            profile: createIProfile(),
+        });
+        const updateWorkspaceFoldersMock = jest.spyOn(vscode.workspace, "updateWorkspaceFolders").mockImplementation();
+        SharedUtils.addToWorkspace(ussNode, null as any);
+        expect(updateWorkspaceFoldersMock).toHaveBeenCalledWith(0, null, { uri: ussNode.resourceUri, name: ussNode.label as string });
+    });
+    it("skips adding a resource that's already in the workspace", () => {
+        const ussNode = new ZoweUSSNode({
+            label: "textFile.txt",
+            collapsibleState: vscode.TreeItemCollapsibleState.None,
+            contextOverride: Constants.USS_TEXT_FILE_CONTEXT,
+            profile: createIProfile(),
+        });
+        const workspaceFolders = new MockedProperty(vscode.workspace, "workspaceFolders", {
+            value: [{ uri: ussNode.resourceUri, name: ussNode.label }],
+        });
+        const updateWorkspaceFoldersMock = jest.spyOn(vscode.workspace, "updateWorkspaceFolders").mockImplementation();
+        updateWorkspaceFoldersMock.mockClear();
+        SharedUtils.addToWorkspace(ussNode, null as any);
+        expect(updateWorkspaceFoldersMock).not.toHaveBeenCalledWith(0, null, { uri: ussNode.resourceUri, name: ussNode.label as string });
+        workspaceFolders[Symbol.dispose]();
+    });
+});
diff --git a/packages/zowe-explorer/package.json b/packages/zowe-explorer/package.json
index 14ea967bbc..d9a4acd568 100644
--- a/packages/zowe-explorer/package.json
+++ b/packages/zowe-explorer/package.json
@@ -211,6 +211,11 @@
           "light": "./resources/light/favorites-open-light.svg"
         }
       },
+      {
+        "command": "zowe.addToWorkspace",
+        "title": "%addToWorkspace%",
+        "category": "Zowe Explorer"
+      },
       {
         "command": "zowe.ds.addSession",
         "title": "%addSession%",
@@ -839,6 +844,11 @@
           "command": "zowe.removeFavorite",
           "group": "003_zowe_ussWorkspace@1"
         },
+        {
+          "when": "view == zowe.uss.explorer && viewItem =~ /^(textFile.*|binaryFile.*|directory.*)/",
+          "command": "zowe.addToWorkspace",
+          "group": "003_zowe_ussWorkspace@2"
+        },
         {
           "when": "view == zowe.uss.explorer && viewItem =~ /^(?!.*_fav.*)ussSession.*/ && !listMultiSelection",
           "command": "zowe.addFavorite",
@@ -1009,6 +1019,11 @@
           "command": "zowe.removeFavorite",
           "group": "002_zowe_dsWorkspace@1"
         },
+        {
+          "when": "view == zowe.ds.explorer && viewItem =~ /^(pds|ds|migr|member).*/",
+          "command": "zowe.addToWorkspace",
+          "group": "003_zowe_dsWorkspace@2"
+        },
         {
           "when": "view == zowe.ds.explorer && viewItem == profile_fav && !listMultiSelection",
           "command": "zowe.removeFavProfile",
diff --git a/packages/zowe-explorer/package.nls.json b/packages/zowe-explorer/package.nls.json
index b21aa2e228..690853c3a1 100644
--- a/packages/zowe-explorer/package.nls.json
+++ b/packages/zowe-explorer/package.nls.json
@@ -20,6 +20,7 @@
   "diff.overwrite": "Overwrite",
   "diff.useRemote": "Use Remote",
   "addFavorite": "Add to Favorites",
+  "addToWorkspace": "Add to Workspace",
   "removeFavProfile": "Remove profile from Favorites",
   "addSession": "Add Profile to Data Sets View",
   "createDataset": "Create New Data Set",
diff --git a/packages/zowe-explorer/src/trees/shared/SharedInit.ts b/packages/zowe-explorer/src/trees/shared/SharedInit.ts
index daefdba139..6ba16e4e19 100644
--- a/packages/zowe-explorer/src/trees/shared/SharedInit.ts
+++ b/packages/zowe-explorer/src/trees/shared/SharedInit.ts
@@ -214,6 +214,7 @@ export class SharedInit {
                     }
                 })
             );
+            context.subscriptions.push(vscode.commands.registerCommand("zowe.addToWorkspace", SharedUtils.addToWorkspace));
             context.subscriptions.push(
                 vscode.commands.registerCommand("zowe.removeFavProfile", (node: IZoweTreeNode) =>
                     SharedTreeProviders.getProviderForNode(node).removeFavProfile(node.label as string, true)
diff --git a/packages/zowe-explorer/src/trees/shared/SharedUtils.ts b/packages/zowe-explorer/src/trees/shared/SharedUtils.ts
index 0288f84d91..2f9a6a6bea 100644
--- a/packages/zowe-explorer/src/trees/shared/SharedUtils.ts
+++ b/packages/zowe-explorer/src/trees/shared/SharedUtils.ts
@@ -287,4 +287,28 @@ export class SharedUtils {
     public static getSessionLabel(node: IZoweTreeNode): string {
         return (SharedContext.isSession(node) ? node : node.getSessionNode()).label as string;
     }
+
+    /**
+     * Adds one or more Data Sets/USS nodes to a workspace.
+     * @param node Single node selection
+     * @param nodeList List of selected nodes
+     */
+    public static addToWorkspace(
+        this: void,
+        node: IZoweUSSTreeNode | IZoweDatasetTreeNode,
+        nodeList: IZoweUSSTreeNode[] | IZoweDatasetTreeNode[]
+    ): void {
+        const workspaceFolders = vscode.workspace.workspaceFolders;
+        const selectedNodes = SharedUtils.getSelectedNodeList(node, nodeList);
+        for (const item of selectedNodes) {
+            if (workspaceFolders?.some((folder) => folder.uri === item.resourceUri)) {
+                continue;
+            }
+
+            vscode.workspace.updateWorkspaceFolders(workspaceFolders?.length ?? 0, null, {
+                uri: item.resourceUri,
+                name: item.label as string,
+            });
+        }
+    }
 }