diff --git a/src/harness/assert.ts b/src/harness/assert.ts
new file mode 100644
index 00000000000..6e3be2b6e12
--- /dev/null
+++ b/src/harness/assert.ts
@@ -0,0 +1,117 @@
+/// <reference path="./harness.ts" />
+declare namespace Chai {
+    interface ChaiStatic {
+        util: UtilStatic;
+    }
+
+    interface UtilStatic {
+        objDisplay(obj: any): string;
+    }
+
+    interface AssertStatic {
+        sameMembers<T>(actual: Iterable<T>, expected: Iterable<T>, message?: string): void;
+        notSameMembers<T>(actual: Iterable<T>, expected: Iterable<T>, message?: string): void;
+        includeMembersOnce<T>(actual: Iterable<T>, expected: Iterable<T>, message?: string): void;
+        includeMembers<T>(actual: Iterable<T>, expected: Iterable<T>, message?: string): void;
+        notIncludeMembers<T>(actual: Iterable<T>, expected: Iterable<T>, message?: string): void;
+    }
+}
+
+// patch assert.sameMembers to support other iterables
+_chai.use((chai: Chai.ChaiStatic, util: Chai.UtilStatic) => {
+    function isIdenticalTo<T>(left: Iterable<T>, right: Iterable<T>) {
+        if (!(left instanceof core.SortedSet) && right instanceof core.SortedSet) {
+            [left, right] = [right, left];
+        }
+
+        const set = asReadonlySet(left);
+        const seen = set instanceof core.SortedSet ? new core.SortedSet<T>(set.comparer) : new Set<T>();
+        const iterator = Array.isArray(right) ? ts.arrayIterator(right) : right[Symbol.iterator]();
+        for (let { value, done } = iterator.next(); !done; { value, done } = iterator.next()) {
+            if (!set.has(value)) return false;
+            seen.add(value);
+        }
+        return set.size === seen.size;
+    }
+
+    function isSubsetOf<T>(subset: Iterable<T>, superset: Iterable<T>, unique?: boolean) {
+        const set = asReadonlySet(superset);
+        const seen = unique ? set instanceof core.SortedSet ? new core.SortedSet<T>(set.comparer) : new Set<T>() : undefined;
+        const iterator = Array.isArray(subset) ? ts.arrayIterator(subset) : subset[Symbol.iterator]();
+        for (let { value, done } = iterator.next(); !done; { value, done } = iterator.next()) {
+            if (!set.has(value)) return false;
+            if (seen) {
+                if (seen.has(value)) return false;
+                seen.add(value);
+            }
+        }
+        return true;
+    }
+
+    function overlaps<T>(left: Iterable<T>, right: Iterable<T>) {
+        if (!(left instanceof core.SortedSet) && right instanceof core.SortedSet) {
+            [left, right] = [right, left];
+        }
+
+        const set = asReadonlySet(left);
+        const iterator = Array.isArray(right) ? ts.arrayIterator(right) : right[Symbol.iterator]();
+        for (let { value, done } = iterator.next(); !done; { value, done } = iterator.next()) {
+            if (set.has(value)) return true;
+        }
+        return false;
+    }
+
+    function asReadonlySet<T>(iterable: Iterable<T>): ReadonlySet<T> {
+        return iterable instanceof Set ? iterable :
+            iterable instanceof core.SortedSet ? iterable :
+            new Set(iterable);
+    }
+
+    function asReadonlyArray<T>(iterable: Iterable<T>): ReadonlyArray<T> {
+        return Array.isArray(iterable) ? iterable : Array.from(iterable);
+    }
+
+    // patch `assert.sameMembers` to support any iterable
+    chai.assert.sameMembers = <T>(actual: Iterable<T>, expected: Iterable<T>, message?: string) => {
+        if (!isIdenticalTo(actual, expected)) {
+            actual = asReadonlyArray(actual);
+            expected = asReadonlyArray(expected);
+            assert.fail(actual, expected, message || `expected ${util.objDisplay(actual)} to have the same members as ${util.objDisplay(expected)}`);
+        }
+    };
+
+    // patch `assert.notSameMembers` to support any iterable
+    chai.assert.notSameMembers = <T>(actual: Iterable<T>, expected: Iterable<T>, message?: string) => {
+        if (isIdenticalTo(actual, expected)) {
+            actual = asReadonlyArray(actual);
+            expected = asReadonlyArray(expected);
+            assert.fail(actual, expected, message || `expected ${util.objDisplay(actual)} to not have the same members as ${util.objDisplay(expected)}`);
+        }
+    };
+
+    chai.assert.includeMembersOnce = <T>(actual: Iterable<T>, expected: Iterable<T>, message?: string) => {
+        if (!isSubsetOf(expected, actual, /*unique*/ true)) {
+            actual = asReadonlyArray(actual);
+            expected = asReadonlyArray(expected);
+            assert.fail(actual, expected, message || `expected ${util.objDisplay(actual)} to include the members of ${util.objDisplay(expected)} only once`);
+        }
+    };
+
+    // patch `assert.includeMembers` to support any iterable
