diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index 1ef5d6bfba1..bf5b7cb5727 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -2076,7 +2076,10 @@ namespace ts {
             }
 
             // Cannot specify module gen that isn't amd or system with --out
-            if (outFile && options.module && !(options.module === ModuleKind.AMD || options.module === ModuleKind.System)) {
+            // Report this error if user specified --module moduleKind 
+            // or if there is external module in compilation which defaults to commonjs
+            const emitModuleKind = getEmitModuleKind(options);
+            if (outFile && (options.module || firstExternalModuleSourceFile) && !(emitModuleKind === ModuleKind.AMD || emitModuleKind === ModuleKind.System)) {
                 programDiagnostics.add(createCompilerDiagnostic(Diagnostics.Only_amd_and_system_modules_are_supported_alongside_0, options.out ? "out" : "outFile"));
             }
 
diff --git a/tests/baselines/reference/isolatedModulesOut.errors.txt b/tests/baselines/reference/isolatedModulesOut.errors.txt
index 7d16ac94666..7df16139bfe 100644
--- a/tests/baselines/reference/isolatedModulesOut.errors.txt
+++ b/tests/baselines/reference/isolatedModulesOut.errors.txt
@@ -1,8 +1,10 @@
 error TS5053: Option 'out' cannot be specified with option 'isolatedModules'.
+error TS6082: Only 'amd' and 'system' modules are supported alongside --out.
 tests/cases/compiler/file2.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
 
 
 !!! error TS5053: Option 'out' cannot be specified with option 'isolatedModules'.
+!!! error TS6082: Only 'amd' and 'system' modules are supported alongside --out.
 ==== tests/cases/compiler/file1.ts (0 errors) ====
     
     export var x;
diff --git a/tests/baselines/reference/optionsOutAndNoModuleGen.errors.txt b/tests/baselines/reference/optionsOutAndNoModuleGen.errors.txt
new file mode 100644
index 00000000000..b4d00619993
--- /dev/null
+++ b/tests/baselines/reference/optionsOutAndNoModuleGen.errors.txt
@@ -0,0 +1,7 @@
+error TS6082: Only 'amd' and 'system' modules are supported alongside --out.
+
+
+!!! error TS6082: Only 'amd' and 'system' modules are supported alongside --out.
+==== tests/cases/compiler/optionsOutAndNoModuleGen.ts (0 errors) ====
+    
+    export var x = 10;
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives11.js b/tests/baselines/reference/typeReferenceDirectives11.js
index cb41c843adc..b75ce8b4762 100644
--- a/tests/baselines/reference/typeReferenceDirectives11.js
+++ b/tests/baselines/reference/typeReferenceDirectives11.js
@@ -15,6 +15,15 @@ import {foo} from "./mod1";
 export const bar = foo();
 
 //// [output.js]
+define("mod1", ["require", "exports"], function (require, exports) {
+    "use strict";
+    function foo() { return { x: 1 }; }
+    exports.foo = foo;
+});
+define("mod2", ["require", "exports", "mod1"], function (require, exports, mod1_1) {
+    "use strict";
+    exports.bar = mod1_1.foo();
+});
 
 
 //// [output.d.ts]
diff --git a/tests/baselines/reference/typeReferenceDirectives11.trace.json b/tests/baselines/reference/typeReferenceDirectives11.trace.json
index be060569d83..c21e8989f4a 100644
--- a/tests/baselines/reference/typeReferenceDirectives11.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives11.trace.json
@@ -5,8 +5,7 @@
     "File '/types/lib/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'lib' was successfully resolved to '/types/lib/index.d.ts', primary: true. ========",
     "======== Resolving module './mod1' from '/mod2.ts'. ========",
-    "Module resolution kind is not specified, using 'NodeJs'.",
-    "Loading module as file / folder, candidate module location '/mod1'.",
+    "Module resolution kind is not specified, using 'Classic'.",
     "File '/mod1.ts' exist - use it as a name resolution result.",
     "======== Module name './mod1' was successfully resolved to '/mod1.ts'. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives12.js b/tests/baselines/reference/typeReferenceDirectives12.js
index c9c4a912da1..8d64e1dba9b 100644
--- a/tests/baselines/reference/typeReferenceDirectives12.js
+++ b/tests/baselines/reference/typeReferenceDirectives12.js
@@ -34,7 +34,26 @@ export const foo = new Cls().foo();
 export const bar = Cls.bar();
 
