diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index f8ab0330dad..ccde539fafa 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -408,7 +408,7 @@ namespace ts {
             description: Diagnostics.Specify_library_files_to_be_included_in_the_compilation_Colon
         },
         {
-            name: "disableSizeLimit",
+            name: "disableProjectSizeLimit",
             type: "boolean"
         },
         {
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index 47fa84dd9ce..44062885677 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -2984,9 +2984,5 @@
     "Unknown typing option '{0}'.": {
         "category": "Error",
         "code": 17010
-    },
-    "Too many JavaScript files in the project. Consider specifying the 'exclude' setting in project configuration to limit included source folders. The likely folder to exclude is '{0}'. To disable the project size limit, set the 'disableSizeLimit' compiler option to 'true'.": {
-        "category": "Error",
-        "code": 17012
     }
 }
diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index 99ca9377d54..06f32c4f4a2 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -7,9 +7,6 @@ namespace ts {
     /* @internal */ export let emitTime = 0;
     /* @internal */ export let ioReadTime = 0;
     /* @internal */ export let ioWriteTime = 0;
-    /* @internal */ export const maxProgramSizeForNonTsFiles = 20 * 1024 * 1024;
-
-    /** The version of the TypeScript compiler release */
 
     const emptyArray: any[] = [];
 
@@ -19,6 +16,7 @@ namespace ts {
         "node_modules/@types/",
     ];
 
+    /** The version of the TypeScript compiler release */
     export const version = "1.9.0";
 
     export function findConfigFile(searchPath: string, fileExists: (fileName: string) => boolean): string {
@@ -1059,8 +1057,6 @@ namespace ts {
         let diagnosticsProducingTypeChecker: TypeChecker;
         let noDiagnosticsTypeChecker: TypeChecker;
         let classifiableNames: Map<string>;
-        let programSizeLimitExceeded = false;
-        let programSizeForNonTsFiles = 0;
 
         let resolvedTypeReferenceDirectives: Map<ResolvedTypeReferenceDirective> = {};
         let fileProcessingDiagnostics = createDiagnosticCollection();
@@ -1166,11 +1162,6 @@ namespace ts {
 
         return program;
 
-        function exceedProgramSizeLimit() {
-            return !options.disableSizeLimit && programSizeLimitExceeded;
-        }
-
-
         function getCommonSourceDirectory() {
             if (typeof commonSourceDirectory === "undefined") {
                 if (options.rootDir && checkSourceFilesBelongToPath(files, options.rootDir)) {
@@ -1219,7 +1210,6 @@ namespace ts {
                 (oldOptions.noLib !== options.noLib) ||
                 (oldOptions.jsx !== options.jsx) ||
                 (oldOptions.allowJs !== options.allowJs) ||
-                (oldOptions.disableSizeLimit !== options.disableSizeLimit) ||
                 (oldOptions.rootDir !== options.rootDir) ||
                 (oldOptions.typesSearchPaths !== options.typesSearchPaths) ||
                 (oldOptions.configFilePath !== options.configFilePath) ||
@@ -1838,7 +1828,7 @@ namespace ts {
                 }
             }
 
-            if (diagnostic && !exceedProgramSizeLimit()) {
+            if (diagnostic) {
                 if (refFile !== undefined && refEnd !== undefined && refPos !== undefined) {
                     fileProcessingDiagnostics.add(createFileDiagnostic(refFile, refPos, refEnd - refPos, diagnostic, ...diagnosticArgument));
                 }
@@ -1871,11 +1861,6 @@ namespace ts {
                 return file;
             }
 
-            const isNonTsFile = !hasTypeScriptFileExtension(fileName);
-            if (isNonTsFile && exceedProgramSizeLimit()) {
-                return undefined;
-            }
-
             // We haven't looked for this file, do so now and cache result
             const file = host.getSourceFile(fileName, options.target, hostErrorMessage => {
                 if (refFile !== undefined && refPos !== undefined && refEnd !== undefined) {
@@ -1887,25 +1872,6 @@ namespace ts {
                 }
             });
 