+    chai.assert.includeMembers = <T>(actual: Iterable<T>, expected: Iterable<T>, message?: string) => {
+        if (!isSubsetOf(expected, actual)) {
+            actual = asReadonlyArray(actual);
+            expected = asReadonlyArray(expected);
+            assert.fail(actual, expected, message || `expected ${util.objDisplay(actual)} to include the members of ${util.objDisplay(expected)}`);
+        }
+    };
+
+    // patch `assert.notIncludeMembers` to support any iterable
+    chai.assert.notIncludeMembers = <T>(actual: Iterable<T>, expected: Iterable<T>, message?: string) => {
+        if (overlaps(expected, actual)) {
+            actual = asReadonlyArray(actual);
+            expected = asReadonlyArray(expected);
+            assert.fail(actual, expected, message || `expected ${util.objDisplay(actual)} to not include the members of ${util.objDisplay(expected)}`);
+        }
+    };
+});
\ No newline at end of file
diff --git a/src/harness/virtualFileSystemWithWatch.ts b/src/harness/virtualFileSystemWithWatch.ts
new file mode 100644
index 00000000000..381917d71c7
--- /dev/null
+++ b/src/harness/virtualFileSystemWithWatch.ts
@@ -0,0 +1,778 @@
+/// <reference path="harness.ts" />
+
+namespace ts.TestFSWithWatch {
+    export const libFile: FileOrFolder = {
+        path: "/a/lib/lib.d.ts",
+        content: `/// <reference no-default-lib="true"/>
+interface Boolean {}
+interface Function {}
+interface IArguments {}
+interface Number { toExponential: any; }
+interface Object {}
+interface RegExp {}
+interface String { charAt: any; }
+interface Array<T> {}`
+    };
+
+    export const safeList = {
+        path: <Path>"/safeList.json",
+        content: JSON.stringify({
+            commander: "commander",
+            express: "express",
+            jquery: "jquery",
+            lodash: "lodash",
+            moment: "moment",
+            chroma: "chroma-js"
+        })
+    };
+
+    function getExecutingFilePathFromLibFile(): string {
+        return combinePaths(getDirectoryPath(libFile.path), "tsc.js");
+    }
+
+    interface TestServerHostCreationParameters {
+        useCaseSensitiveFileNames?: boolean;
+        executingFilePath?: string;
+        currentDirectory?: string;
+        newLine?: string;
+        useWindowsStylePaths?: boolean;
+    }
+
+    export function createWatchedSystem(fileOrFolderList: ReadonlyArray<FileOrFolder>, params?: TestServerHostCreationParameters): TestServerHost {
+        if (!params) {
+            params = {};
+        }
+        const host = new TestServerHost(/*withSafelist*/ false,
+            params.useCaseSensitiveFileNames !== undefined ? params.useCaseSensitiveFileNames : false,
+            params.executingFilePath || getExecutingFilePathFromLibFile(),
+            params.currentDirectory || "/",
+            fileOrFolderList,
+            params.newLine,
+            params.useWindowsStylePaths);
+        return host;
+    }
+
+    export function createServerHost(fileOrFolderList: ReadonlyArray<FileOrFolder>, params?: TestServerHostCreationParameters): TestServerHost {
+        if (!params) {
+            params = {};
+        }
+        const host = new TestServerHost(/*withSafelist*/ true,
+            params.useCaseSensitiveFileNames !== undefined ? params.useCaseSensitiveFileNames : false,
+            params.executingFilePath || getExecutingFilePathFromLibFile(),
+            params.currentDirectory || "/",
+            fileOrFolderList,
+            params.newLine,
+            params.useWindowsStylePaths);
+        return host;
+    }
+
+    export interface FileOrFolder {
+        path: string;
+        content?: string;
+        fileSize?: number;
+        symLink?: string;
+    }
+
+    interface FSEntry {
+        path: Path;
+        fullPath: string;
+    }
+
+    interface File extends FSEntry {
+        content: string;
+        fileSize?: number;
+    }
+
+    interface Folder extends FSEntry {
+        entries: FSEntry[];
+    }
+
+    interface SymLink extends FSEntry {
+        symLink: string;
+    }
+
+    function isFolder(s: FSEntry): s is Folder {
+        return s && isArray((<Folder>s).entries);
+    }
+
+    function isFile(s: FSEntry): s is File {
+        return s && isString((<File>s).content);
+    }
+
+    function isSymLink(s: FSEntry): s is SymLink {
+        return s && isString((<SymLink>s).symLink);
+    }
+
+    function invokeWatcherCallbacks<T>(callbacks: T[], invokeCallback: (cb: T) => void): void {
+        if (callbacks) {
+            // The array copy is made to ensure that even if one of the callback removes the callbacks,
+            // we dont miss any callbacks following it
+            const cbs = callbacks.slice();
+            for (const cb of cbs) {
+                invokeCallback(cb);
+            }
