diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 270de264ad5..8bc84469c6a 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -8023,9 +8023,27 @@ module ts {
             }
         }
 
+        function isYieldExpressionInClass(node: YieldExpression): boolean {
+            let current: Node = node
+            let parent = node.parent;
+            while (parent) { 
+                if (isFunctionLike(parent) && current === (<FunctionLikeDeclaration>parent).body) {
+                    return false;
+                }
+                else if (current.kind === SyntaxKind.ClassDeclaration || current.kind === SyntaxKind.ClassExpression) {
+                    return true;
+                }
+
+                current = parent;
+                parent = parent.parent;
+            }
+
+            return false;
+        }
+
         function checkYieldExpression(node: YieldExpression): Type {
             // Grammar checking
-            if (!(node.parserContextFlags & ParserContextFlags.Yield)) {
+            if (!(node.parserContextFlags & ParserContextFlags.Yield) || isYieldExpressionInClass(node)) {
                 grammarErrorOnFirstToken(node, Diagnostics.A_yield_expression_is_only_allowed_in_a_generator_declaration);
             }
 
diff --git a/src/compiler/parser.ts b/src/compiler/parser.ts
index 055fc1b6f74..e70597cb432 100644
--- a/src/compiler/parser.ts
+++ b/src/compiler/parser.ts
@@ -4010,7 +4010,20 @@ module ts {
             property.name = name;
             property.questionToken = questionToken;
             property.type = parseTypeAnnotation();
-            property.initializer = allowInAnd(parseNonParameterInitializer);
+
+            // For initializers, we always want to allow 'in' expressions. For instance properties specifically,
+            // since they are evaluated inside the constructor, we do *not* want to parse yield expressions,
+            // so we specifically turn the yield context off. The grammar would look something like this:
+            //
+            //    MemberVariableDeclaration[Yield]:
+            //        AccessibilityModifier_opt   PropertyName   TypeAnnotation_opt   Initialiser_opt[In];
+            //        AccessibilityModifier_opt  static_opt  PropertyName   TypeAnnotation_opt   Initialiser_opt[In, ?Yield];
+            //
+            // The checker may still error in the static case to explicitly disallow the yield expression.
+            property.initializer = modifiers && modifiers.flags & NodeFlags.Static
+                ? allowInAnd(parseNonParameterInitializer)
+                : doOutsideOfContext(ParserContextFlags.Yield | ParserContextFlags.DisallowIn, parseNonParameterInitializer);
+
             parseSemicolon();
             return finishNode(property);
         }
diff --git a/src/compiler/utilities.ts b/src/compiler/utilities.ts
index 14968210a0b..98864b20d85 100644
--- a/src/compiler/utilities.ts
+++ b/src/compiler/utilities.ts
@@ -530,11 +530,6 @@ module ts {
         return traverse(body);
 
         function traverse(node: Node): void {
-            // Yield expressions may occur in decorators
-            if (node.decorators) {
-                forEach(node.decorators, traverse);
-            }
-
             switch (node.kind) {
                 case SyntaxKind.YieldExpression:
                     visitor(<YieldExpression>node);
@@ -546,18 +541,17 @@ module ts {
                 case SyntaxKind.InterfaceDeclaration:
                 case SyntaxKind.ModuleDeclaration:
                 case SyntaxKind.TypeAliasDeclaration:
+                case SyntaxKind.ClassDeclaration:
                     // These are not allowed inside a generator now, but eventually they may be allowed
                     // as local types. Regardless, any yield statements contained within them should be
                     // skipped in this traversal.
                     return;
-                case SyntaxKind.ClassDeclaration:
-                    // A class declaration/expression may extend a yield expression
-                    forEach((<ClassDeclaration>node).heritageClauses, traverse);
-                    return;
                 default:
                     if (isFunctionLike(node)) {
                         let name = (<FunctionLikeDeclaration>node).name;
                         if (name && name.kind === SyntaxKind.ComputedPropertyName) {
+                            // Note that we will not include methods/accessors of a class because they would require
+                            // first descending into the class. This is by design.
                             traverse((<ComputedPropertyName>name).expression);
                             return;
                         }
diff --git a/tests/baselines/reference/generatorTypeCheck55.errors.txt b/tests/baselines/reference/generatorTypeCheck55.errors.txt
new file mode 100644
index 00000000000..0846d1c28ad
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck55.errors.txt
@@ -0,0 +1,9 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck55.ts(2,19): error TS9003: 'class' expressions are not currently supported.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck55.ts (1 errors) ====
+    function* g() {
+        var x = class C extends (yield) {};
+                      ~
+!!! error TS9003: 'class' expressions are not currently supported.
