diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index fac4ba6732f..4bc314d6409 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -1271,4 +1271,4 @@
         "category": "Error",
         "code": -9999999
     }
-}
\ No newline at end of file
+}
diff --git a/src/compiler/parser.ts b/src/compiler/parser.ts
index 25038d71d4a..e248da99075 100644
--- a/src/compiler/parser.ts
+++ b/src/compiler/parser.ts
@@ -2665,6 +2665,10 @@ module ts {
                 case SyntaxKind.ThrowKeyword:
                 case SyntaxKind.TryKeyword:
                 case SyntaxKind.DebuggerKeyword:
+                // 'catch' and 'finally' do not actually indicate that the code is part of a statement,
+                // however, we say they are here so that we may gracefully parse them and error later.
+                case SyntaxKind.CatchKeyword:
+                case SyntaxKind.FinallyKeyword:
                     return true;
                 case SyntaxKind.InterfaceKeyword:
                 case SyntaxKind.ClassKeyword:
@@ -2672,13 +2676,17 @@ module ts {
                 case SyntaxKind.EnumKeyword:
                     // When followed by an identifier, these do not start a statement but might
                     // instead be following declarations
-                    if (isDeclaration()) return false;
+                    if (isDeclaration()) {
+                        return false;
+                    }
                 case SyntaxKind.PublicKeyword:
                 case SyntaxKind.PrivateKeyword:
                 case SyntaxKind.StaticKeyword:
                     // When followed by an identifier or keyword, these do not start a statement but
                     // might instead be following type members
-                    if (lookAhead(() => nextToken() >= SyntaxKind.Identifier)) return false;
+                    if (lookAhead(() => nextToken() >= SyntaxKind.Identifier)) {
+                        return false;
+                    }
                 default:
                     return isExpression();
             }
@@ -2715,6 +2723,9 @@ module ts {
                 case SyntaxKind.ThrowKeyword:
                     return parseThrowStatement();
                 case SyntaxKind.TryKeyword:
+                // Include the next two for error recovery.
+                case SyntaxKind.CatchKeyword:
+                case SyntaxKind.FinallyKeyword:
                     return parseTryStatement();
                 case SyntaxKind.DebuggerKeyword:
                     return parseDebuggerStatement();
diff --git a/tests/baselines/reference/invalidTryStatements2.errors.txt b/tests/baselines/reference/invalidTryStatements2.errors.txt
index fcb8ad3560d..a600210a605 100644
--- a/tests/baselines/reference/invalidTryStatements2.errors.txt
+++ b/tests/baselines/reference/invalidTryStatements2.errors.txt
@@ -1,4 +1,4 @@
-==== tests/cases/conformance/statements/tryStatements/invalidTryStatements2.ts (4 errors) ====
+==== tests/cases/conformance/statements/tryStatements/invalidTryStatements2.ts (6 errors) ====
     function fn() {
         try {
         } catch { // syntax error, missing '(x)'
@@ -8,11 +8,34 @@
     
         catch(x) { } // error missing try
         ~~~~~
-!!! Statement expected.
-                 ~
-!!! '=>' expected.
+!!! 'try' expected.
     
-        finally{ } // error missing try
+        finally{ } // potential error; can be absorbed by the 'catch'
+    }
+    
+    function fn2() {
+        finally { } // error missing try
         ~~~~~~~
-!!! Statement expected.
+!!! 'try' expected.
+        catch (x) { } // error missing try
+        ~~~~~
+!!! 'try' expected.
+    
+        // no error
+        try {
+        }
+        finally {
+        }
+    
+        // error missing try
+        finally {
+        ~~~~~~~
+!!! 'try' expected.
+        }
+    
+        // error missing try
+        catch (x) {
+        ~~~~~
+!!! 'try' expected.
+        }
     }
\ No newline at end of file
diff --git a/tests/baselines/reference/parserMissingToken1.errors.txt b/tests/baselines/reference/parserMissingToken1.errors.txt
index 670da2ef5c1..35e5e605cb5 100644
--- a/tests/baselines/reference/parserMissingToken1.errors.txt
+++ b/tests/baselines/reference/parserMissingToken1.errors.txt
@@ -1,6 +1,8 @@
-==== tests/cases/conformance/parser/ecmascript5/MissingTokens/parserMissingToken1.ts (2 errors) ====
+==== tests/cases/conformance/parser/ecmascript5/MissingTokens/parserMissingToken1.ts (3 errors) ====
     a / finally
         ~~~~~~~
 !!! Expression expected.
+               
+!!! '{' expected.
     ~
 !!! Cannot find name 'a'.
\ No newline at end of file
diff --git a/tests/cases/conformance/statements/tryStatements/invalidTryStatements2.ts b/tests/cases/conformance/statements/tryStatements/invalidTryStatements2.ts
index de37313e92a..6937e509845 100644
--- a/tests/cases/conformance/statements/tryStatements/invalidTryStatements2.ts
+++ b/tests/cases/conformance/statements/tryStatements/invalidTryStatements2.ts
@@ -5,5 +5,24 @@ function fn() {
 
     catch(x) { } // error missing try
 
-    finally{ } // error missing try
+    finally{ } // potential error; can be absorbed by the 'catch'
+}
+
+function fn2() {
+    finally { } // error missing try
+    catch (x) { } // error missing try
+
+    // no error
+    try {
+    }
+    finally {
+    }
+
+    // error missing try
+    finally {
+    }
+
+    // error missing try
+    catch (x) {
+    }
 }
\ No newline at end of file