+        }
+    }
+
+    function getDiffInKeys<T>(map: Map<T>, expectedKeys: ReadonlyArray<string>) {
+        if (map.size === expectedKeys.length) {
+            return "";
+        }
+        const notInActual: string[] = [];
+        const duplicates: string[] = [];
+        const seen = createMap<true>();
+        forEach(expectedKeys, expectedKey => {
+            if (seen.has(expectedKey)) {
+                duplicates.push(expectedKey);
+                return;
+            }
+            seen.set(expectedKey, true);
+            if (!map.has(expectedKey)) {
+                notInActual.push(expectedKey);
+            }
+        });
+        const inActualNotExpected: string[] = [];
+        map.forEach((_value, key) => {
+            if (!seen.has(key)) {
+                inActualNotExpected.push(key);
+            }
+            seen.set(key, true);
+        });
+        return `\n\nNotInActual: ${notInActual}\nDuplicates: ${duplicates}\nInActualButNotInExpected: ${inActualNotExpected}`;
+    }
+
+    export function verifyMapSize(caption: string, map: Map<any>, expectedKeys: ReadonlyArray<string>) {
+        assert.equal(map.size, expectedKeys.length, `${caption}: incorrect size of map: Actual keys: ${arrayFrom(map.keys())} Expected: ${expectedKeys}${getDiffInKeys(map, expectedKeys)}`);
+    }
+
+    function checkMapKeys(caption: string, map: Map<any>, expectedKeys: ReadonlyArray<string>) {
+        verifyMapSize(caption, map, expectedKeys);
+        for (const name of expectedKeys) {
+            assert.isTrue(map.has(name), `${caption} is expected to contain ${name}, actual keys: ${arrayFrom(map.keys())}`);
+        }
+    }
+
+    export function checkFileNames(caption: string, actualFileNames: ReadonlyArray<string>, expectedFileNames: string[]) {
+        assert.equal(actualFileNames.length, expectedFileNames.length, `${caption}: incorrect actual number of files, expected:\r\n${expectedFileNames.join("\r\n")}\r\ngot: ${actualFileNames.join("\r\n")}`);
+        for (const f of expectedFileNames) {
+            assert.equal(true, contains(actualFileNames, f), `${caption}: expected to find ${f} in ${actualFileNames}`);
+        }
+    }
+
+    export function checkWatchedFiles(host: TestServerHost, expectedFiles: string[]) {
+        checkMapKeys("watchedFiles", host.watchedFiles, expectedFiles);
+    }
+
+    export function checkWatchedDirectories(host: TestServerHost, expectedDirectories: string[], recursive = false) {
+        checkMapKeys(`watchedDirectories${recursive ? " recursive" : ""}`, recursive ? host.watchedDirectoriesRecursive : host.watchedDirectories, expectedDirectories);
+    }
+
+    export function checkOutputContains(host: TestServerHost, expected: ReadonlyArray<string>) {
+        const mapExpected = arrayToSet(expected);
+        const mapSeen = createMap<true>();
+        for (const f of host.getOutput()) {
+            assert.isUndefined(mapSeen.get(f), `Already found ${f} in ${JSON.stringify(host.getOutput())}`);
+            if (mapExpected.has(f)) {
+                mapExpected.delete(f);
+                mapSeen.set(f, true);
+            }
+        }
+        assert.equal(mapExpected.size, 0, `Output has missing ${JSON.stringify(arrayFrom(mapExpected.keys()))} in ${JSON.stringify(host.getOutput())}`);
+    }
+
+    export function checkOutputDoesNotContain(host: TestServerHost, expectedToBeAbsent: string[] | ReadonlyArray<string>) {
+        const mapExpectedToBeAbsent = arrayToSet(expectedToBeAbsent);
+        for (const f of host.getOutput()) {
+            assert.isFalse(mapExpectedToBeAbsent.has(f), `Contains ${f} in ${JSON.stringify(host.getOutput())}`);
+        }
+    }
+
+    class Callbacks {
+        private map: TimeOutCallback[] = [];
+        private nextId = 1;
+
+        getNextId() {
+            return this.nextId;
+        }
+
+        register(cb: (...args: any[]) => void, args: any[]) {
+            const timeoutId = this.nextId;
+            this.nextId++;
+            this.map[timeoutId] = cb.bind(/*this*/ undefined, ...args);
+            return timeoutId;
+        }
+
+        unregister(id: any) {
+            if (typeof id === "number") {
+                delete this.map[id];
+            }
+        }
+
+        count() {
+            let n = 0;
+            for (const _ in this.map) {
+                n++;
+            }
+            return n;
+        }
+
+        invoke(invokeKey?: number) {
+            if (invokeKey) {
+                this.map[invokeKey]();
+                delete this.map[invokeKey];
+                return;
+            }
+
+            // Note: invoking a callback may result in new callbacks been queued,
+            // so do not clear the entire callback list regardless. Only remove the
+            // ones we have invoked.
