diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index 74bfdf3e961..9e9fb8e2ee2 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -341,8 +341,9 @@ namespace ts {
             type: "list",
             element: {
                 name: "typeRoots",
-                type: "string"
-            }            
+                type: "string",
+                isFilePath: true
+            }
         },
         {
             name: "types",
diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index f6cc048ace6..9cb000a4d61 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -217,9 +217,9 @@ namespace ts {
         // Check primary library paths
         if (typeRoots.length) {
             if (traceEnabled) {
-                trace(host, Diagnostics.Resolving_with_primary_search_path_0, typeRoots.join(', '));
+                trace(host, Diagnostics.Resolving_with_primary_search_path_0, typeRoots.join(", "));
             }
-            const primarySearchPaths = options.typeRoots || defaultTypeRoots;
+            const primarySearchPaths = typeRoots;
             for (const typeRoot of primarySearchPaths) {
                 const candidate = combinePaths(typeRoot, typeReferenceDirectiveName);
                 const candidateDirectory = getDirectoryPath(candidate);
diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index d9edd5a76c4..db34bb7c6e8 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -2562,7 +2562,7 @@ namespace ts {
         target?: ScriptTarget;
         traceResolution?: boolean;
         types?: string[];
-        // Paths used to used to compute primary types search locations
+        /** Paths used to used to compute primary types search locations */
         typeRoots?: string[];
         typesSearchPaths?: string[];
         /*@internal*/ version?: boolean;
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index 53b0c28671f..b887b5c7256 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -316,7 +316,7 @@ namespace ts.server {
         }
 
         getDirectories(path: string): string[] {
-            return this.host.getDirectories ? this.host.getDirectories(path) : [];
+            return this.host.getDirectories(path);
         }
 
         /**
diff --git a/src/services/services.ts b/src/services/services.ts
index 6d29310f93c..ba157afaf9f 100644
--- a/src/services/services.ts
+++ b/src/services/services.ts
@@ -2141,7 +2141,7 @@ namespace ts {
         const getCanonicalFileName = createGetCanonicalFileName(!!useCaseSensitiveFileNames);
 
         function getKeyForCompilationSettings(settings: CompilerOptions): DocumentRegistryBucketKey {
-            return <DocumentRegistryBucketKey>`_${settings.target}|${settings.module}|${settings.noResolve}|${settings.jsx}|${settings.allowJs}|${settings.baseUrl}|${settings.typeRoots}|${JSON.stringify(settings.rootDirs)}|${JSON.stringify(settings.paths)}`;
+            return <DocumentRegistryBucketKey>`_${settings.target}|${settings.module}|${settings.noResolve}|${settings.jsx}|${settings.allowJs}|${settings.baseUrl}|${JSON.stringify(settings.typeRoots)}|${JSON.stringify(settings.rootDirs)}|${JSON.stringify(settings.paths)}`;
         }
 
