diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index a4c3a65f29c..cb12e6da4d5 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -10,6 +10,22 @@ module ts {
     /** The version of the TypeScript compiler release */
     export let version = "1.5.0.0";
 
+    export function findConfigFile(searchPath: string): string {
+        var fileName = "tsconfig.json";
+        while (true) {
+            if (sys.fileExists(fileName)) {
+                return fileName;
+            }
+            var parentPath = getDirectoryPath(searchPath);
+            if (parentPath === searchPath) {
+                break;
+            }
+            searchPath = parentPath;
+            fileName = "../" + fileName;
+        }
+        return undefined;
+    }
+
     export function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost {
         let currentDirectory: string;
         let existingDirectories: Map<boolean> = {};
diff --git a/src/compiler/tsc.ts b/src/compiler/tsc.ts
index 3f82d6c8cf5..a0d21106f43 100644
--- a/src/compiler/tsc.ts
+++ b/src/compiler/tsc.ts
@@ -132,23 +132,6 @@ module ts {
         return typeof JSON === "object" && typeof JSON.parse === "function";
     }
 
-    function findConfigFile(): string {
-        var searchPath = normalizePath(sys.getCurrentDirectory());
-        var fileName = "tsconfig.json";
-        while (true) {
-            if (sys.fileExists(fileName)) {
-                return fileName;
-            }
-            var parentPath = getDirectoryPath(searchPath);
-            if (parentPath === searchPath) {
-                break;
-            }
-            searchPath = parentPath;
-            fileName = "../" + fileName;
-        }
-        return undefined;
-    }
-
     export function executeCommandLine(args: string[]): void {
         var commandLine = parseCommandLine(args);
         var configFileName: string;                 // Configuration file name (if any)
@@ -198,7 +181,8 @@ module ts {
             }
         }
         else if (commandLine.fileNames.length === 0 && isJSONSupported()) {
-            configFileName = findConfigFile();
+            var searchPath = normalizePath(sys.getCurrentDirectory());
+            configFileName = findConfigFile(searchPath);
         }
 
         if (commandLine.fileNames.length === 0 && !configFileName) {
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index e78e6fa8b78..034549ab464 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -280,12 +280,7 @@ module ts.server {
         openRefCount = 0;
 
         constructor(public projectService: ProjectService, public projectOptions?: ProjectOptions) {
-            if (projectOptions && projectOptions.compilerOptions) {
-                this.compilerService = new CompilerService(this,projectOptions.compilerOptions);
-            }
-            else {
-                this.compilerService = new CompilerService(this);
-            }
+            this.compilerService = new CompilerService(this,projectOptions && projectOptions.compilerOptions);
         }
 
         addOpenRef() {
@@ -508,7 +503,7 @@ module ts.server {
             this.printProjects();
         }
 
-        gcConfiguredProjects() {
+        updateConfiguredProjectList() {
             var configuredProjects: Project[] = [];
             for (var i = 0, len = this.configuredProjects.length; i < len; i++) {
                 if (this.configuredProjects[i].openRefCount > 0) {
@@ -565,7 +560,7 @@ module ts.server {
                     this.openFileRoots.push(info);
                 }
             }
-            this.gcConfiguredProjects();
+            this.updateConfiguredProjectList();
         }
 
         /**
@@ -762,13 +757,18 @@ module ts.server {
          */
 
         openClientFile(fileName: string) {
-            var configFileName = this.findConfigFile(fileName);
+            var searchPath = ts.normalizePath(getDirectoryPath(fileName));
+            var configFileName = ts.findConfigFile(searchPath);
+            if (configFileName) {
+                configFileName = getAbsolutePath(configFileName, searchPath);
+            }
             if (configFileName && (!this.configProjectIsActive(configFileName))) {
                 var configResult = this.openConfigFile(configFileName, fileName);
                 if (!configResult.success) {
                     this.log("Error opening config file " + configFileName + " " + configResult.errorMsg);
                 }
                 else {
+                    this.log("Opened configuration file " + configFileName,"Info");
                     this.configuredProjects.push(configResult.project);                    
                 }
             }
@@ -859,22 +859,6 @@ module ts.server {
             }
             return false;
         }
-
-        findConfigFile(openedFileName: string): string {
-            var searchPath = getDirectoryPath(openedFileName);
-            while (true) {
-                var fileName = searchPath + ts.directorySeparator + "tsconfig.json";
-                if (sys.fileExists(fileName)) {
-                    return fileName;
-                }
-                var parentPath = getDirectoryPath(searchPath);
-                if (parentPath === searchPath) {
-                    break;
-                }
-                searchPath = parentPath;
-            }
-            return undefined;
-        }
         
         openConfigFile(configFilename: string, clientFileName?: string): ProjectOpenResult {
             configFilename = ts.normalizePath(configFilename);
@@ -915,9 +899,9 @@ module ts.server {
         }
 
         createProject(projectFilename: string, projectOptions?: ProjectOptions) {
-            var eproj = new Project(this, projectOptions);
-            eproj.projectFilename = projectFilename;
-            return eproj;
+            var project = new Project(this, projectOptions);
+            project.projectFilename = projectFilename;
+            return project;
         }
 