+            for (const key in this.map) {
+                this.map[key]();
+                delete this.map[key];
+            }
+        }
+    }
+
+    type TimeOutCallback = () => any;
+
+    export interface TestFileWatcher {
+        cb: FileWatcherCallback;
+        fileName: string;
+    }
+
+    export interface TestDirectoryWatcher {
+        cb: DirectoryWatcherCallback;
+        directoryName: string;
+    }
+
+    export interface ReloadWatchInvokeOptions {
+        invokeDirectoryWatcherInsteadOfFileChanged: boolean;
+        ignoreWatchInvokedWithTriggerAsFileCreate: boolean;
+    }
+
+    export class TestServerHost implements server.ServerHost, FormatDiagnosticsHost, ModuleResolutionHost {
+        args: string[] = [];
+
+        private readonly output: string[] = [];
+
+        private fs: Map<FSEntry> = createMap<FSEntry>();
+        getCanonicalFileName: (s: string) => string;
+        private toPath: (f: string) => Path;
+        private timeoutCallbacks = new Callbacks();
+        private immediateCallbacks = new Callbacks();
+        private screenClears = 0;
+
+        readonly watchedDirectories = createMultiMap<TestDirectoryWatcher>();
+        readonly watchedDirectoriesRecursive = createMultiMap<TestDirectoryWatcher>();
+        readonly watchedFiles = createMultiMap<TestFileWatcher>();
+        private readonly executingFilePath: string;
+        private readonly currentDirectory: string;
+
+        constructor(public withSafeList: boolean, public useCaseSensitiveFileNames: boolean, executingFilePath: string, currentDirectory: string, fileOrFolderList: ReadonlyArray<FileOrFolder>, public readonly newLine = "\n", public readonly useWindowsStylePath?: boolean) {
+            this.getCanonicalFileName = createGetCanonicalFileName(useCaseSensitiveFileNames);
+            this.toPath = s => toPath(s, currentDirectory, this.getCanonicalFileName);
+            this.executingFilePath = this.getHostSpecificPath(executingFilePath);
+            this.currentDirectory = this.getHostSpecificPath(currentDirectory);
+            this.reloadFS(fileOrFolderList);
+        }
+
+        getNewLine() {
+            return this.newLine;
+        }
+
+        toNormalizedAbsolutePath(s: string) {
+            return getNormalizedAbsolutePath(s, this.currentDirectory);
+        }
+
+        toFullPath(s: string) {
+            return this.toPath(this.toNormalizedAbsolutePath(s));
+        }
+
+        getHostSpecificPath(s: string) {
+            if (this.useWindowsStylePath && s.startsWith(directorySeparator)) {
+                return "c:/" + s.substring(1);
+            }
+            return s;
+        }
+
+        reloadFS(fileOrFolderList: ReadonlyArray<FileOrFolder>, options?: Partial<ReloadWatchInvokeOptions>) {
+            const mapNewLeaves = createMap<true>();
+            const isNewFs = this.fs.size === 0;
+            fileOrFolderList = fileOrFolderList.concat(this.withSafeList ? safeList : []);
+            const filesOrFoldersToLoad: ReadonlyArray<FileOrFolder> = !this.useWindowsStylePath ? fileOrFolderList :
+                fileOrFolderList.map<FileOrFolder>(f => {
+                    const result = clone(f);
+                    result.path = this.getHostSpecificPath(f.path);
+                    return result;
+                });
+            for (const fileOrDirectory of filesOrFoldersToLoad) {
+                const path = this.toFullPath(fileOrDirectory.path);
+                mapNewLeaves.set(path, true);
+                // If its a change
+                const currentEntry = this.fs.get(path);
+                if (currentEntry) {
+                    if (isFile(currentEntry)) {
+                        if (isString(fileOrDirectory.content)) {
+                            // Update file
+                            if (currentEntry.content !== fileOrDirectory.content) {
+                                currentEntry.content = fileOrDirectory.content;
+                                if (options && options.invokeDirectoryWatcherInsteadOfFileChanged) {
+                                    this.invokeDirectoryWatcher(getDirectoryPath(currentEntry.fullPath), currentEntry.fullPath);
+                                }
+                                else {
+                                    this.invokeFileWatcher(currentEntry.fullPath, FileWatcherEventKind.Changed);
+                                }
+                            }
+                        }
+                        else {
+                            // TODO: Changing from file => folder/Symlink
+                        }
+                    }
+                    else if (isSymLink(currentEntry)) {
+                        // TODO: update symlinks
+                    }
+                    else {
+                        // Folder
+                        if (isString(fileOrDirectory.content)) {
+                            // TODO: Changing from folder => file
+                        }
+                        else {
+                            // Folder update: Nothing to do.
