diff --git a/src/harness/mocks.ts b/src/harness/mocks.ts
index 051fdc094a4..315677b7117 100644
--- a/src/harness/mocks.ts
+++ b/src/harness/mocks.ts
@@ -1,5 +1,7 @@
 /// <reference path="./core.ts" />
-/// <reference path="./vfs.ts" />
+/// <reference path="./vfs.ts" />import { debug } from "util";
+
+
 
 // NOTE: The contents of this file are all exported from the namespace 'mocks'. This is to
 //       support the eventual conversion of harness into a modular system.
@@ -298,7 +300,6 @@ namespace mocks {
             return undefined;
         }
 
-        // TOOD: record and invoke callbacks to simulate timer events
         public setTimeout(callback: (...args: any[]) => void, timeout: number, ...args: any[]) {
             return this.timers.setTimeout(callback, timeout, ...args);
         }
diff --git a/src/harness/unittests/compileOnSave.ts b/src/harness/unittests/compileOnSave.ts
index 7ef3e2aa1af..36f9d1c366b 100644
--- a/src/harness/unittests/compileOnSave.ts
+++ b/src/harness/unittests/compileOnSave.ts
@@ -1,6 +1,7 @@
 /// <reference path="../harness.ts" />
 /// <reference path="./tsserverProjectSystem.ts" />
 /// <reference path="../../server/typingsInstaller/typingsInstaller.ts" />
+/// <reference path="../mocks.ts" />
 
 namespace ts.projectSystem {
     import CommandNames = server.CommandNames;
@@ -58,6 +59,24 @@ namespace ts.projectSystem {
             // A compile on save affected file request using file1
             let moduleFile1FileListRequest: server.protocol.Request;
 
+            let sharedFs: vfs.VirtualFileSystem;
+            before(() => {
+                const fs = new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true);
+                fs.addFile("/a/b/moduleFile1.ts", `export function Foo() { };`);
+                fs.addFile("/a/b/file1Consumer1.ts", `import {Foo} from "./moduleFile1"; export var y = 10;`);
+                fs.addFile("/a/b/file1Consumer2.ts", `import {Foo} from "./moduleFile1"; let z = 10;`);
+                fs.addFile("/a/b/globalFile3.ts", `interface GlobalFoo { age: number }`);
+                fs.addFile("/a/b/moduleFile2.ts", `export var Foo4 = 10;`);
+                fs.addFile("/a/b/tsconfig.json", `{ compileOnSave": true }`);
+                fs.addFile(libFile.path, libFile.content);
+                fs.makeReadOnly();
+                sharedFs = fs;
+            });
+
+            after(() => {
+                sharedFs = undefined;
+            });
+
             beforeEach(() => {
                 moduleFile1 = {
                     path: "/a/b/moduleFile1.ts",
@@ -115,7 +134,7 @@ namespace ts.projectSystem {
             });
 
             it("should contains only itself if a module file's shape didn't change, and all files referencing it if its shape changed", () => {
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, globalFile3, moduleFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -140,7 +159,7 @@ namespace ts.projectSystem {
             });
 
             it("should be up-to-date with the reference map changes", () => {
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, globalFile3, moduleFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -187,7 +206,7 @@ namespace ts.projectSystem {
             });
 
             it("should be up-to-date with changes made in non-open files", () => {
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, globalFile3, moduleFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -196,15 +215,13 @@ namespace ts.projectSystem {
                 // Send an initial compileOnSave request
                 sendAffectedFileRequestAndCheckResult(session, moduleFile1FileListRequest, [{ projectFileName: configFile.path, files: [moduleFile1, file1Consumer1, file1Consumer2] }]);
 
-                file1Consumer1.content = `let y = 10;`;
-                host.reloadFS([moduleFile1, file1Consumer1, file1Consumer2, configFile, libFile]);
-
+                host.vfs.writeFile(file1Consumer1.path, `let y = 10;`);
                 session.executeCommand(changeModuleFile1ShapeRequest1);
                 sendAffectedFileRequestAndCheckResult(session, moduleFile1FileListRequest, [{ projectFileName: configFile.path, files: [moduleFile1, file1Consumer2] }]);
             });
 
             it("should be up-to-date with deleted files", () => {
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, globalFile3, moduleFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -212,13 +229,14 @@ namespace ts.projectSystem {
                 sendAffectedFileRequestAndCheckResult(session, moduleFile1FileListRequest, [{ projectFileName: configFile.path, files: [moduleFile1, file1Consumer1, file1Consumer2] }]);
 
