diff --git a/src/harness/virtualFileSystemWithWatch.ts b/src/harness/virtualFileSystemWithWatch.ts
index ff3e6654ed2..7d7f405b9bd 100644
--- a/src/harness/virtualFileSystemWithWatch.ts
+++ b/src/harness/virtualFileSystemWithWatch.ts
@@ -55,7 +55,6 @@ interface Array<T> { length: number; [n: number]: T; }`
 
     export function createVirtualServerHost(params: VirtualServerHostCreationParameters): VirtualServerHost {
         const host = new VirtualServerHost(params);
-        host.init();
         // Just like sys, patch the host to use writeFile
         patchWriteFileEnsuringDirectory(host);
         return host;
@@ -303,7 +302,7 @@ interface Array<T> { length: number; [n: number]: T; }`
 
     export const timeIncrements = 1000;
 
-    export class TestServerHost extends VirtualServerHost implements server.ServerHost {
+    export class TestServerHost extends VirtualServerBaseHost implements server.ServerHost {
         readonly screenClears: number[] = [];
         private readonly output: string[] = [];
         private time = timeIncrements;
@@ -332,11 +331,6 @@ interface Array<T> { length: number; [n: number]: T; }`
             this.runWithoutRecursiveWatches = runWithoutRecursiveWatches;
             this.runWithFallbackPolling = !!runWithFallbackPolling;
             this.environmentVariables = environmentVariables;
-            this.init();
-            this.reloadFS(fileOrFolderOrSymLinkList);
-        }
-
-        override init() {
             const { watchFile, watchDirectory } = createSystemWatchFunctions({
                 // We dont have polling watch file
                 // it is essentially fsWatch but lets get that separate from fsWatch and
@@ -364,6 +358,7 @@ interface Array<T> { length: number; [n: number]: T; }`
             });
             this.watchFile = watchFile;
             this.watchDirectory = watchDirectory;
+            this.reloadFS(fileOrFolderOrSymLinkList);
         }
 
         getTime() {
diff --git a/src/tsserver/server.ts b/src/tsserver/server.ts
index 522e135ff90..64847ea1ae6 100644
--- a/src/tsserver/server.ts
+++ b/src/tsserver/server.ts
@@ -65,7 +65,6 @@ namespace ts.server {
                 executingFilePath: "", // TODO: "" is the default..maybe this should be vfs, vfs:// or .
                 newLine: sys.newLine,
             });
-            fshost.init();
         }
         else {
             fshost = sys as ServerHost;
diff --git a/src/tsserver/webServer.ts b/src/tsserver/webServer.ts
index 4a6512318b4..a3ea20191b4 100644
--- a/src/tsserver/webServer.ts
+++ b/src/tsserver/webServer.ts
@@ -16,6 +16,7 @@ namespace ts.server {
     };
 
     function parseServerMode(): LanguageServiceMode | string | undefined {
+        if (hasArgument("--vfs")) return LanguageServiceMode.Semantic;
         const mode = findArgument("--serverMode");
         if (!mode) return undefined;
         switch (mode.toLowerCase()) {
@@ -72,6 +73,7 @@ namespace ts.server {
             },
             writeMessage,
         };
+
         // Do this after sys has been set as findArguments is going to work only then
         const sys = server.createWebSystem(webHost, args, () => findArgument("--executingFilePath") || location + "");
         setSys(sys);
diff --git a/src/vfs/virtualFileSystemWithWatch.ts b/src/vfs/virtualFileSystemWithWatch.ts
index fc7645d5ada..dc4f48cdaee 100644
--- a/src/vfs/virtualFileSystemWithWatch.ts
+++ b/src/vfs/virtualFileSystemWithWatch.ts
@@ -117,9 +117,12 @@ namespace ts.VirtualFS {
     }
 
