diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index 8ae88d49438..c01314ab47c 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -325,6 +325,15 @@ namespace ts {
             name: "typesRoot",
             type: "string"
         },
+        {
+            name: "types",
+            type: "list",
+            element: {
+                name: "types",
+                type: "string"
+            },
+            description: Diagnostics.Type_declaration_files_to_be_included_in_compilation
+        },
         {
             name: "traceResolution",
             type: "boolean",
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index bceca5d8809..a141db83aaa 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -2637,7 +2637,7 @@
         "category": "Error",
         "code": 6114
     },
-    "======== Resolving type reference directive '{0}' from '{1}', root dir '{2}'. ========": {
+    "======== Resolving type reference directive '{0}', containing file '{1}', root directory '{2}'. ========": {
         "category": "Message",
         "code": 6115
     },
@@ -2665,10 +2665,30 @@
         "category": "Message",
         "code": 6121
     },
-    "======== Resolving type reference directive '{0}' from '{1}', root dir not set. ========": {
+    "======== Resolving type reference directive '{0}', containing file '{1}', root directory not set. ========": {
         "category": "Message",
         "code": 6122
     },
+    "Type declaration files to be included in compilation.": {
+        "category": "Message",
+        "code": 6123
+    },
+    "Looking up in 'node_modules' folder, initial location '{0}'": {
+        "category": "Message",
+        "code": 6124
+    },
+    "Containing file is not specified and root directory cannot be determined, skipping lookup in 'node_modules' folder.": {
+        "category": "Message",
+        "code": 6125
+    },
+    "======== Resolving type reference directive '{0}', containing file not set, root directory '{1}'. ========": {
+        "category": "Message",
+        "code": 6126
+    },
+    "======== Resolving type reference directive '{0}', containing file not set, root directory not set. ========": {
+        "category": "Message",
+        "code": 6127
+    },
     "Variable '{0}' implicitly has an '{1}' type.": {
         "category": "Error",
         "code": 7005
diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index 0c1c987541c..776fede9fbc 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -191,6 +191,11 @@ namespace ts {
 
     const typeReferenceExtensions = [".d.ts"];
 
+    /**
+     * @param {string | undefined} containingFile - file that contains type reference directive, can be undefined if containing file is unknown.
+     * This is possible in case if resolution is performed for directives specified via 'types' parameter. In this case initial path for secondary lookups
+     * is assumed to be the same as root directory of the project.
+     */
     export function resolveTypeReferenceDirective(typeReferenceDirectiveName: string, containingFile: string, options: CompilerOptions, host: ModuleResolutionHost): ResolvedTypeReferenceDirectiveWithFailedLookupLocations {
         const traceEnabled = isTraceEnabled(options, host);
         const moduleResolutionState: ModuleResolutionState = {
@@ -204,11 +209,21 @@ namespace ts {
         const rootDir = options.typesRoot || (options.configFilePath ? getDirectoryPath(options.configFilePath) : undefined);
 
         if (traceEnabled) {
-            if (rootDir !== undefined) {
-                trace(host, Diagnostics.Resolving_type_reference_directive_0_from_1_root_dir_2, typeReferenceDirectiveName, containingFile, rootDir);
+            if (containingFile === undefined) {
+                if (rootDir === undefined) {
+                    trace(host, Diagnostics.Resolving_type_reference_directive_0_containing_file_not_set_root_directory_not_set, typeReferenceDirectiveName);
+                }
+                else {
+                    trace(host, Diagnostics.Resolving_type_reference_directive_0_containing_file_not_set_root_directory_1, typeReferenceDirectiveName, rootDir);
+                }
             }
             else {
-                trace(host, Diagnostics.Resolving_type_reference_directive_0_from_1_root_dir_not_set, typeReferenceDirectiveName, containingFile);
+                if (rootDir === undefined) {
+                    trace(host, Diagnostics.Resolving_type_reference_directive_0_containing_file_1_root_directory_not_set, typeReferenceDirectiveName, containingFile);
+                }
+                else {
+                    trace(host, Diagnostics.Resolving_type_reference_directive_0_containing_file_1_root_directory_2, typeReferenceDirectiveName, containingFile, rootDir);
+                }
             }
         }
 