                 session.executeCommand(changeModuleFile1ShapeRequest1);
-                // Delete file1Consumer2
-                host.reloadFS([moduleFile1, file1Consumer1, configFile, libFile]);
+
+                host.vfs.removeFile(file1Consumer2.path);
+
                 sendAffectedFileRequestAndCheckResult(session, moduleFile1FileListRequest, [{ projectFileName: configFile.path, files: [moduleFile1, file1Consumer1] }]);
             });
 
             it("should be up-to-date with newly created files", () => {
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, globalFile3, moduleFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -229,8 +247,7 @@ namespace ts.projectSystem {
                     path: "/a/b/file1Consumer3.ts",
                     content: `import {Foo} from "./moduleFile1"; let y = Foo();`
                 };
-                host.reloadFS([moduleFile1, file1Consumer1, file1Consumer2, file1Consumer3, globalFile3, configFile, libFile]);
-                host.runQueuedTimeoutCallbacks();
+                host.vfs.writeFile(file1Consumer3.path, file1Consumer3.content);
                 session.executeCommand(changeModuleFile1ShapeRequest1);
                 sendAffectedFileRequestAndCheckResult(session, moduleFile1FileListRequest, [{ projectFileName: configFile.path, files: [moduleFile1, file1Consumer1, file1Consumer2, file1Consumer3] }]);
             });
@@ -254,7 +271,12 @@ namespace ts.projectSystem {
                     }`
                 };
 
-                const host = createServerHost([moduleFile1, file1Consumer1, configFile, libFile]);
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(moduleFile1.path, moduleFile1.content);
+                host.vfs.addFile(file1Consumer1.path, file1Consumer1.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+                host.vfs.addFile(libFile.path, libFile.content);
+
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -271,7 +293,7 @@ namespace ts.projectSystem {
             });
 
             it("should return all files if a global file changed shape", () => {
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, globalFile3, moduleFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -297,7 +319,8 @@ namespace ts.projectSystem {
                     content: `{}`
                 };
 
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
+                host.vfs.writeFile(configFile.path, configFile.content);
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
                 openFilesForSession([moduleFile1], session);
@@ -319,7 +342,10 @@ namespace ts.projectSystem {
                     }`
                 };
 
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer2, configFile2, configFile, libFile]);
+                const host = new mocks.MockServerHost(sharedFs.shadow());
+                host.vfs.writeFile(configFile.path, configFile.content);
+                host.vfs.addFile(configFile2.path, configFile2.content);
+
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -338,7 +364,12 @@ namespace ts.projectSystem {
                     }`
                 };
 
-                const host = createServerHost([moduleFile1, file1Consumer1, configFile, libFile]);
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(moduleFile1.path, moduleFile1.content);
+                host.vfs.addFile(file1Consumer1.path, file1Consumer1.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+                host.vfs.addFile(libFile.path, libFile.content);
+
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
                 openFilesForSession([moduleFile1], session);
@@ -367,7 +398,12 @@ namespace ts.projectSystem {
                     }`
                 };
 
-                const host = createServerHost([moduleFile1, file1Consumer1, configFile, libFile]);
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(moduleFile1.path, moduleFile1.content);
+                host.vfs.addFile(file1Consumer1.path, file1Consumer1.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+                host.vfs.addFile(libFile.path, libFile.content);
+
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
                 openFilesForSession([moduleFile1], session);
@@ -389,7 +425,16 @@ namespace ts.projectSystem {
                     path: "/a/b/file1Consumer1Consumer1.ts",
                     content: `import {y} from "./file1Consumer1";`
                 };
-                const host = createServerHost([moduleFile1, file1Consumer1, file1Consumer1Consumer1, globalFile3, configFile, libFile]);
+
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(moduleFile1.path, moduleFile1.content);
+                host.vfs.addFile(file1Consumer1.path, file1Consumer1.content);
+                host.vfs.addFile(file1Consumer1Consumer1.path, file1Consumer1Consumer1.content);
+                host.vfs.addFile(globalFile3.path, globalFile3.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+                host.vfs.addFile(libFile.path, libFile.content);
+                host.vfs.addFile(file1Consumer1Consumer1.path, file1Consumer1Consumer1.content);
+
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -422,7 +467,12 @@ namespace ts.projectSystem {
                     /// <reference path="./file1.ts" />
                     export var t2 = 10;`
                 };
-                const host = createServerHost([file1, file2, configFile]);
+
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(file1.path, file1.content);
+                host.vfs.addFile(file2.path, file2.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+
                 const typingsInstaller = createTestTypingsInstaller(host);
                 const session = createSession(host, typingsInstaller);
 
@@ -438,7 +488,13 @@ namespace ts.projectSystem {
                 const configFile1: FileOrFolder = { path: "/a/b/tsconfig.json", content: `{ "compileOnSave": true }` };
                 const configFile2: FileOrFolder = { path: "/a/c/tsconfig.json", content: `{ "compileOnSave": true }` };
 