-            if (!options.disableSizeLimit && file && file.text && !hasTypeScriptFileExtension(file.fileName)) {
-                programSizeForNonTsFiles += file.text.length;
-                if (programSizeForNonTsFiles > maxProgramSizeForNonTsFiles) {
-                    // If the program size limit was reached when processing a file, this file is
-                    // likely in the problematic folder than contains too many files.
-                    // Normally the folder is one level down from the commonSourceDirectory, for example,
-                    // if the commonSourceDirectory is "/src/", and the last processed path was "/src/node_modules/a/b.js",
-                    // we should show in the error message "/src/node_modules/".
-                    const commonSourceDirectory = getCommonSourceDirectory();
-                    let rootLevelDirectory = path.substring(0, Math.max(commonSourceDirectory.length, path.indexOf(directorySeparator, commonSourceDirectory.length)));
-                    if (rootLevelDirectory[rootLevelDirectory.length - 1] !== directorySeparator) {
-                        rootLevelDirectory += directorySeparator;
-                    }
-                    programDiagnostics.add(createCompilerDiagnostic(Diagnostics.Too_many_JavaScript_files_in_the_project_Consider_specifying_the_exclude_setting_in_project_configuration_to_limit_included_source_folders_The_likely_folder_to_exclude_is_0_To_disable_the_project_size_limit_set_the_disableSizeLimit_compiler_option_to_true, rootLevelDirectory));
-                    programSizeLimitExceeded = true;
-                    return undefined;
-                }
-            }
-
             filesByName.set(path, file);
             if (file) {
                 file.path = path;
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index bd29dc65ac4..5af2989a717 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -27,6 +27,8 @@ namespace ts.server {
         });
     }
 
+    export const maxProgramSizeForNonTsFiles = 20 * 1024 * 1024;
+
     export class ScriptInfo {
         svc: ScriptVersionCache;
         children: ScriptInfo[] = [];     // files referenced by this file
@@ -384,7 +386,7 @@ namespace ts.server {
         constructor(
             public projectService: ProjectService,
             public projectOptions?: ProjectOptions,
-            public languageServiceDiabled?: boolean) {
+            public languageServiceDiabled = false) {
             if (projectOptions && projectOptions.files) {
                 // If files are listed explicitly, allow all extensions
                 projectOptions.compilerOptions.allowNonTsExtensions = true;
@@ -430,7 +432,16 @@ namespace ts.server {
 
         getFileNames() {
             if (this.languageServiceDiabled) {
-                return this.projectOptions ? this.projectOptions.files : undefined;
+                if (!this.projectOptions) {
+                    return undefined;
+                }
+
+                const fileNames: string[] = [];
+                if (this.projectOptions && this.projectOptions.compilerOptions) {
+                    fileNames.push(getDefaultLibFilePath(this.projectOptions.compilerOptions));
+                }
+                ts.addRange(fileNames, this.projectOptions.files);
+                return fileNames;
             }
 
             const sourceFiles = this.program.getSourceFiles();
@@ -1340,6 +1351,10 @@ namespace ts.server {
 
         private exceedTotalNonTsFileSizeLimit(fileNames: string[]) {
             let totalNonTsFileSize = 0;
+            if (!this.host.getFileSize) {
+                return false;
+            }
+
             for (const fileName of fileNames) {
                 if (hasTypeScriptFileExtension(fileName)) {
                     continue;
@@ -1409,14 +1424,17 @@ namespace ts.server {
                     return errors;
                 }
                 else {
-                    if (this.exceedTotalNonTsFileSizeLimit(projectOptions.files)) {
+                    if (this.exceedTotalNonTsFileSizeLimit(projectOptions.files) && projectOptions.compilerOptions && !projectOptions.compilerOptions.disableSizeLimit) {
                         project.setProjectOptions(projectOptions);
                         if (project.languageServiceDiabled) {
                             return;
                         }
 
                         project.disableLanguageService();
-                        project.directoryWatcher.close();
+                        if (project.directoryWatcher) {
+                            project.directoryWatcher.close();
+                            project.directoryWatcher = undefined;
+                        }
                         return;
                     }
 
diff --git a/src/server/protocol.d.ts b/src/server/protocol.d.ts
index 018162d0fff..4ebf1aff5d6 100644
--- a/src/server/protocol.d.ts
+++ b/src/server/protocol.d.ts
@@ -123,6 +123,9 @@ declare namespace ts.server.protocol {
           * The list of normalized file name in the project, including 'lib.d.ts'
           */
         fileNames?: string[];
+        /**
+         * Indicates if the project has a active language service instance
+         */
         languageServiceDisabled?: boolean;
     }