     }
@@ -943,8 +927,6 @@ module ts.server {
 
         setCompilerOptions(opt: ts.CompilerOptions) {
             this.settings = opt;
-            // override default ES6 (remove when compiler default back at ES5)
-            this.settings.target = ts.ScriptTarget.ES5;
             this.host.setCompilationSettings(opt);
         }
 
diff --git a/tests/baselines/reference/APISample_compile.js b/tests/baselines/reference/APISample_compile.js
index b8f4c7cdd13..88d9b7ff918 100644
--- a/tests/baselines/reference/APISample_compile.js
+++ b/tests/baselines/reference/APISample_compile.js
@@ -1475,6 +1475,7 @@ declare module "typescript" {
 declare module "typescript" {
     /** The version of the TypeScript compiler release */
     let version: string;
+    function findConfigFile(searchPath: string): string;
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;
     function getPreEmitDiagnostics(program: Program): Diagnostic[];
     function flattenDiagnosticMessageText(messageText: string | DiagnosticMessageChain, newLine: string): string;
diff --git a/tests/baselines/reference/APISample_compile.types b/tests/baselines/reference/APISample_compile.types
index e1d9aa58961..eb4ddd7c1d4 100644
--- a/tests/baselines/reference/APISample_compile.types
+++ b/tests/baselines/reference/APISample_compile.types
@@ -4736,6 +4736,10 @@ declare module "typescript" {
     let version: string;

 >version : string
 
+    function findConfigFile(searchPath: string): string;

+>findConfigFile : (searchPath: string) => string
+>searchPath : string
+
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;

 >createCompilerHost : (options: CompilerOptions, setParentNodes?: boolean) => CompilerHost
 >options : CompilerOptions
diff --git a/tests/baselines/reference/APISample_linter.js b/tests/baselines/reference/APISample_linter.js
index 4e3af8d1be0..d688c083e1b 100644
--- a/tests/baselines/reference/APISample_linter.js
+++ b/tests/baselines/reference/APISample_linter.js
@@ -1506,6 +1506,7 @@ declare module "typescript" {
 declare module "typescript" {
     /** The version of the TypeScript compiler release */
     let version: string;
+    function findConfigFile(searchPath: string): string;
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;
     function getPreEmitDiagnostics(program: Program): Diagnostic[];
     function flattenDiagnosticMessageText(messageText: string | DiagnosticMessageChain, newLine: string): string;
diff --git a/tests/baselines/reference/APISample_linter.types b/tests/baselines/reference/APISample_linter.types
index 7cf542f0b40..86d14b4fb88 100644
--- a/tests/baselines/reference/APISample_linter.types
+++ b/tests/baselines/reference/APISample_linter.types
@@ -4882,6 +4882,10 @@ declare module "typescript" {
     let version: string;

 >version : string
 
+    function findConfigFile(searchPath: string): string;

+>findConfigFile : (searchPath: string) => string
+>searchPath : string
+
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;

 >createCompilerHost : (options: CompilerOptions, setParentNodes?: boolean) => CompilerHost
 >options : CompilerOptions
diff --git a/tests/baselines/reference/APISample_transform.js b/tests/baselines/reference/APISample_transform.js
index 261ad5b25f6..0d7463e8023 100644
--- a/tests/baselines/reference/APISample_transform.js
+++ b/tests/baselines/reference/APISample_transform.js
@@ -1507,6 +1507,7 @@ declare module "typescript" {
 declare module "typescript" {
     /** The version of the TypeScript compiler release */
     let version: string;
+    function findConfigFile(searchPath: string): string;
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;
     function getPreEmitDiagnostics(program: Program): Diagnostic[];
     function flattenDiagnosticMessageText(messageText: string | DiagnosticMessageChain, newLine: string): string;
diff --git a/tests/baselines/reference/APISample_transform.types b/tests/baselines/reference/APISample_transform.types
index eb4c7ab122f..5e3911d278e 100644
--- a/tests/baselines/reference/APISample_transform.types
+++ b/tests/baselines/reference/APISample_transform.types
@@ -4832,6 +4832,10 @@ declare module "typescript" {
     let version: string;

 >version : string
 
+    function findConfigFile(searchPath: string): string;

+>findConfigFile : (searchPath: string) => string
+>searchPath : string
+
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;

 >createCompilerHost : (options: CompilerOptions, setParentNodes?: boolean) => CompilerHost
 >options : CompilerOptions
diff --git a/tests/baselines/reference/APISample_watcher.js b/tests/baselines/reference/APISample_watcher.js
index a821bc5011d..d2257c88a42 100644
--- a/tests/baselines/reference/APISample_watcher.js
+++ b/tests/baselines/reference/APISample_watcher.js
@@ -1544,6 +1544,7 @@ declare module "typescript" {
 declare module "typescript" {
     /** The version of the TypeScript compiler release */
     let version: string;
+    function findConfigFile(searchPath: string): string;
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;
     function getPreEmitDiagnostics(program: Program): Diagnostic[];
     function flattenDiagnosticMessageText(messageText: string | DiagnosticMessageChain, newLine: string): string;
diff --git a/tests/baselines/reference/APISample_watcher.types b/tests/baselines/reference/APISample_watcher.types
index 47e5a0147fd..aafd0df6560 100644
--- a/tests/baselines/reference/APISample_watcher.types
+++ b/tests/baselines/reference/APISample_watcher.types
@@ -5005,6 +5005,10 @@ declare module "typescript" {
     let version: string;

 >version : string
 
+    function findConfigFile(searchPath: string): string;

+>findConfigFile : (searchPath: string) => string
+>searchPath : string
+
     function createCompilerHost(options: CompilerOptions, setParentNodes?: boolean): CompilerHost;

 >createCompilerHost : (options: CompilerOptions, setParentNodes?: boolean) => CompilerHost
 >options : CompilerOptions