-                const host = createServerHost([file1, file2, file3, configFile1, configFile2]);
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(file1.path, file1.content);
+                host.vfs.addFile(file2.path, file2.content);
+                host.vfs.addFile(file3.path, file3.content);
+                host.vfs.addFile(configFile1.path, configFile1.content);
+                host.vfs.addFile(configFile2.path, configFile2.content);
+
                 const session = createSession(host);
 
                 openFilesForSession([file1, file2, file3], session);
@@ -457,16 +513,23 @@ namespace ts.projectSystem {
                     /// <reference path="./moduleFile1.ts" />
                     export var x = Foo();`
                 };
-                const host = createServerHost([moduleFile1, referenceFile1, configFile]);
+
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(moduleFile1.path, moduleFile1.content);
+                host.vfs.addFile(referenceFile1.path, referenceFile1.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+
                 const session = createSession(host);
 
                 openFilesForSession([referenceFile1], session);
-                host.reloadFS([referenceFile1, configFile]);
+
+                host.vfs.removeFile(moduleFile1.path);
 
                 const request = makeSessionRequest<server.protocol.FileRequestArgs>(CommandNames.CompileOnSaveAffectedFileList, { file: referenceFile1.path });
                 sendAffectedFileRequestAndCheckResult(session, request, [
                     { projectFileName: configFile.path, files: [referenceFile1] }
                 ]);
+
                 const requestForMissingFile = makeSessionRequest<server.protocol.FileRequestArgs>(CommandNames.CompileOnSaveAffectedFileList, { file: moduleFile1.path });
                 sendAffectedFileRequestAndCheckResult(session, requestForMissingFile, []);
             });
@@ -478,10 +541,15 @@ namespace ts.projectSystem {
                     /// <reference path="./moduleFile2.ts" />
                     export var x = Foo();`
                 };
-                const host = createServerHost([referenceFile1, configFile]);
+
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+                host.vfs.addFile(referenceFile1.path, referenceFile1.content);
+                host.vfs.addFile(configFile.path, configFile.content);
+
                 const session = createSession(host);
 
                 openFilesForSession([referenceFile1], session);
+
                 const request = makeSessionRequest<server.protocol.FileRequestArgs>(CommandNames.CompileOnSaveAffectedFileList, { file: referenceFile1.path });
                 sendAffectedFileRequestAndCheckResult(session, request, [
                     { projectFileName: configFile.path, files: [referenceFile1] }
@@ -502,7 +570,10 @@ namespace ts.projectSystem {
                     path: path + ts.Extension.Ts,
                     content: lines.join(newLine)
                 };
-                const host = createServerHost([f], { newLine });
+
+                const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true), /*executingFilePath*/ undefined, newLine);
+                host.vfs.addFile(f.path, f.content);
+
                 const session = createSession(host);
                 const openRequest: server.protocol.OpenRequest = {
                     seq: 1,
@@ -536,7 +607,13 @@ namespace ts.projectSystem {
                 path: "/a/b/tsconfig.json",
                 content: `{}`
             };
-            const host = createServerHost([file1, file2, configFile, libFile], { newLine: "\r\n" });
+
+            const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true), /*executingFilePath*/ undefined, "\r\n");
+            host.vfs.addFile(file1.path, file1.content);
+            host.vfs.addFile(file2.path, file2.content);
+            host.vfs.addFile(configFile.path, configFile.content);
+            host.vfs.addFile(libFile.path, libFile.content);
+
             const typingsInstaller = createTestTypingsInstaller(host);
             const session = createSession(host, { typingsInstaller });
 
@@ -564,7 +641,13 @@ namespace ts.projectSystem {
                 content: "console.log('file3');"
             };
             const externalProjectName = "/a/b/externalproject";
-            const host = createServerHost([file1, file2, file3, libFile]);
+
+            const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+            host.vfs.addFile(file1.path, file1.content);
+            host.vfs.addFile(file2.path, file2.content);
+            host.vfs.addFile(file3.path, file3.content);
+            host.vfs.addFile(libFile.path, libFile.content);
+
             const session = createSession(host);
             const projectService = session.getProjectService();
 