+                        }
+                    }
+                }
+                else {
+                    this.ensureFileOrFolder(fileOrDirectory, options && options.ignoreWatchInvokedWithTriggerAsFileCreate);
+                }
+            }
+
+            if (!isNewFs) {
+                this.fs.forEach((fileOrDirectory, path) => {
+                    // If this entry is not from the new file or folder
+                    if (!mapNewLeaves.get(path)) {
+                        // Leaf entries that arent in new list => remove these
+                        if (isFile(fileOrDirectory) || isSymLink(fileOrDirectory) || isFolder(fileOrDirectory) && fileOrDirectory.entries.length === 0) {
+                            this.removeFileOrFolder(fileOrDirectory, folder => !mapNewLeaves.get(folder.path));
+                        }
+                    }
+                });
+            }
+        }
+
+        renameFolder(folderName: string, newFolderName: string) {
+            const fullPath = getNormalizedAbsolutePath(folderName, this.currentDirectory);
+            const path = this.toPath(fullPath);
+            const folder = this.fs.get(path) as Folder;
+            Debug.assert(!!folder);
+
+            // Only remove the folder
+            this.removeFileOrFolder(folder, returnFalse, /*isRenaming*/ true);
+
+            // Add updated folder with new folder name
+            const newFullPath = getNormalizedAbsolutePath(newFolderName, this.currentDirectory);
+            const newFolder = this.toFolder(newFullPath);
+            const newPath = newFolder.path;
+            const basePath = getDirectoryPath(path);
+            Debug.assert(basePath !== path);
+            Debug.assert(basePath === getDirectoryPath(newPath));
+            const baseFolder = this.fs.get(basePath) as Folder;
+            this.addFileOrFolderInFolder(baseFolder, newFolder);
+
+            // Invoke watches for files in the folder as deleted (from old path)
+            for (const entry of folder.entries) {
+                Debug.assert(isFile(entry));
+                this.fs.delete(entry.path);
+                this.invokeFileWatcher(entry.fullPath, FileWatcherEventKind.Deleted);
+
+                entry.fullPath = combinePaths(newFullPath, getBaseFileName(entry.fullPath));
+                entry.path = this.toPath(entry.fullPath);
+                newFolder.entries.push(entry);
+                this.fs.set(entry.path, entry);
+                this.invokeFileWatcher(entry.fullPath, FileWatcherEventKind.Created);
+            }
+        }
+
+        ensureFileOrFolder(fileOrDirectory: FileOrFolder, ignoreWatchInvokedWithTriggerAsFileCreate?: boolean) {
+            if (isString(fileOrDirectory.content)) {
+                const file = this.toFile(fileOrDirectory);
+                Debug.assert(!this.fs.get(file.path));
+                const baseFolder = this.ensureFolder(getDirectoryPath(file.fullPath));
+                this.addFileOrFolderInFolder(baseFolder, file, ignoreWatchInvokedWithTriggerAsFileCreate);
+            }
+            else if (isString(fileOrDirectory.symLink)) {
+                const symLink = this.toSymLink(fileOrDirectory);
+                Debug.assert(!this.fs.get(symLink.path));
+                const baseFolder = this.ensureFolder(getDirectoryPath(symLink.fullPath));
+                this.addFileOrFolderInFolder(baseFolder, symLink, ignoreWatchInvokedWithTriggerAsFileCreate);
+            }
+            else {
+                const fullPath = getNormalizedAbsolutePath(fileOrDirectory.path, this.currentDirectory);
+                this.ensureFolder(fullPath);
+            }
+        }
+
+        private ensureFolder(fullPath: string): Folder {
+            const path = this.toPath(fullPath);
+            let folder = this.fs.get(path) as Folder;
+            if (!folder) {
+                folder = this.toFolder(fullPath);
+                const baseFullPath = getDirectoryPath(fullPath);
+                if (fullPath !== baseFullPath) {
+                    // Add folder in the base folder
+                    const baseFolder = this.ensureFolder(baseFullPath);
+                    this.addFileOrFolderInFolder(baseFolder, folder);
+                }
+                else {
+                    // root folder
+                    Debug.assert(this.fs.size === 0);
+                    this.fs.set(path, folder);
+                }
+            }
+            Debug.assert(isFolder(folder));
+            return folder;
+        }
+
+        private addFileOrFolderInFolder(folder: Folder, fileOrDirectory: File | Folder | SymLink, ignoreWatch?: boolean) {
+            folder.entries.push(fileOrDirectory);
