diff --git a/CHANGELOG.md b/CHANGELOG.md
index 424d0035..338d6ed0 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,10 @@
 # Changelog
 
+# 7.0.1
+
+- Fixed issues:
+  - Issue: [attempting to get WorkItemItemTypes without a project causes an UnAuthorizedException but the http code is OK #107](https://github.com/hkarthik7/azure-devops-java-sdk/issues/107)
+    - `ErrorResponseHandler` was calling `context.request().getRequestUri()` to build the 401 error message. This triggered a fresh `LocationService` OPTIONS lookup that overwrote `ResponseHandler.apiResponse` with 200 OK, hiding the real 401 from callers of `ResponseHandler.getResponse()`. Fixed by using `context.response().request().uri()` (the URI from the already-sent `HttpResponse`) instead.
 # 7.1.0
 
 - Added support for **Dashboard API**.
diff --git a/azd/src/main/java/org/azd/abstractions/handlers/ErrorResponseHandler.java b/azd/src/main/java/org/azd/abstractions/handlers/ErrorResponseHandler.java
index 93955381..902d86d9 100644
--- a/azd/src/main/java/org/azd/abstractions/handlers/ErrorResponseHandler.java
+++ b/azd/src/main/java/org/azd/abstractions/handlers/ErrorResponseHandler.java
@@ -36,11 +36,15 @@ public CompletableFuture<Void> handleAsync(ResponseContext context) {
         }
 
         if (status == 401) {
+            // Use the URI from the already-sent HttpResponse rather than calling
+            // context.request().getRequestUri(), which triggers a fresh LocationService
+            // lookup (OPTIONS request) that overwrites ResponseHandler.apiResponse with
+            // 200 OK — hiding the real 401 from callers of ResponseHandler.getResponse().
             return CompletableFuture.failedFuture(
                     new AzDException(
                             ApiExceptionTypes.UnAuthorizedException.toString(),
                             "Given token doesn't have access to resource '"
-                                    + context.request().getRequestUri() + "'."
+                                    + context.response().request().uri() + "'."
                     )
             );
         }
diff --git a/azd/src/test/java/org/azd/unittests/WorkItemTrackingRequestBuilderTest.java b/azd/src/test/java/org/azd/unittests/WorkItemTrackingRequestBuilderTest.java
index bbd96308..362cfe01 100644
--- a/azd/src/test/java/org/azd/unittests/WorkItemTrackingRequestBuilderTest.java
+++ b/azd/src/test/java/org/azd/unittests/WorkItemTrackingRequestBuilderTest.java
@@ -7,6 +7,8 @@
 import org.azd.authentication.PersonalAccessTokenCredential;
 import org.azd.common.types.JsonPatchDocument;
 import org.azd.enums.*;
+import org.azd.abstractions.ResponseHandler;
+import org.azd.enums.HttpStatusCode;
 import org.azd.exceptions.AzDException;
 import org.azd.helpers.StreamHelper;
 import org.azd.http.ClientRequest;
@@ -24,6 +26,8 @@
 import java.util.Map;
 
 import static org.junit.Assert.assertEquals;
+import static org.junit.Assert.assertNotEquals;
+import static org.junit.Assert.assertNotNull;
 
 public class WorkItemTrackingRequestBuilderTest {
     private static final SerializerContext serializer = InstanceFactory.createSerializerContext();
@@ -456,4 +460,42 @@ public void shouldUpdateAFormattedCommentForGivenWorkItem() throws AzDException
         w.comments().update("# This is an updated comment.", comment.getId(),
                 2177, CommentFormat.markdown);
     }
+
+    /**
+     * Regression test for issue #107.
+     *
+     * When a 401 is returned (e.g. calling workItemTypes().list() without a project),
+     * ResponseHandler.getResponse() must still reflect the 401 status after the exception
+     * is thrown. Previously, ErrorResponseHandler called context.request().getRequestUri()
+     * to build the error message, which triggered a fresh LocationService OPTIONS call that
+     * overwrote ResponseHandler.apiResponse with 200 OK before the exception reached the
+     * caller.
+     */
+    @Test
+    public void shouldRetainUnauthorizedStatusInResponseHandlerWhenProjectIsAbsent() {
+        String dir = System.getProperty("user.dir");
+        var file = new File(dir + "/src/test/java/org/azd/_unitTest.json");
+        MockParameters m;
+        try {
+            m = InstanceFactory.createSerializerContext().deserialize(file, MockParameters.class);
+        } catch (AzDException e) {
+            return; // skip if config not available
+        }
+        // Build a client WITHOUT project — mirrors the reporter's code in issue #107.
+        var pat = new PersonalAccessTokenCredential(
+                Instance.BASE_INSTANCE.append(m.getO()), m.getT());
+        var noProjectClient = AzDService.builder().authentication(pat).buildClient();
+
+        try {
+            noProjectClient.workItemTracking().workItemTypes().list();
+        } catch (AzDException e) {
+            // Exception is expected. The key assertion: ResponseHandler must NOT have
+            // been overwritten with 200 OK by the internal location-discovery request.
+            var response = ResponseHandler.getResponse();
+            assertNotNull("ResponseHandler.getResponse() must not be null after a failed call", response);
+            assertNotEquals(
+                    "ResponseHandler.getResponse() must not be OK after a 401 — issue #107",
+                    HttpStatusCode.OK, response.getStatusCode());
+        }
+    }
 }