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck55.js b/tests/baselines/reference/generatorTypeCheck55.js
new file mode 100644
index 00000000000..dd7cd33af29
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck55.js
@@ -0,0 +1,11 @@
+//// [generatorTypeCheck55.ts]
+function* g() {
+    var x = class C extends (yield) {};
+}
+
+//// [generatorTypeCheck55.js]
+function* g() {
+    var x = class C extends (yield) {
+    }
+    ;
+}
diff --git a/tests/baselines/reference/generatorTypeCheck56.errors.txt b/tests/baselines/reference/generatorTypeCheck56.errors.txt
new file mode 100644
index 00000000000..c5ab01662bd
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck56.errors.txt
@@ -0,0 +1,16 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck56.ts(2,19): error TS9003: 'class' expressions are not currently supported.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck56.ts(3,11): error TS1163: A 'yield' expression is only allowed in a generator declaration.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck56.ts (2 errors) ====
+    function* g() {
+        var x = class C {
+                      ~
+!!! error TS9003: 'class' expressions are not currently supported.
+            *[yield 0]() {
+              ~~~~~
+!!! error TS1163: A 'yield' expression is only allowed in a generator declaration.
+                yield 0;
+            }
+        };
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck56.js b/tests/baselines/reference/generatorTypeCheck56.js
new file mode 100644
index 00000000000..c1b0f98f5e7
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck56.js
@@ -0,0 +1,18 @@
+//// [generatorTypeCheck56.ts]
+function* g() {
+    var x = class C {
+        *[yield 0]() {
+            yield 0;
+        }
+    };
+}
+
+//// [generatorTypeCheck56.js]
+function* g() {
+    var x = class C {
+        *[yield 0]() {
+            yield 0;
+        }
+    }
+    ;
+}
diff --git a/tests/baselines/reference/generatorTypeCheck57.errors.txt b/tests/baselines/reference/generatorTypeCheck57.errors.txt
new file mode 100644
index 00000000000..9734f445537
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck57.errors.txt
@@ -0,0 +1,14 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts(3,13): error TS1163: A 'yield' expression is only allowed in a generator declaration.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts (2 errors) ====
+    function* g() {
+        class C {
+              ~
+!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+            x = yield 0;
+                ~~~~~
+!!! error TS1163: A 'yield' expression is only allowed in a generator declaration.
+        };
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck57.js b/tests/baselines/reference/generatorTypeCheck57.js
new file mode 100644
index 00000000000..740df492867
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck57.js
@@ -0,0 +1,16 @@
+//// [generatorTypeCheck57.ts]
+function* g() {
+    class C {
+        x = yield 0;
+    };
+}
+
+//// [generatorTypeCheck57.js]
+function* g() {
+    class C {
+        constructor() {
+            this.x = yield 0;
+        }
+    }
+    ;
+}
diff --git a/tests/baselines/reference/generatorTypeCheck58.errors.txt b/tests/baselines/reference/generatorTypeCheck58.errors.txt
new file mode 100644
index 00000000000..f091857cec3
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck58.errors.txt
@@ -0,0 +1,14 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts(3,20): error TS1163: A 'yield' expression is only allowed in a generator declaration.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts (2 errors) ====
+    function* g() {
+        class C {
+              ~
+!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+            static x = yield 0;
+                       ~~~~~
+!!! error TS1163: A 'yield' expression is only allowed in a generator declaration.
+        };
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck58.js b/tests/baselines/reference/generatorTypeCheck58.js
new file mode 100644
index 00000000000..925fc2b76d2
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck58.js
@@ -0,0 +1,14 @@
+//// [generatorTypeCheck58.ts]
+function* g() {
+    class C {
+        static x = yield 0;
+    };
+}
+
+//// [generatorTypeCheck58.js]
+function* g() {
+    class C {
+    }
+    C.x = yield 0;
+    ;
+}
diff --git a/tests/baselines/reference/generatorTypeCheck59.errors.txt b/tests/baselines/reference/generatorTypeCheck59.errors.txt
new file mode 100644
index 00000000000..541fb491af6
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck59.errors.txt
@@ -0,0 +1,15 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts(3,11): error TS1163: A 'yield' expression is only allowed in a generator declaration.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts (2 errors) ====
+    function* g() {
+        class C {
+              ~
+!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+            @(yield "")
+              ~~~~~
+!!! error TS1163: A 'yield' expression is only allowed in a generator declaration.
