diff --git a/src/compiler/builder.ts b/src/compiler/builder.ts
index 92e651061ed..6dd3226e550 100644
--- a/src/compiler/builder.ts
+++ b/src/compiler/builder.ts
@@ -249,7 +249,7 @@ namespace ts {
     export function createBuilderProgram(kind: BuilderProgramKind, { newProgram, host, oldProgram, configFileParsingDiagnostics }: BuilderCreationParameters) {
         // Return same program if underlying program doesnt change
         let oldState = oldProgram && oldProgram.getState();
-        if (oldState && newProgram === oldState.program && configFileParsingDiagnostics !== newProgram.getConfigFileParsingDiagnostics()) {
+        if (oldState && newProgram === oldState.program && configFileParsingDiagnostics === newProgram.getConfigFileParsingDiagnostics()) {
             newProgram = undefined;
             oldState = undefined;
             return oldProgram;
diff --git a/src/compiler/tsc.ts b/src/compiler/tsc.ts
index 3c73eba86ef..e45a95f7989 100644
--- a/src/compiler/tsc.ts
+++ b/src/compiler/tsc.ts
@@ -154,9 +154,12 @@ namespace ts {
 
     function updateWatchCompilationHost(watchCompilerHost: WatchCompilerHost<EmitAndSemanticDiagnosticsBuilderProgram>) {
         const compileUsingBuilder = watchCompilerHost.createProgram;
-        watchCompilerHost.createProgram = (rootNames, options, host, oldProgram) => {
-            enableStatistics(options);
-            return compileUsingBuilder(rootNames, options, host, oldProgram);
+        watchCompilerHost.createProgram = (rootNames, options, host, oldProgram, configFileParsingDiagnostics) => {
+            Debug.assert(rootNames !== undefined || (options === undefined && !!oldProgram));
+            if (options !== undefined) {
+                enableStatistics(options);
+            }
+            return compileUsingBuilder(rootNames, options, host, oldProgram, configFileParsingDiagnostics);
         };
         const emitFilesUsingBuilder = watchCompilerHost.afterProgramCreate;
         watchCompilerHost.afterProgramCreate = builderProgram => {
diff --git a/src/compiler/watch.ts b/src/compiler/watch.ts
index f0bb151b814..9ec362a12c0 100644
--- a/src/compiler/watch.ts
+++ b/src/compiler/watch.ts
@@ -625,9 +625,19 @@ namespace ts {
                     builderProgram = createProgram(/*rootNames*/ undefined, /*options*/ undefined, compilerHost, builderProgram, configFileParsingDiagnostics);
                     hasChangedConfigFileParsingErrors = false;
                 }
-                return builderProgram;
+            }
+            else {
+                createNewProgram(program, hasInvalidatedResolution);
             }
 
+            if (host.afterProgramCreate) {
+                host.afterProgramCreate(builderProgram);
+            }
+
+            return builderProgram;
+        }
+
+        function createNewProgram(program: Program, hasInvalidatedResolution: HasInvalidatedResolution) {
             // Compile the program
             if (watchLogLevel !== WatchLogLevel.None) {
                 writeLog("CreatingProgramWith::");
@@ -663,12 +673,6 @@ namespace ts {
                 }
                 missingFilePathsRequestedForRelease = undefined;
             }
-
-            if (host.afterProgramCreate) {
-                host.afterProgramCreate(builderProgram);
-            }
-
-            return builderProgram;
         }
 
         function updateRootFileNames(files: string[]) {
diff --git a/src/harness/unittests/tscWatchMode.ts b/src/harness/unittests/tscWatchMode.ts
index 44565c0ddbe..ca681a8f8ce 100644
--- a/src/harness/unittests/tscWatchMode.ts
+++ b/src/harness/unittests/tscWatchMode.ts
@@ -418,6 +418,28 @@ namespace ts.tscWatch {
             checkProgramRootFiles(watch(), [commonFile1.path]);
         });
 