+            this.fs.set(fileOrDirectory.path, fileOrDirectory);
+
+            if (ignoreWatch) {
+                return;
+            }
+            if (isFile(fileOrDirectory) || isSymLink(fileOrDirectory)) {
+                this.invokeFileWatcher(fileOrDirectory.fullPath, FileWatcherEventKind.Created);
+            }
+            this.invokeDirectoryWatcher(folder.fullPath, fileOrDirectory.fullPath);
+        }
+
+        private removeFileOrFolder(fileOrDirectory: File | Folder | SymLink, isRemovableLeafFolder: (folder: Folder) => boolean, isRenaming?: boolean) {
+            const basePath = getDirectoryPath(fileOrDirectory.path);
+            const baseFolder = this.fs.get(basePath) as Folder;
+            if (basePath !== fileOrDirectory.path) {
+                Debug.assert(!!baseFolder);
+                filterMutate(baseFolder.entries, entry => entry !== fileOrDirectory);
+            }
+            this.fs.delete(fileOrDirectory.path);
+
+            if (isFile(fileOrDirectory) || isSymLink(fileOrDirectory)) {
+                this.invokeFileWatcher(fileOrDirectory.fullPath, FileWatcherEventKind.Deleted);
+            }
+            else {
+                Debug.assert(fileOrDirectory.entries.length === 0 || isRenaming);
+                const relativePath = this.getRelativePathToDirectory(fileOrDirectory.fullPath, fileOrDirectory.fullPath);
+                // Invoke directory and recursive directory watcher for the folder
+                // Here we arent invoking recursive directory watchers for the base folders
+                // since that is something we would want to do for both file as well as folder we are deleting
+                invokeWatcherCallbacks(this.watchedDirectories.get(fileOrDirectory.path), cb => this.directoryCallback(cb, relativePath));
+                invokeWatcherCallbacks(this.watchedDirectoriesRecursive.get(fileOrDirectory.path), cb => this.directoryCallback(cb, relativePath));
+            }
+
+            if (basePath !== fileOrDirectory.path) {
+                if (baseFolder.entries.length === 0 && isRemovableLeafFolder(baseFolder)) {
+                    this.removeFileOrFolder(baseFolder, isRemovableLeafFolder);
+                }
+                else {
+                    this.invokeRecursiveDirectoryWatcher(baseFolder.fullPath, fileOrDirectory.fullPath);
+                }
+            }
+        }
+
+        private invokeFileWatcher(fileFullPath: string, eventKind: FileWatcherEventKind) {
+            const callbacks = this.watchedFiles.get(this.toPath(fileFullPath));
+            invokeWatcherCallbacks(callbacks, ({ cb }) => cb(fileFullPath, eventKind));
+        }
+
+        private getRelativePathToDirectory(directoryFullPath: string, fileFullPath: string) {
+            return getRelativePathToDirectoryOrUrl(directoryFullPath, fileFullPath, this.currentDirectory, this.getCanonicalFileName, /*isAbsolutePathAnUrl*/ false);
+        }
+
+        /**
+         * This will call the directory watcher for the folderFullPath and recursive directory watchers for this and base folders
+         */
+        private invokeDirectoryWatcher(folderFullPath: string, fileName: string) {
+            const relativePath = this.getRelativePathToDirectory(folderFullPath, fileName);
+            invokeWatcherCallbacks(this.watchedDirectories.get(this.toPath(folderFullPath)), cb => this.directoryCallback(cb, relativePath));
+            this.invokeRecursiveDirectoryWatcher(folderFullPath, fileName);
+        }
+
+        private directoryCallback({ cb, directoryName }: TestDirectoryWatcher, relativePath: string) {
+            cb(combinePaths(directoryName, relativePath));
+        }
+
+        /**
+         * This will call the recursive directory watcher for this directory as well as all the base directories
+         */
+        private invokeRecursiveDirectoryWatcher(fullPath: string, fileName: string) {
+            const relativePath = this.getRelativePathToDirectory(fullPath, fileName);
+            invokeWatcherCallbacks(this.watchedDirectoriesRecursive.get(this.toPath(fullPath)), cb => this.directoryCallback(cb, relativePath));
+            const basePath = getDirectoryPath(fullPath);
+            if (this.getCanonicalFileName(fullPath) !== this.getCanonicalFileName(basePath)) {
+                this.invokeRecursiveDirectoryWatcher(basePath, fileName);
+            }
+        }
+
+        private toFile(fileOrDirectory: FileOrFolder): File {
+            const fullPath = getNormalizedAbsolutePath(fileOrDirectory.path, this.currentDirectory);
+            return {
+                path: this.toPath(fullPath),
+                content: fileOrDirectory.content,
+                fullPath,