 //// [output.js]
+define("main", ["require", "exports"], function (require, exports) {
+    "use strict";
+    var Cls = (function () {
+        function Cls() {
+        }
+        return Cls;
+    }());
+    exports.Cls = Cls;
+});
 /// <reference types="lib" />
+define("mod1", ["require", "exports", "main"], function (require, exports, main_1) {
+    "use strict";
+    main_1.Cls.prototype.foo = function () { return undefined; };
+});
+define("mod2", ["require", "exports", "main", "mod1"], function (require, exports, main_2) {
+    "use strict";
+    exports.cls = main_2.Cls;
+    exports.foo = new main_2.Cls().foo();
+    exports.bar = main_2.Cls.bar();
+});
 
 
 //// [output.d.ts]
diff --git a/tests/baselines/reference/typeReferenceDirectives12.trace.json b/tests/baselines/reference/typeReferenceDirectives12.trace.json
index f4fc0937325..ff27d63ef50 100644
--- a/tests/baselines/reference/typeReferenceDirectives12.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives12.trace.json
@@ -1,12 +1,10 @@
 [
     "======== Resolving module './main' from '/mod2.ts'. ========",
-    "Module resolution kind is not specified, using 'NodeJs'.",
-    "Loading module as file / folder, candidate module location '/main'.",
+    "Module resolution kind is not specified, using 'Classic'.",
     "File '/main.ts' exist - use it as a name resolution result.",
     "======== Module name './main' was successfully resolved to '/main.ts'. ========",
     "======== Resolving module './mod1' from '/mod2.ts'. ========",
-    "Module resolution kind is not specified, using 'NodeJs'.",
-    "Loading module as file / folder, candidate module location '/mod1'.",
+    "Module resolution kind is not specified, using 'Classic'.",
     "File '/mod1.ts' exist - use it as a name resolution result.",
     "======== Module name './mod1' was successfully resolved to '/mod1.ts'. ========",
     "======== Resolving type reference directive 'lib', containing file '/mod1.ts', root directory '/'. ========",
@@ -15,8 +13,7 @@
     "File '/types/lib/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'lib' was successfully resolved to '/types/lib/index.d.ts', primary: true. ========",
     "======== Resolving module './main' from '/mod1.ts'. ========",
-    "Module resolution kind is not specified, using 'NodeJs'.",
-    "Loading module as file / folder, candidate module location '/main'.",
+    "Module resolution kind is not specified, using 'Classic'.",
     "File '/main.ts' exist - use it as a name resolution result.",
     "======== Module name './main' was successfully resolved to '/main.ts'. ========"
 ]
\ No newline at end of file
diff --git a/tests/cases/compiler/optionsOutAndNoModuleGen.ts b/tests/cases/compiler/optionsOutAndNoModuleGen.ts
new file mode 100644
index 00000000000..b0a7cf22d21
--- /dev/null
+++ b/tests/cases/compiler/optionsOutAndNoModuleGen.ts
@@ -0,0 +1,3 @@
+// @out: output.js
+
+export var x = 10;
\ No newline at end of file
diff --git a/tests/cases/compiler/typeReferenceDirectives11.ts b/tests/cases/compiler/typeReferenceDirectives11.ts
index c955a5daffc..d199277ac62 100644
--- a/tests/cases/compiler/typeReferenceDirectives11.ts
+++ b/tests/cases/compiler/typeReferenceDirectives11.ts
@@ -4,6 +4,7 @@
 // @traceResolution: true
 // @types: lib
 // @out: output.js
+// @module: amd
 
 // @filename: /types/lib/index.d.ts
 
diff --git a/tests/cases/compiler/typeReferenceDirectives12.ts b/tests/cases/compiler/typeReferenceDirectives12.ts
index ef3c8d9755f..df449dc0ef9 100644
--- a/tests/cases/compiler/typeReferenceDirectives12.ts
+++ b/tests/cases/compiler/typeReferenceDirectives12.ts
@@ -3,6 +3,7 @@
 // @typesRoot: /
 // @traceResolution: true
 // @out: output.js
+// @module: amd
 
 // @filename: /types/lib/index.d.ts