diff --git a/plugins/azure-devops/src/components/ReadmeCard/ReadmeCard.tsx b/plugins/azure-devops/src/components/ReadmeCard/ReadmeCard.tsx
index d9afe8db5a..420fe6ecf4 100644
--- a/plugins/azure-devops/src/components/ReadmeCard/ReadmeCard.tsx
+++ b/plugins/azure-devops/src/components/ReadmeCard/ReadmeCard.tsx
@@ -23,11 +23,9 @@ import {
   ErrorPanel,
 } from '@backstage/core-components';
 import { useEntity } from '@backstage/plugin-catalog-react';
-import { useApi } from '@backstage/core-plugin-api';
 import React from 'react';
-import { azureDevOpsApiRef } from '../../api';
-import useAsync from 'react-use/lib/useAsync';
-import { getAnnotationValuesFromEntity } from '../../utils';
+
+import { useReadme } from '../../hooks';
 
 const useStyles = makeStyles(theme => ({
   readMe: {
@@ -85,16 +83,9 @@ const ReadmeCardError = ({ error }: ErrorProps) => {
 
 export const ReadmeCard = (props: Props) => {
   const classes = useStyles();
-  const api = useApi(azureDevOpsApiRef);
   const { entity } = useEntity();
-  const { project, repo } = getAnnotationValuesFromEntity(entity);
 
-  const { loading, error, value } = useAsync(async () => {
-    if (repo) {
-      return await api.getReadme({ project, repo });
-    }
-    return undefined;
-  }, [api, project, repo, entity]);
+  const { loading, error, item: value } = useReadme(entity);
 
   if (loading) {
     return <Progress />;
diff --git a/plugins/azure-devops/src/hooks/index.ts b/plugins/azure-devops/src/hooks/index.ts
index 0b745ba586..ab1a3c9998 100644
--- a/plugins/azure-devops/src/hooks/index.ts
+++ b/plugins/azure-devops/src/hooks/index.ts
@@ -20,3 +20,4 @@ export * from './usePullRequests';
 export * from './useRepoBuilds';
 export * from './useUserEmail';
 export * from './useUserTeamIds';
+export * from './useReadme';
diff --git a/plugins/azure-devops/src/hooks/useReadme.test.tsx b/plugins/azure-devops/src/hooks/useReadme.test.tsx
new file mode 100644
index 0000000000..ffc33c136b
--- /dev/null
+++ b/plugins/azure-devops/src/hooks/useReadme.test.tsx
@@ -0,0 +1,108 @@
+/*
+ * Copyright 2021 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import React from 'react';
+import { renderHook, waitFor } from '@testing-library/react';
+import { Entity } from '@backstage/catalog-model';
+import { Readme } from '@backstage/plugin-azure-devops-common';
+import { TestApiProvider } from '@backstage/test-utils';
+import { AzureDevOpsApi, azureDevOpsApiRef } from '../api';
+import { useReadme } from './useReadme';
+
+describe('useReadme', () => {
+  const azureDevOpsApiMock = {
+    getReadme: jest.fn(),
+  };
+  const azureDevOpsApi =
+    azureDevOpsApiMock as Partial<AzureDevOpsApi> as AzureDevOpsApi;
+
+  const Wrapper = (props: { children?: React.ReactNode }) => (
+    <TestApiProvider apis={[[azureDevOpsApiRef, azureDevOpsApi]]}>
+      {props.children}
+    </TestApiProvider>
+  );
+
+  it('should provide a Readme', async () => {
+    const entity: Entity = {
+      apiVersion: 'backstage.io/v1alpha1',
+      kind: 'Component',
+      metadata: {
+        namespace: 'default',
+        name: 'project-repo',
+        annotations: {
+          'dev.azure.com/project-repo': 'projectName/repoName',
+        },
+      },
+    };
+    const readme: Readme = {
+      url: 'https://dev.azure.com/org/project/repo',
+      content: 'This is some fake README content',
+    };
+    azureDevOpsApiMock.getReadme.mockResolvedValue({
+      item: readme,
+    });
+    const { result } = renderHook(() => useReadme(entity), {
+      wrapper: Wrapper,
+    });
+
+    expect(result.current.loading).toEqual(true);
+
+    await waitFor(() => {
+      expect(result.current.item).toEqual({
+        item: readme,
+      });
+    });
+  });
+
+  it('should return throw when annotation missing', async () => {
+    const entity: Entity = {
+      apiVersion: 'backstage.io/v1alpha1',
+      kind: 'Component',
+      metadata: {
+        namespace: 'default',
+        name: 'project-repo',
+      },
+    };
+
+    expect(() =>
+      renderHook(() => useReadme(entity), {
+        wrapper: Wrapper,
+      }),
+    ).toThrow('Value for annotation "dev.azure.com/project" was not found');
+  });
+
+  it('should return throw when annotation invalid', async () => {
+    const entity: Entity = {
+      apiVersion: 'backstage.io/v1alpha1',
+      kind: 'Component',
+      metadata: {
+        namespace: 'default',
+        name: 'project-repo',
+        annotations: {
+          'dev.azure.com/project-repo': 'fake',
+        },
+      },
+    };
+
+    expect(() =>
+      renderHook(() => useReadme(entity), {
+        wrapper: Wrapper,
+      }),
+    ).toThrow(
+      'Invalid value for annotation "dev.azure.com/project-repo"; expected format is: <project-name>/<repo-name>, found: "fake"',
+    );
+  });
+});
diff --git a/plugins/azure-devops/src/hooks/useReadme.ts b/plugins/azure-devops/src/hooks/useReadme.ts
new file mode 100644
index 0000000000..60b2e21990
--- /dev/null
+++ b/plugins/azure-devops/src/hooks/useReadme.ts
@@ -0,0 +1,42 @@
+/*
+ * Copyright 2021 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import { Readme } from '@backstage/plugin-azure-devops-common';
+
+import { Entity } from '@backstage/catalog-model';
+import { azureDevOpsApiRef } from '../api';
+import { useApi } from '@backstage/core-plugin-api';
+import useAsync from 'react-use/lib/useAsync';
+import { getAnnotationValuesFromEntity } from '../utils';
+
+export function useReadme(entity: Entity): {
+  item?: Readme;
+  loading: boolean;
+  error?: Error;
+} {
+  const api = useApi(azureDevOpsApiRef);
+  const { project, repo } = getAnnotationValuesFromEntity(entity);
+
+  const { value, loading, error } = useAsync(async () => {
+    return await api.getReadme({ project, repo: repo as string });
+  }, [api, project, repo]);
+
+  return {
+    item: value,
+    loading,
+    error,
+  };
+}