+                fileSize: fileOrDirectory.fileSize
+            };
+        }
+
+        private toSymLink(fileOrDirectory: FileOrFolder): SymLink {
+            const fullPath = getNormalizedAbsolutePath(fileOrDirectory.path, this.currentDirectory);
+            return {
+                path: this.toPath(fullPath),
+                fullPath,
+                symLink: getNormalizedAbsolutePath(fileOrDirectory.symLink, getDirectoryPath(fullPath))
+            };
+        }
+
+        private toFolder(path: string): Folder {
+            const fullPath = getNormalizedAbsolutePath(path, this.currentDirectory);
+            return {
+                path: this.toPath(fullPath),
+                entries: [],
+                fullPath
+            };
+        }
+
+        private getRealFsEntry<T extends FSEntry>(isFsEntry: (fsEntry: FSEntry) => fsEntry is T, path: Path, fsEntry = this.fs.get(path)): T | undefined {
+            if (isFsEntry(fsEntry)) {
+                return fsEntry;
+            }
+
+            if (isSymLink(fsEntry)) {
+                return this.getRealFsEntry(isFsEntry, this.toPath(fsEntry.symLink));
+            }
+
+            if (fsEntry) {
+                // This fs entry is something else
+                return undefined;
+            }
+
+            const realpath = this.realpath(path);
+            if (path !== realpath) {
+                return this.getRealFsEntry(isFsEntry, realpath as Path);
+            }
+
+            return undefined;
+        }
+
+        private isFile(fsEntry: FSEntry) {
+            return !!this.getRealFile(fsEntry.path, fsEntry);
+        }
+
+        private getRealFile(path: Path, fsEntry?: FSEntry): File | undefined {
+            return this.getRealFsEntry(isFile, path, fsEntry);
+        }
+
+        private isFolder(fsEntry: FSEntry) {
+            return !!this.getRealFolder(fsEntry.path, fsEntry);
+        }
+
+        private getRealFolder(path: Path, fsEntry = this.fs.get(path)): Folder | undefined {
+            return this.getRealFsEntry(isFolder, path, fsEntry);
+        }
+
+        fileExists(s: string) {
+            const path = this.toFullPath(s);
+            return !!this.getRealFile(path);
+        }
+
+        readFile(s: string): string {
+            const fsEntry = this.getRealFile(this.toFullPath(s));
+            return fsEntry ? fsEntry.content : undefined;
+        }
+
+        getFileSize(s: string) {
+            const path = this.toFullPath(s);
+            const entry = this.fs.get(path);
+            if (isFile(entry)) {
+                return entry.fileSize ? entry.fileSize : entry.content.length;
+            }
+            return undefined;
+        }
+
+        directoryExists(s: string) {
+            const path = this.toFullPath(s);
+            return !!this.getRealFolder(path);
+        }
+
+        getDirectories(s: string): string[] {
+            const path = this.toFullPath(s);
+            const folder = this.getRealFolder(path);
+            if (folder) {
+                return mapDefined(folder.entries, entry => this.isFolder(entry) ? getBaseFileName(entry.fullPath) : undefined);
+            }
+            Debug.fail(folder ? "getDirectories called on file" : "getDirectories called on missing folder");
+            return [];
+        }
+
+        readDirectory(path: string, extensions?: ReadonlyArray<string>, exclude?: ReadonlyArray<string>, include?: ReadonlyArray<string>, depth?: number): string[] {
+            return ts.matchFiles(path, extensions, exclude, include, this.useCaseSensitiveFileNames, this.getCurrentDirectory(), depth, (dir) => {
+                const directories: string[] = [];
+                const files: string[] = [];
+                const folder = this.getRealFolder(this.toPath(dir));
+                if (folder) {
+                    folder.entries.forEach((entry) => {
+                        if (this.isFolder(entry)) {
+                            directories.push(getBaseFileName(entry.fullPath));
+                        }
+                        else if (this.isFile(entry)) {
+                            files.push(getBaseFileName(entry.fullPath));
+                        }
+                        else {
+                            Debug.fail("Unknown entry");
+                        }
+                    });
+                }
+                return { directories, files };
+            });
+        }
+
+        watchDirectory(directoryName: string, cb: DirectoryWatcherCallback, recursive: boolean): FileWatcher {
+            const path = this.toFullPath(directoryName);
+            const map = recursive ? this.watchedDirectoriesRecursive : this.watchedDirectories;