@@ -244,17 +259,33 @@ namespace ts {
             }
         }
 
-        if (traceEnabled) {
-            trace(host, Diagnostics.Resolving_from_node_modules_folder);
+        let resolvedFile: string;
+        let initialLocationForSecondaryLookup: string;
+        if (containingFile) {
+            initialLocationForSecondaryLookup = getDirectoryPath(containingFile);
         }
-        // check secondary locations
-        const resolvedFile = loadModuleFromNodeModules(typeReferenceDirectiveName, getDirectoryPath(containingFile), failedLookupLocations, moduleResolutionState);
-        if (traceEnabled) {
-            if (resolvedFile) {
-                trace(host, Diagnostics.Type_reference_directive_0_was_successfully_resolved_to_1_primary_Colon_2, typeReferenceDirectiveName, resolvedFile, false);
+        else {
+            initialLocationForSecondaryLookup = rootDir;
+        }
+
+        if (initialLocationForSecondaryLookup !== undefined) {
+            // check secondary locations
+            if (traceEnabled) {
+                trace(host, Diagnostics.Looking_up_in_node_modules_folder_initial_location_0, initialLocationForSecondaryLookup);
             }
-            else {
-                trace(host, Diagnostics.Type_reference_directive_0_was_not_resolved, typeReferenceDirectiveName);
+            resolvedFile = loadModuleFromNodeModules(typeReferenceDirectiveName, initialLocationForSecondaryLookup, failedLookupLocations, moduleResolutionState);
+            if (traceEnabled) {
+                if (resolvedFile) {
+                    trace(host, Diagnostics.Type_reference_directive_0_was_successfully_resolved_to_1_primary_Colon_2, typeReferenceDirectiveName, resolvedFile, false);
+                }
+                else {
+                    trace(host, Diagnostics.Type_reference_directive_0_was_not_resolved, typeReferenceDirectiveName);
+                }
+            }
+        }
+        else {
+            if (traceEnabled) {
+                trace(host, Diagnostics.Containing_file_is_not_specified_and_root_directory_cannot_be_determined_skipping_lookup_in_node_modules_folder);
             }
         }
         return {
@@ -927,24 +958,15 @@ namespace ts {
         // used to track cases when two file names differ only in casing
         const filesByNameIgnoreCase = host.useCaseSensitiveFileNames() ? createFileMap<SourceFile>(fileName => fileName.toLowerCase()) : undefined;
 
-        if (oldProgram) {
-            // check properties that can affect structure of the program or module resolution strategy
-            // if any of these properties has changed - structure cannot be reused
-            const oldOptions = oldProgram.getCompilerOptions();
-            if ((oldOptions.module !== options.module) ||
-                (oldOptions.noResolve !== options.noResolve) ||
-                (oldOptions.target !== options.target) ||
-                (oldOptions.noLib !== options.noLib) ||
-                (oldOptions.jsx !== options.jsx) ||
-                (oldOptions.allowJs !== options.allowJs) ||
-                (oldOptions.rootDir !== options.rootDir) ||
-                (oldOptions.typesSearchPaths !== options.typesSearchPaths) ||
-                (oldOptions.configFilePath !== options.configFilePath)) {
-                oldProgram = undefined;
-            }
-        }
-
         if (!tryReuseStructureFromOldProgram()) {
+            // load type declarations specified via 'types' argument
+            if (options.types && options.types.length) {
+                const resolutions = resolveTypeReferenceDirectiveNamesWorker(options.types, /*containingFile*/ undefined);
+                for (let i = 0; i < options.types.length; i++) {
+                    processTypeReferenceDirective(options.types[i], resolutions[i]);
+                }
+            }
+
             forEach(rootNames, name => processRootFile(name, /*isDefaultLib*/ false));
             // Do not process the default library if:
             //  - The '--noLib' flag is used.
@@ -1036,6 +1058,21 @@ namespace ts {
                 return false;
             }
 
+            // check properties that can affect structure of the program or module resolution strategy
+            // if any of these properties has changed - structure cannot be reused
+            const oldOptions = oldProgram.getCompilerOptions();
+            if ((oldOptions.module !== options.module) ||
+                (oldOptions.noResolve !== options.noResolve) ||
+                (oldOptions.target !== options.target) ||
+                (oldOptions.noLib !== options.noLib) ||
+                (oldOptions.jsx !== options.jsx) ||
+                (oldOptions.allowJs !== options.allowJs) ||
+                (oldOptions.rootDir !== options.rootDir) ||
+                (oldOptions.typesSearchPaths !== options.typesSearchPaths) ||
+                (oldOptions.configFilePath !== options.configFilePath)) {
+                return false;
+            }
+
             Debug.assert(!oldProgram.structureIsReused);
 
