diff --git a/.appveyor.yml b/.appveyor.yml
index 5d053697..c8c742c1 100644
--- a/.appveyor.yml
+++ b/.appveyor.yml
@@ -322,12 +322,7 @@ for:
           export TMPDIR=/crippledfs
         fi
       - echo TMPDIR=$TMPDIR
-      # run tests on installed module, not source tree files
-      - mkdir __testhome__
-      # run tests on installed module, not source tree files
-      - |
-        cd __testhome__
-        hatch test --durations 20 -m "not (turtle)" -k "$KEYWORDS" --cov=datalad_next --cov datalad --cov-config=../.coveragerc --pyargs ${DTS}
+      - hatch test --cover --doctest-modules --durations 20 -m "not (turtle)" -k "$KEYWORDS"  --pyargs ${DTS}
 
     after_test:
       - python -m coverage xml
@@ -390,11 +385,8 @@ for:
       - tools\appveyor\verify-ssh-access
 
     test_script:
-      # run tests on installed module, not source tree files
-      - cmd: md __testhome__
-      - cmd: cd __testhome__
-        # run test selection
-      - cmd: hatch test --durations 20 -m "not (turtle)" -k "%KEYWORDS%" --cov=datalad_next --cov-config=..\.coveragerc --pyargs %DTS%
+      # run test selection
+      - cmd: hatch test --cover --doctest-modules --durations 20 -m "not (turtle)" -k "%KEYWORDS%"  --pyargs %DTS%
 
     after_test:
       - cmd: python -m coverage xml
@@ -416,7 +408,5 @@ after_build:
   # Identity setup
   - git config --global user.email "test@appveyor.land"
   - git config --global user.name "Appveyor Almighty"
-  # enable "next" extension for patching datalad core
-  - git config --global datalad.extensions.load next
   # simple call to see if datalad and git-annex are installed properly
-  - datalad wtf
+  - hatch run datalad wtf
diff --git a/pyproject.toml b/pyproject.toml
index 8ea4dc2a..d1d191c8 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -94,6 +94,9 @@ extra-dependencies = [
   "webdavclient3",
   "wsgidav",
 ]
+[tool.hatch.envs.hatch-test.env-vars]
+# load the extention
+DATALAD_EXTENSIONS_LOAD = "next"
 
 [tool.hatch.envs.tests]
 description = "run tests across Python versions"