+            m() { }
+        };
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck59.js b/tests/baselines/reference/generatorTypeCheck59.js
new file mode 100644
index 00000000000..5b3b70386f8
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck59.js
@@ -0,0 +1,27 @@
+//// [generatorTypeCheck59.ts]
+function* g() {
+    class C {
+        @(yield "")
+        m() { }
+    };
+}
+
+//// [generatorTypeCheck59.js]
+var __decorate = (this && this.__decorate) || function (decorators, target, key, desc) {
+    if (typeof Reflect === "object" && typeof Reflect.decorate === "function") return Reflect.decorate(decorators, target, key, desc);
+    switch (arguments.length) {
+        case 2: return decorators.reduceRight(function(o, d) { return (d && d(o)) || o; }, target);
+        case 3: return decorators.reduceRight(function(o, d) { return (d && d(target, key)), void 0; }, void 0);
+        case 4: return decorators.reduceRight(function(o, d) { return (d && d(target, key, o)) || o; }, desc);
+    }
+};
+function* g() {
+    class C {
+        m() { }
+    }
+    Object.defineProperty(C.prototype, "m",
+        __decorate([
+            (yield "")
+        ], C.prototype, "m", Object.getOwnPropertyDescriptor(C.prototype, "m")));
+    ;
+}
diff --git a/tests/baselines/reference/generatorTypeCheck60.errors.txt b/tests/baselines/reference/generatorTypeCheck60.errors.txt
new file mode 100644
index 00000000000..39724d9ac6d
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck60.errors.txt
@@ -0,0 +1,12 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts(2,21): error TS9002: Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts (2 errors) ====
+    function* g() {
+        class C extends (yield) {};
+              ~
+!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
+                        ~~~~~~~
+!!! error TS9002: Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses.
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck60.js b/tests/baselines/reference/generatorTypeCheck60.js
new file mode 100644
index 00000000000..cb7c65cf081
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck60.js
@@ -0,0 +1,11 @@
+//// [generatorTypeCheck60.ts]
+function* g() {
+    class C extends (yield) {};
+}
+
+//// [generatorTypeCheck60.js]
+function* g() {
+    class C extends (yield) {
+    }
+    ;
+}
diff --git a/tests/baselines/reference/generatorTypeCheck61.errors.txt b/tests/baselines/reference/generatorTypeCheck61.errors.txt
new file mode 100644
index 00000000000..3c9f3819d61
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck61.errors.txt
@@ -0,0 +1,22 @@
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,5): error TS1129: Statement expected.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,12): error TS1146: Declaration expected.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,13): error TS1005: ')' expected.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,14): error TS1005: ';' expected.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(4,1): error TS1128: Declaration or statement expected.
+
+
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts (5 errors) ====
+    function * g() {
+        @(yield 0)
+        ~
+!!! error TS1129: Statement expected.
+               
+!!! error TS1146: Declaration expected.
+                ~
+!!! error TS1005: ')' expected.
+                 ~
+!!! error TS1005: ';' expected.
+        class C {};
+    }
+    ~
+!!! error TS1128: Declaration or statement expected.
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck61.js b/tests/baselines/reference/generatorTypeCheck61.js
new file mode 100644
index 00000000000..591e52f269e
--- /dev/null
+++ b/tests/baselines/reference/generatorTypeCheck61.js
@@ -0,0 +1,12 @@
+//// [generatorTypeCheck61.ts]
+function * g() {
+    @(yield 0)
+    class C {};
+}
+
+//// [generatorTypeCheck61.js]
+function* g() { }
+0;
+class C {
+}
+;
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck55.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck55.ts
new file mode 100644
index 00000000000..2041764a2f9
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck55.ts
@@ -0,0 +1,4 @@
+//@target: ES6
+function* g() {
+    var x = class C extends (yield) {};
+}
\ No newline at end of file
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck56.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck56.ts
new file mode 100644
index 00000000000..7aa66480a16
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck56.ts
@@ -0,0 +1,8 @@
+//@target: ES6
+function* g() {
+    var x = class C {
+        *[yield 0]() {
+            yield 0;
+        }
+    };
+}
\ No newline at end of file
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts
new file mode 100644
index 00000000000..f972a2a60e3
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts
@@ -0,0 +1,6 @@
+//@target: ES6
+function* g() {
+    class C {
+        x = yield 0;
+    };
+}
\ No newline at end of file
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts
new file mode 100644
index 00000000000..081979be505
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts
@@ -0,0 +1,6 @@
+//@target: ES6
+function* g() {
+    class C {
+        static x = yield 0;
+    };
+}
\ No newline at end of file
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts
new file mode 100644
index 00000000000..81aacecd7a3
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts
@@ -0,0 +1,7 @@
+//@target: ES6
+function* g() {
+    class C {
+        @(yield "")
+        m() { }
+    };
+}
\ No newline at end of file
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts
new file mode 100644
index 00000000000..36747936f17
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts
@@ -0,0 +1,4 @@
+//@target: ES6
+function* g() {
+    class C extends (yield) {};
+}
\ No newline at end of file
diff --git a/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts
new file mode 100644
index 00000000000..31c36e2a626
--- /dev/null
+++ b/tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts
@@ -0,0 +1,5 @@
+//@target: ES6
+function * g() {
+    @(yield 0)
+    class C {};
+}
\ No newline at end of file