             // there is an old program, check if we can reuse its structure
@@ -1044,6 +1081,10 @@ namespace ts {
                 return false;
             }
 
+            if (!arrayIsEqualTo(options.types, oldOptions.types)) {
+                return false;
+            }
+
             // check if program source files has changed in the way that can affect structure of the program
             const newSourceFiles: SourceFile[] = [];
             const filePaths: Path[] = [];
@@ -1733,45 +1774,61 @@ namespace ts {
                 const resolvedTypeReferenceDirective = resolutions[i];
                 // store resolved type directive on the file
                 setResolvedTypeReferenceDirective(file, ref.fileName, resolvedTypeReferenceDirective);
-                // If we already found this library as a primary reference - nothing to do
-                const previousResolution = resolvedTypeReferenceDirectives[ref.fileName];
-                if (previousResolution && previousResolution.primary) {
-                    continue;
-                }
-                let saveResolution = true;
-                if (resolvedTypeReferenceDirective) {
-                    if (resolvedTypeReferenceDirective.primary) {
-                        // resolved from the primary path
-                        processSourceFile(resolvedTypeReferenceDirective.resolvedFileName, /*isDefaultLib*/ false, /*isReference*/ true, file, ref.pos, ref.end);
-                    }
-                    else {
-                        // If we already resolved to this file, it must have been a secondary reference. Check file contents
-                        // for sameness and possibly issue an error
-                        if (previousResolution) {
-                            const otherFileText = host.readFile(resolvedTypeReferenceDirective.resolvedFileName);
-                            if (otherFileText !== getSourceFile(previousResolution.resolvedFileName).text) {
-                                fileProcessingDiagnostics.add(createFileDiagnostic(file, ref.pos, ref.end - ref.pos,
-                                    Diagnostics.Conflicting_library_definitions_for_0_found_at_1_and_2_Copy_the_correct_file_to_the_typings_folder_to_resolve_this_conflict,
-                                    ref.fileName,
-                                    resolvedTypeReferenceDirective.resolvedFileName,
-                                    previousResolution.resolvedFileName));
-                            }
-                            // don't overwrite previous resolution result
-                            saveResolution = false;
-                        }
-                        else {
-                            // First resolution of this library
-                            processSourceFile(resolvedTypeReferenceDirective.resolvedFileName, /*isDefaultLib*/ false, /*isReference*/ true, file, ref.pos, ref.end);
-                        }
-                    }
+                processTypeReferenceDirective(ref.fileName, resolvedTypeReferenceDirective, file, ref.pos, ref.end);
+            }
+        }
+
+        function processTypeReferenceDirective(typeReferenceDirective: string, resolvedTypeReferenceDirective: ResolvedTypeReferenceDirective,
+            refFile?: SourceFile, refPos?: number, refEnd?: number): void {
+
+            // If we already found this library as a primary reference - nothing to do
+            const previousResolution = resolvedTypeReferenceDirectives[typeReferenceDirective];
+            if (previousResolution && previousResolution.primary) {
+                return;
+            }
+            let saveResolution = true;
+            if (resolvedTypeReferenceDirective) {
+                if (resolvedTypeReferenceDirective.primary) {
+                    // resolved from the primary path
+                    processSourceFile(resolvedTypeReferenceDirective.resolvedFileName, /*isDefaultLib*/ false, /*isReference*/ true, refFile, refPos, refEnd);
                 }
                 else {
-                    fileProcessingDiagnostics.add(createFileDiagnostic(file, ref.pos, ref.end - ref.pos, Diagnostics.Cannot_find_name_0, ref.fileName));
+                    // If we already resolved to this file, it must have been a secondary reference. Check file contents
+                    // for sameness and possibly issue an error
+                    if (previousResolution) {
+                        const otherFileText = host.readFile(resolvedTypeReferenceDirective.resolvedFileName);
+                        if (otherFileText !== getSourceFile(previousResolution.resolvedFileName).text) {
+                            fileProcessingDiagnostics.add(createDiagnostic(refFile, refPos, refEnd,
+                                Diagnostics.Conflicting_library_definitions_for_0_found_at_1_and_2_Copy_the_correct_file_to_the_typings_folder_to_resolve_this_conflict,
+                                typeReferenceDirective,
+                                resolvedTypeReferenceDirective.resolvedFileName,
+                                previousResolution.resolvedFileName
+                            ));
+                        }
+                        // don't overwrite previous resolution result
+                        saveResolution = false;
+                    }
+                    else {
+                        // First resolution of this library
+                        processSourceFile(resolvedTypeReferenceDirective.resolvedFileName, /*isDefaultLib*/ false, /*isReference*/ true, refFile, refPos, refEnd);
+                    }
                 }
+            }
+            else {
+                fileProcessingDiagnostics.add(createDiagnostic(refFile, refPos, refEnd, Diagnostics.Cannot_find_name_0, typeReferenceDirective));
+            }
 