+            const callback: TestDirectoryWatcher = {
+                cb,
+                directoryName
+            };
+            map.add(path, callback);
+            return {
+                close: () => map.remove(path, callback)
+            };
+        }
+
+        createHash(s: string): string {
+            return Harness.mockHash(s);
+        }
+
+        watchFile(fileName: string, cb: FileWatcherCallback) {
+            const path = this.toFullPath(fileName);
+            const callback: TestFileWatcher = { fileName, cb };
+            this.watchedFiles.add(path, callback);
+            return { close: () => this.watchedFiles.remove(path, callback) };
+        }
+
+        // TOOD: record and invoke callbacks to simulate timer events
+        setTimeout(callback: TimeOutCallback, _time: number, ...args: any[]) {
+            return this.timeoutCallbacks.register(callback, args);
+        }
+
+        getNextTimeoutId() {
+            return this.timeoutCallbacks.getNextId();
+        }
+
+        clearTimeout(timeoutId: any): void {
+            this.timeoutCallbacks.unregister(timeoutId);
+        }
+
+        clearScreen(): void {
+            this.screenClears += 1;
+        }
+
+        checkTimeoutQueueLengthAndRun(expected: number) {
+            this.checkTimeoutQueueLength(expected);
+            this.runQueuedTimeoutCallbacks();
+        }
+
+        checkTimeoutQueueLength(expected: number) {
+            const callbacksCount = this.timeoutCallbacks.count();
+            assert.equal(callbacksCount, expected, `expected ${expected} timeout callbacks queued but found ${callbacksCount}.`);
+        }
+
+        runQueuedTimeoutCallbacks(timeoutId?: number) {
+            try {
+                this.timeoutCallbacks.invoke(timeoutId);
+            }
+            catch (e) {
+                if (e.message === this.existMessage) {
+                    return;
+                }
+                throw e;
+            }
+        }
+
+        runQueuedImmediateCallbacks() {
+            this.immediateCallbacks.invoke();
+        }
+
+        setImmediate(callback: TimeOutCallback, _time: number, ...args: any[]) {
+            return this.immediateCallbacks.register(callback, args);
+        }
+
+        clearImmediate(timeoutId: any): void {
+            this.immediateCallbacks.unregister(timeoutId);
+        }
+
+        checkScreenClears(expected: number): void {
+            assert.equal(this.screenClears, expected);
+        }
+
+        createDirectory(directoryName: string): void {
+            const folder = this.toFolder(directoryName);
+
+            // base folder has to be present
+            const base = getDirectoryPath(folder.path);
+            const baseFolder = this.fs.get(base) as Folder;
+            Debug.assert(isFolder(baseFolder));
+
+            Debug.assert(!this.fs.get(folder.path));
+            this.addFileOrFolderInFolder(baseFolder, folder);
+        }
+
+        writeFile(path: string, content: string): void {
+            const file = this.toFile({ path, content });
+
+            // base folder has to be present
+            const base = getDirectoryPath(file.path);
+            const folder = this.fs.get(base) as Folder;
+            Debug.assert(isFolder(folder));
+
+            this.addFileOrFolderInFolder(folder, file);
+        }
+
+        write(message: string) {
+            this.output.push(message);
+        }
+
+        getOutput(): ReadonlyArray<string> {
+            return this.output;
+        }
+
+        clearOutput() {
+            clear(this.output);
+        }
+
+        realpath(s: string): string {
+            const fullPath = this.toNormalizedAbsolutePath(s);
+            const path = this.toPath(fullPath);
+            if (getDirectoryPath(path) === path) {
+                // Root
+                return s;
+            }
+            const dirFullPath = this.realpath(getDirectoryPath(fullPath));
+            const realFullPath = combinePaths(dirFullPath, getBaseFileName(fullPath));
+            const fsEntry = this.fs.get(this.toPath(realFullPath));
+            if (isSymLink(fsEntry)) {
+                return this.realpath(fsEntry.symLink);
+            }
+
+            return realFullPath;
+        }
+
+        readonly existMessage = "System Exit";
+        exitCode: number;
+        readonly resolvePath = (s: string) => s;
+        readonly getExecutingFilePath = () => this.executingFilePath;
+        readonly getCurrentDirectory = () => this.currentDirectory;
+        exit(exitCode?: number) {
+            this.exitCode = exitCode;
+            throw new Error(this.existMessage);
+        }
+        readonly getEnvironmentVariable = notImplemented;
+    }
+}