         function getBucketForCompilationSettings(key: DocumentRegistryBucketKey, createIfMissing: boolean): FileMap<DocumentRegistryEntry> {
diff --git a/tests/baselines/reference/library-reference-6.symbols b/tests/baselines/reference/library-reference-6.symbols
new file mode 100644
index 00000000000..595d43df3fa
--- /dev/null
+++ b/tests/baselines/reference/library-reference-6.symbols
@@ -0,0 +1,16 @@
+=== /src/foo.ts ===
+/// <reference types="alpha" />
+var x: string = alpha.a;
+>x : Symbol(x, Decl(foo.ts, 1, 3))
+>alpha.a : Symbol(a, Decl(index.d.ts, 3, 20))
+>alpha : Symbol(alpha, Decl(index.d.ts, 3, 11))
+>a : Symbol(a, Decl(index.d.ts, 3, 20))
+
+=== /node_modules/@types/alpha/index.d.ts ===
+
+// The primary lookup folder is relative to tsconfig.json, if present
+
+declare var alpha: { a: string };
+>alpha : Symbol(alpha, Decl(index.d.ts, 3, 11))
+>a : Symbol(a, Decl(index.d.ts, 3, 20))
+
diff --git a/tests/baselines/reference/library-reference-6.trace.json b/tests/baselines/reference/library-reference-6.trace.json
index fc29f3f2478..21843c2ecf4 100644
--- a/tests/baselines/reference/library-reference-6.trace.json
+++ b/tests/baselines/reference/library-reference-6.trace.json
@@ -2,27 +2,11 @@
     "======== Resolving type reference directive 'alpha', containing file '/src/foo.ts', root directory 'node_modules/@types'. ========",
     "Resolving with primary search path 'node_modules/@types'",
     "File 'node_modules/@types/alpha/package.json' does not exist.",
-    "File 'node_modules/@types/alpha/index.d.ts' does not exist.",
-    "Looking up in 'node_modules' folder, initial location '/src'",
-    "File '/src/node_modules/alpha.ts' does not exist.",
-    "File '/src/node_modules/alpha.d.ts' does not exist.",
-    "File '/src/node_modules/alpha/package.json' does not exist.",
-    "File '/src/node_modules/alpha/index.ts' does not exist.",
-    "File '/src/node_modules/alpha/index.d.ts' does not exist.",
-    "File '/src/node_modules/@types/alpha.ts' does not exist.",
-    "File '/src/node_modules/@types/alpha.d.ts' does not exist.",
-    "File '/src/node_modules/@types/alpha/package.json' does not exist.",
-    "File '/src/node_modules/@types/alpha/index.ts' does not exist.",
-    "File '/src/node_modules/@types/alpha/index.d.ts' does not exist.",
-    "File '/node_modules/alpha.ts' does not exist.",
-    "File '/node_modules/alpha.d.ts' does not exist.",
-    "File '/node_modules/alpha/package.json' does not exist.",
-    "File '/node_modules/alpha/index.ts' does not exist.",
-    "File '/node_modules/alpha/index.d.ts' does not exist.",
-    "File '/node_modules/@types/alpha.ts' does not exist.",
-    "File '/node_modules/@types/alpha.d.ts' does not exist.",
-    "File '/node_modules/@types/alpha/package.json' does not exist.",
-    "File '/node_modules/@types/alpha/index.ts' does not exist.",
-    "File '/node_modules/@types/alpha/index.d.ts' does not exist.",
-    "======== Type reference directive 'alpha' was not resolved. ========"
+    "File 'node_modules/@types/alpha/index.d.ts' exist - use it as a name resolution result.",
+    "======== Type reference directive 'alpha' was successfully resolved to 'node_modules/@types/alpha/index.d.ts', primary: true. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/src/__inferred type names__.ts', root directory 'node_modules/@types'. ========",
+    "Resolving with primary search path 'node_modules/@types'",
+    "File 'node_modules/@types/alpha/package.json' does not exist.",
+    "File 'node_modules/@types/alpha/index.d.ts' exist - use it as a name resolution result.",
+    "======== Type reference directive 'alpha' was successfully resolved to 'node_modules/@types/alpha/index.d.ts', primary: true. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-6.types b/tests/baselines/reference/library-reference-6.types
new file mode 100644
index 00000000000..e2762c0943a
--- /dev/null
+++ b/tests/baselines/reference/library-reference-6.types
@@ -0,0 +1,16 @@
+=== /src/foo.ts ===
+/// <reference types="alpha" />
+var x: string = alpha.a;
+>x : string
+>alpha.a : string
+>alpha : { a: string; }
+>a : string
+
+=== /node_modules/@types/alpha/index.d.ts ===
+
+// The primary lookup folder is relative to tsconfig.json, if present
+
+declare var alpha: { a: string };
+>alpha : { a: string; }
+>a : string
+
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions.trace.json
index 6e6589d7c1f..7dc9e8c104b 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions.trace.json
@@ -3,11 +3,13 @@
     "Module resolution kind is not specified, using 'NodeJs'.",
     "Loading module as file / folder, candidate module location '/src/a'.",
     "File '/src/a.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/src/a.ts', result '/src/a.ts'",
     "======== Module name './a' was successfully resolved to '/src/a.ts'. ========",
     "======== Resolving module './a.ts' from '/src/c.ts'. ========",
     "Module resolution kind is not specified, using 'NodeJs'.",
     "Loading module as file / folder, candidate module location '/src/a.ts'.",
     "File '/src/a.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/src/a.ts', result '/src/a.ts'",
     "======== Module name './a.ts' was successfully resolved to '/src/a.ts'. ========",
     "======== Resolving module './a.js' from '/src/d.ts'. ========",
     "Module resolution kind is not specified, using 'NodeJs'.",
@@ -17,6 +19,7 @@
     "File '/src/a.js.d.ts' does not exist.",
     "File name '/src/a.js' has a '.js' extension - stripping it",
     "File '/src/a.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/src/a.ts', result '/src/a.ts'",
     "======== Module name './a.js' was successfully resolved to '/src/a.ts'. ========",
     "======== Resolving module './jquery.js' from '/src/jquery_user_1.ts'. ========",
     "Module resolution kind is not specified, using 'NodeJs'.",
@@ -28,5 +31,6 @@
     "File '/src/jquery.ts' does not exist.",
     "File '/src/jquery.tsx' does not exist.",
     "File '/src/jquery.d.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/src/jquery.d.ts', result '/src/jquery.d.ts'",
     "======== Module name './jquery.js' was successfully resolved to '/src/jquery.d.ts'. ========"
 ]
\ No newline at end of file