+        it("works correctly when config file is changed but its content havent", () => {
+            const configFile: FileOrFolder = {
+                path: "/a/b/tsconfig.json",
+                content: `{
+                    "compilerOptions": {},
+                    "files": ["${commonFile1.path}", "${commonFile2.path}"]
+                }`
+            };
+            const files = [libFile, commonFile1, commonFile2, configFile];
+            const host = createWatchedSystem(files);
+            const watch = createWatchOfConfigFile(configFile.path, host);
+
+            checkProgramActualFiles(watch(), [libFile.path, commonFile1.path, commonFile2.path]);
+            checkOutputErrorsInitial(host, emptyArray);
+
+            host.modifyFile(configFile.path, configFile.content);
+            host.checkTimeoutQueueLengthAndRun(1); // reload the configured project
+
+            checkProgramActualFiles(watch(), [libFile.path, commonFile1.path, commonFile2.path]);
+            checkOutputErrorsIncremental(host, emptyArray);
+        });
+
         it("files explicitly excluded in config file", () => {
             const configFile: FileOrFolder = {
                 path: "/a/b/tsconfig.json",
diff --git a/src/harness/virtualFileSystemWithWatch.ts b/src/harness/virtualFileSystemWithWatch.ts
index 3756f435d43..323a51c25ae 100644
--- a/src/harness/virtualFileSystemWithWatch.ts
+++ b/src/harness/virtualFileSystemWithWatch.ts
@@ -393,21 +393,7 @@ interface Array<T> {}`
                         if (isString(fileOrDirectory.content)) {
                             // Update file
                             if (currentEntry.content !== fileOrDirectory.content) {
-                                if (options && options.invokeFileDeleteCreateAsPartInsteadOfChange) {
-                                    this.removeFileOrFolder(currentEntry, returnFalse);
-                                    this.ensureFileOrFolder(fileOrDirectory);
-                                }
-                                else {
-                                    currentEntry.content = fileOrDirectory.content;
-                                    currentEntry.modifiedTime = this.now();
-                                    this.fs.get(getDirectoryPath(currentEntry.path)).modifiedTime = this.now();
-                                    if (options && options.invokeDirectoryWatcherInsteadOfFileChanged) {
-                                        this.invokeDirectoryWatcher(getDirectoryPath(currentEntry.fullPath), currentEntry.fullPath);
-                                    }
-                                    else {
-                                        this.invokeFileWatcher(currentEntry.fullPath, FileWatcherEventKind.Changed);
-                                    }
-                                }
+                                this.modifyFile(fileOrDirectory.path, fileOrDirectory.content, options);
                             }
                         }
                         else {
@@ -446,6 +432,30 @@ interface Array<T> {}`
             }
         }
 
+        modifyFile(filePath: string, content: string, options?: Partial<ReloadWatchInvokeOptions>) {
+            const path = this.toFullPath(filePath);
+            const currentEntry = this.fs.get(path);
+            if (!currentEntry || !isFile(currentEntry)) {
+                throw new Error(`file not present: ${filePath}`);
+            }
+
+            if (options && options.invokeFileDeleteCreateAsPartInsteadOfChange) {
+                this.removeFileOrFolder(currentEntry, returnFalse);
+                this.ensureFileOrFolder({ path: filePath, content });
+            }
+            else {
+                currentEntry.content = content;
+                currentEntry.modifiedTime = this.now();
+                this.fs.get(getDirectoryPath(currentEntry.path)).modifiedTime = this.now();
+                if (options && options.invokeDirectoryWatcherInsteadOfFileChanged) {
+                    this.invokeDirectoryWatcher(getDirectoryPath(currentEntry.fullPath), currentEntry.fullPath);
+                }
+                else {
+                    this.invokeFileWatcher(currentEntry.fullPath, FileWatcherEventKind.Changed);
+                }
+            }
+        }
+
         renameFolder(folderName: string, newFolderName: string) {
             const fullPath = getNormalizedAbsolutePath(folderName, this.currentDirectory);
             const path = this.toPath(fullPath);