@@ -596,7 +679,11 @@ namespace ts.projectSystem {
                 content: "consonle.log('file1');"
             };
             const externalProjectName = "/root/TypeScriptProject3/TypeScriptProject3/TypeScriptProject3.csproj";
-            const host = createServerHost([file1, libFile]);
+
+            const host = new mocks.MockServerHost(new vfs.VirtualFileSystem("/", /*useCaseSensitiveFileNames*/ true));
+            host.vfs.addFile(file1.path, file1.content);
+            host.vfs.addFile(libFile.path, libFile.content);
+
             const session = createSession(host);
             const projectService = session.getProjectService();
 
diff --git a/src/harness/vfs.ts b/src/harness/vfs.ts
index 0fcaef05443..92f34f6b832 100644
--- a/src/harness/vfs.ts
+++ b/src/harness/vfs.ts
@@ -869,7 +869,7 @@ namespace vfs {
          * Gets the root directory for this entry.
          */
         public get root(): VirtualDirectory | undefined {
-            return this.parent instanceof VirtualRoot ? this : undefined;
+            return this.parent instanceof VirtualRoot ? this : this.parent.root;
         }
 
         /**
@@ -1129,11 +1129,13 @@ namespace vfs {
                     const { files, directories } = resolver.getEntries(this);
                     for (const dir of directories) {
                         const vdir = new VirtualDirectory(this, dir, resolver);
+                        vdir.addListener("fileSystemChange", this._onChildFileSystemChange);
                         if (this.isReadOnly) vdir.makeReadOnly();
                         entries.set(vdir.name, vdir);
                     }
                     for (const file of files) {
                         const vfile = new VirtualFile(this, file, resolver);
+                        vfile.addListener("fileSystemChange", this._onChildFileSystemChange);
                         if (this.isReadOnly) vfile.makeReadOnly();
                         entries.set(vfile.name, vfile);
                     }
@@ -1141,6 +1143,7 @@ namespace vfs {
                 else if (shadowRoot) {
                     shadowRoot.getOwnEntries().forEach(entry => {
                         const clone = entry.shadow(this);
+                        clone.addListener("fileSystemChange", this._onChildFileSystemChange);
                         if (this.isReadOnly) clone.makeReadOnly();
                         entries.set(clone.name, clone);
                     });
@@ -1292,7 +1295,7 @@ namespace vfs {
             this.updateAccessTime();
             this.updateModificationTime();
             this.emit("childAdded", entry);
-            entry.emit("fileSystemChange", entry.path, "added");
+            this.emit("fileSystemChange", entry.path, "added");
             entry.addListener("fileSystemChange", this._onChildFileSystemChange);
         }
 
@@ -1618,34 +1621,14 @@ namespace vfs {
          * Gets the text content of this file.
          */
         public get content(): string | undefined {
-            if (!this._contentWasSet) {
-                const resolver = this._resolver;
-                const shadowRoot = this._shadowRoot;
-                if (resolver) {
-                    this._resolver = undefined;
-                    this._content = typeof resolver === "function" ? resolver(this) : resolver.getContent(this);
-                    this._contentWasSet = true;
-                }
-                else if (shadowRoot) {
-                    this._content = shadowRoot.content;
-                    this._contentWasSet = true;
-                }
-            }
-            return this._content;
+            return this.readContent(/*updateAccessTime*/ false);
         }
 
         /**
          * Sets the text content of this file.
          */
         public set content(value: string | undefined) {
-            if (this.content !== value) {
-                this.writePreamble();
-                this._resolver = undefined;
-                this._content = value;
-                this._contentWasSet = true;
-                this.emit("contentChanged", this);
-                this.emit("fileSystemChange", this.path, "modified");
-            }
+            this.writeContent(value, /*updateModificationType*/ false);
         }
 
         /**
@@ -1663,18 +1646,41 @@ namespace vfs {
         /**
          * Reads the content and updates the file's access time.
          */
-        public readContent() {
-            const content = this.content;
-            if (content) this.updateAccessTime();
-            return content;
+        public readContent(updateAccessTime = true) {
+            if (!this._contentWasSet) {
+                const resolver = this._resolver;
+                const shadowRoot = this._shadowRoot;
+                if (resolver) {
+                    this._resolver = undefined;
+                    this._content = typeof resolver === "function" ? resolver(this) : resolver.getContent(this);
+                    this._contentWasSet = true;
+                }
+                else if (shadowRoot) {
+                    this._content = shadowRoot.content;
+                    this._contentWasSet = true;
+                }
+            }
+            if (this._content && updateAccessTime) {
+                this.updateAccessTime();
+            }
+            return this._content;
         }
 
         /**
          * Writes the provided content and updates the file's modification time.
          */
-        public writeContent(content: string) {
-            this.content = content;
-            if (content) this.updateModificationTime();
+        public writeContent(content: string | undefined, updateModificationTime = true) {
+            if (this.content !== content) {
+                this.writePreamble();
+                this._resolver = undefined;
+                this._content = content;
+                this._contentWasSet = true;
+                if (content && updateModificationTime) {
+                    this.updateModificationTime();
+                }
+                this.emit("contentChanged", this);
+                this.emit("fileSystemChange", this.path, "modified");
+            }
         }
 
         public getStats() {