     /**
+     * Use TestServerHost for tests or VirtualServerHost for virtual file systems.
+     * This is a base for those two classes.
+     *
      * also implements {server.ServerHost} but that would create a circular dependency
      */
-    export class VirtualServerHost implements FormatDiagnosticsHost, ModuleResolutionHost {
+    export abstract class VirtualServerBaseHost implements FormatDiagnosticsHost, ModuleResolutionHost {
         args: string[] = [];
 
         protected fs: ESMap<Path, FSEntry> = new Map();
@@ -152,31 +155,6 @@ namespace ts.VirtualFS {
             this.currentDirectory = this.getHostSpecificPath(currentDirectory);
         }
 
-        init() {
-            const { watchFile, watchDirectory } = createSystemWatchFunctions({
-                // We dont have polling watch file
-                // it is essentially fsWatch but lets get that separate from fsWatch and
-                // into watchedFiles for easier testing
-                pollingWatchFile: this.watchFileWorker.bind(this),
-                getModifiedTime: this.getModifiedTime.bind(this),
-                setTimeout: this.setTimeout.bind(this),
-                clearTimeout: this.clearTimeout.bind(this),
-                fsWatch: this.fsWatch.bind(this),
-                fileExists: this.fileExists.bind(this),
-                useCaseSensitiveFileNames: this.useCaseSensitiveFileNames,
-                getCurrentDirectory: this.getCurrentDirectory.bind(this),
-                fsSupportsRecursiveFsWatch: true,
-                directoryExists: this.directoryExists.bind(this),
-                getAccessibleSortedChildDirectories: path => this.getDirectories(path),
-                realpath: this.realpath.bind(this),
-                tscWatchFile: undefined,
-                tscWatchDirectory: undefined,
-                defaultWatchFileKind: () => undefined,
-            });
-            this.watchFile = watchFile;
-            this.watchDirectory = watchDirectory;
-        }
-
         getNewLine() {
             return this.newLine;
         }
@@ -640,6 +618,34 @@ namespace ts.VirtualFS {
         }
     }
 
+    export class VirtualServerHost extends VirtualServerBaseHost {
+        constructor(options: VirtualServerHostCreationParameters) {
+            super(options)
+            const { watchFile, watchDirectory } = createSystemWatchFunctions({
+                // We dont have polling watch file
+                // it is essentially fsWatch but lets get that separate from fsWatch and
+                // into watchedFiles for easier testing
+                pollingWatchFile: this.watchFileWorker.bind(this),
+                getModifiedTime: this.getModifiedTime.bind(this),
+                setTimeout: this.setTimeout.bind(this),
+                clearTimeout: this.clearTimeout.bind(this),
+                fsWatch: this.fsWatch.bind(this),
+                fileExists: this.fileExists.bind(this),
+                useCaseSensitiveFileNames: this.useCaseSensitiveFileNames,
+                getCurrentDirectory: this.getCurrentDirectory.bind(this),
+                fsSupportsRecursiveFsWatch: true,
+                directoryExists: this.directoryExists.bind(this),
+                getAccessibleSortedChildDirectories: path => this.getDirectories(path),
+                realpath: this.realpath.bind(this),
+                tscWatchFile: undefined,
+                tscWatchDirectory: undefined,
+                defaultWatchFileKind: () => undefined,
+            });
+            this.watchFile = watchFile;
+            this.watchDirectory = watchDirectory;
+        }
+    }
+
     function diffFsFile(baseline: string[], fsEntry: FsFile) {
         baseline.push(`//// [${fsEntry.fullPath}]\r\n${fsEntry.content}`, "");
     }
diff --git a/src/webServer/webServer.ts b/src/webServer/webServer.ts
index ad1361be966..adc3a10b8b2 100644
--- a/src/webServer/webServer.ts
+++ b/src/webServer/webServer.ts
@@ -184,7 +184,6 @@ namespace ts.server {
                 fshost,
                 cancellationToken,
                 ...options,
-                serverMode: fshost instanceof VirtualFS.VirtualServerHost ? LanguageServiceMode.Semantic : options.serverMode,
                 typingsInstaller: nullTypingsInstaller,
                 byteLength: notImplemented, // Formats the message text in send of Session which is overriden in this class so not needed
                 hrtime,