diff --git a/src/compiler/emitter.ts b/src/compiler/emitter.ts
index cca3a8d6713..c77324eefd4 100644
--- a/src/compiler/emitter.ts
+++ b/src/compiler/emitter.ts
@@ -5429,17 +5429,43 @@ var __awaiter = (this && this.__awaiter) || function (thisArg, _arguments, Promi
                     (!isExternalModule(currentSourceFile) && resolver.isTopLevelValueImportEqualsWithEntityName(node))) {
                     emitLeadingComments(node);
                     emitStart(node);
-                    if (isES6ExportedDeclaration(node)) {
-                        write("export ");
-                        write("var ");
+                    
+                    // variable declaration for import-equals declaration can be hoisted in system modules
+                    // in this case 'var' should be omitted and emit should contain only initialization
+                    let variableDeclarationIsHoisted = shouldHoistVariable(node, /*checkIfSourceFileLevelDecl*/ true);
+                    
+                    // is it top level export import v = a.b.c in system module?
+                    // if yes - it needs to be rewritten as exporter('v', v = a.b.c)
+                    let isExported = isSourceFileLevelDeclarationInSystemJsModule(node, /*isExported*/ true);
+                    
+                    if (!variableDeclarationIsHoisted) {
+                        Debug.assert(!isExported);
+                                                
+                        if (isES6ExportedDeclaration(node)) {
+                            write("export ");
+                            write("var ");
+                        }
+                        else if (!(node.flags & NodeFlags.Export)) {
+                            write("var ");
+                        }
                     }
-                    else if (!(node.flags & NodeFlags.Export)) {
-                        write("var ");
+                                       
+                    
+                    if (isExported) {
+                        write(`${exportFunctionForFile}("`);
+                        emitNodeWithoutSourceMap(node.name);
+                        write(`", `);
                     }
+
                     emitModuleMemberName(node);
                     write(" = ");
                     emit(node.moduleReference);
-                    write(";");
+
+                    if (isExported) {
+                        write(")");
+                    }
+                                        
+                    write(";");                    
                     emitEnd(node);
                     emitExportImportAssignments(node);
                     emitTrailingComments(node);
@@ -5965,6 +5991,15 @@ var __awaiter = (this && this.__awaiter) || function (thisArg, _arguments, Promi
                         }
                         return;
                     }
+                    
+                    if (isInternalModuleImportEqualsDeclaration(node)) {
+                        if (!hoistedVars) {
+                            hoistedVars = [];
+                        }
+                        
+                        hoistedVars.push(node.name);
+                        return;
+                    }
 
                     if (isBindingPattern(node)) {
                         forEach((<BindingPattern>node).elements, visit);
@@ -6169,14 +6204,17 @@ var __awaiter = (this && this.__awaiter) || function (thisArg, _arguments, Promi
                 writeLine();
                 for (let i = startIndex; i < node.statements.length; ++i) {
                     let statement = node.statements[i];
-                    // - imports/exports are not emitted for system modules
+                    // - external module related imports/exports are not emitted for system modules
                     // - function declarations are not emitted because they were already hoisted
                     switch (statement.kind) {
                         case SyntaxKind.ExportDeclaration:
                         case SyntaxKind.ImportDeclaration:
-                        case SyntaxKind.ImportEqualsDeclaration:
                         case SyntaxKind.FunctionDeclaration:
                             continue;
+                        case SyntaxKind.ImportEqualsDeclaration:
+                            if (!isInternalModuleImportEqualsDeclaration(statement)) {
+                                continue;
+                            }
                     }
                     writeLine();
                     emit(statement);
diff --git a/src/compiler/utilities.ts b/src/compiler/utilities.ts
index 9d7877ca6e3..56eb2415cf9 100644
--- a/src/compiler/utilities.ts
+++ b/src/compiler/utilities.ts
@@ -965,7 +965,7 @@ namespace ts {
         return (<ExternalModuleReference>(<ImportEqualsDeclaration>node).moduleReference).expression;
     }
 
-    export function isInternalModuleImportEqualsDeclaration(node: Node) {
+    export function isInternalModuleImportEqualsDeclaration(node: Node): node is ImportEqualsDeclaration {
         return node.kind === SyntaxKind.ImportEqualsDeclaration && (<ImportEqualsDeclaration>node).moduleReference.kind !== SyntaxKind.ExternalModuleReference;
     }
 
diff --git a/tests/baselines/reference/aliasesInSystemModule1.errors.txt b/tests/baselines/reference/aliasesInSystemModule1.errors.txt
new file mode 100644
index 00000000000..9b89332e458
--- /dev/null
+++ b/tests/baselines/reference/aliasesInSystemModule1.errors.txt
@@ -0,0 +1,22 @@
+tests/cases/compiler/aliasesInSystemModule1.ts(2,24): error TS2307: Cannot find module 'foo'.
+
+
+==== tests/cases/compiler/aliasesInSystemModule1.ts (1 errors) ====
+    
+    import alias = require('foo');
+                           ~~~~~
+!!! error TS2307: Cannot find module 'foo'.
+    import cls = alias.Class;
+    export import cls2 = alias.Class;
+    
+    let x = new alias.Class();
+    let y = new cls();
+    let z = new cls2();
+    
+    module M {
+      export import cls = alias.Class;
+      let x = new alias.Class();
+      let y = new cls(); 
+      let z = new cls2();
+    }
+      
\ No newline at end of file
diff --git a/tests/baselines/reference/aliasesInSystemModule1.js b/tests/baselines/reference/aliasesInSystemModule1.js
new file mode 100644
index 00000000000..28ac1e9b4ad
--- /dev/null
+++ b/tests/baselines/reference/aliasesInSystemModule1.js
@@ -0,0 +1,42 @@
+//// [aliasesInSystemModule1.ts]
+
+import alias = require('foo');
+import cls = alias.Class;
+export import cls2 = alias.Class;
+
+let x = new alias.Class();
+let y = new cls();
+let z = new cls2();
+
+module M {
+  export import cls = alias.Class;
+  let x = new alias.Class();
+  let y = new cls(); 
+  let z = new cls2();
+}
+  
+
+//// [aliasesInSystemModule1.js]
+System.register(['foo'], function(exports_1) {
+    var alias;
+    var cls, cls2, x, y, z, M;
+    return {
+        setters:[
+            function (_alias) {
+                alias = _alias;
+            }],
+        execute: function() {
+            cls = alias.Class;
+            exports_1("cls2", cls2 = alias.Class);
+            x = new alias.Class();
+            y = new cls();
+            z = new cls2();
+            (function (M) {
+                M.cls = alias.Class;
+                var x = new alias.Class();
+                var y = new M.cls();
+                var z = new cls2();
+            })(M || (M = {}));
+        }
+    }
+});
diff --git a/tests/baselines/reference/aliasesInSystemModule2.errors.txt b/tests/baselines/reference/aliasesInSystemModule2.errors.txt
new file mode 100644
index 00000000000..618e61c7f3c
--- /dev/null
+++ b/tests/baselines/reference/aliasesInSystemModule2.errors.txt
@@ -0,0 +1,21 @@
+tests/cases/compiler/aliasesInSystemModule2.ts(2,21): error TS2307: Cannot find module 'foo'.
+
+
+==== tests/cases/compiler/aliasesInSystemModule2.ts (1 errors) ====
+    
+    import {alias} from "foo";
+                        ~~~~~
+!!! error TS2307: Cannot find module 'foo'.
+    import cls = alias.Class;
+    export import cls2 = alias.Class;
+    
+    let x = new alias.Class();
+    let y = new cls();
+    let z = new cls2();
+    
+    module M {
+      export import cls = alias.Class;
+      let x = new alias.Class();
+      let y = new cls(); 
+      let z = new cls2();
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/aliasesInSystemModule2.js b/tests/baselines/reference/aliasesInSystemModule2.js
new file mode 100644
index 00000000000..0256d03a179
--- /dev/null
+++ b/tests/baselines/reference/aliasesInSystemModule2.js
@@ -0,0 +1,41 @@
+//// [aliasesInSystemModule2.ts]
+
+import {alias} from "foo";
+import cls = alias.Class;
+export import cls2 = alias.Class;
+
+let x = new alias.Class();
+let y = new cls();
+let z = new cls2();
+
+module M {
+  export import cls = alias.Class;
+  let x = new alias.Class();
+  let y = new cls(); 
+  let z = new cls2();
+}
+
+//// [aliasesInSystemModule2.js]
+System.register(["foo"], function(exports_1) {
+    var foo_1;
+    var cls, cls2, x, y, z, M;
+    return {
+        setters:[
+            function (_foo_1) {
+                foo_1 = _foo_1;
+            }],
+        execute: function() {
+            cls = foo_1.alias.Class;
+            exports_1("cls2", cls2 = foo_1.alias.Class);
+            x = new foo_1.alias.Class();
+            y = new cls();
+            z = new cls2();
+            (function (M) {
+                M.cls = foo_1.alias.Class;
+                var x = new foo_1.alias.Class();
+                var y = new M.cls();
+                var z = new cls2();
+            })(M || (M = {}));
+        }
+    }
+});
diff --git a/tests/cases/compiler/aliasesInSystemModule1.ts b/tests/cases/compiler/aliasesInSystemModule1.ts
new file mode 100644
index 00000000000..33d205e5a07
--- /dev/null
+++ b/tests/cases/compiler/aliasesInSystemModule1.ts
@@ -0,0 +1,18 @@
+// @module: system
+// @isolatedModules: true
+
+import alias = require('foo');
+import cls = alias.Class;
+export import cls2 = alias.Class;
+
+let x = new alias.Class();
+let y = new cls();
+let z = new cls2();
+
+module M {
+  export import cls = alias.Class;
+  let x = new alias.Class();
+  let y = new cls(); 
+  let z = new cls2();
+}
+  
\ No newline at end of file
diff --git a/tests/cases/compiler/aliasesInSystemModule2.ts b/tests/cases/compiler/aliasesInSystemModule2.ts
new file mode 100644
index 00000000000..3daa7e5a7bd
--- /dev/null
+++ b/tests/cases/compiler/aliasesInSystemModule2.ts
@@ -0,0 +1,17 @@
+// @module: system
+// @isolatedModules: true
+
+import {alias} from "foo";
+import cls = alias.Class;
+export import cls2 = alias.Class;
+
+let x = new alias.Class();
+let y = new cls();
+let z = new cls2();
+
+module M {
+  export import cls = alias.Class;
+  let x = new alias.Class();
+  let y = new cls(); 
+  let z = new cls2();
+}
\ No newline at end of file