-                if (saveResolution) {
-                    resolvedTypeReferenceDirectives[ref.fileName] = resolvedTypeReferenceDirective;
-                }
+            if (saveResolution) {
+                resolvedTypeReferenceDirectives[typeReferenceDirective] = resolvedTypeReferenceDirective;
+            }
+        }
+
+        function createDiagnostic(refFile: SourceFile, refPos: number, refEnd: number, message: DiagnosticMessage, ...args: any[]): Diagnostic {
+            if (refFile === undefined || refPos === undefined || refEnd === undefined) {
+                return createCompilerDiagnostic(message, ...args);
+            }
+            else {
+                return createFileDiagnostic(refFile, refPos, refEnd - refPos, message, ...args);
             }
         }
 
diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index 9497a7ebfe6..e0e7ad95c34 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -2476,6 +2476,7 @@ namespace ts {
         /* @internal */
         // Path used to used to compute primary search locations 
         typesRoot?: string;
+        types?: string[];
 
         list?: string[];
         [option: string]: CompilerOptionsValue;
diff --git a/tests/baselines/reference/library-reference-1.trace.json b/tests/baselines/reference/library-reference-1.trace.json
index be96aa1d852..1b8c237dff1 100644
--- a/tests/baselines/reference/library-reference-1.trace.json
+++ b/tests/baselines/reference/library-reference-1.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/consumer.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/consumer.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "File '/types/jquery/package.json' does not exist.",
     "File '/types/jquery/index.d.ts' exist - use it as a name resolution result.",
diff --git a/tests/baselines/reference/library-reference-10.trace.json b/tests/baselines/reference/library-reference-10.trace.json
index 1645195146d..e6a1918a446 100644
--- a/tests/baselines/reference/library-reference-10.trace.json
+++ b/tests/baselines/reference/library-reference-10.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/consumer.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/consumer.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "Found 'package.json' at '/types/jquery/package.json'.",
     "'package.json' has 'typings' field 'jquery.d.ts' that references '/types/jquery/jquery.d.ts'.",
diff --git a/tests/baselines/reference/library-reference-11.trace.json b/tests/baselines/reference/library-reference-11.trace.json
index 912ff1d2114..e0af1e39c5a 100644
--- a/tests/baselines/reference/library-reference-11.trace.json
+++ b/tests/baselines/reference/library-reference-11.trace.json
@@ -1,7 +1,7 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/a/b/consumer.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/a/b/consumer.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/a/b'",
     "File '/a/b/node_modules/jquery.ts' does not exist.",
     "File '/a/b/node_modules/jquery.d.ts' does not exist.",
     "File '/a/b/node_modules/jquery/package.json' does not exist.",
diff --git a/tests/baselines/reference/library-reference-12.trace.json b/tests/baselines/reference/library-reference-12.trace.json
index 47a4d7f0220..2cdf1f5f20a 100644
--- a/tests/baselines/reference/library-reference-12.trace.json
+++ b/tests/baselines/reference/library-reference-12.trace.json
@@ -1,7 +1,7 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/a/b/consumer.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/a/b/consumer.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/a/b'",
     "File '/a/b/node_modules/jquery.ts' does not exist.",
     "File '/a/b/node_modules/jquery.d.ts' does not exist.",
     "File '/a/b/node_modules/jquery/package.json' does not exist.",
diff --git a/tests/baselines/reference/library-reference-13.js b/tests/baselines/reference/library-reference-13.js
new file mode 100644
index 00000000000..be52aba1a39
--- /dev/null
+++ b/tests/baselines/reference/library-reference-13.js
@@ -0,0 +1,12 @@
+//// [tests/cases/conformance/references/library-reference-13.ts] ////
+
+//// [index.d.ts]
+declare var $: { foo(): void };
+
+
+//// [consumer.ts]
+$.foo();
+
+
+//// [consumer.js]
+$.foo();
diff --git a/tests/baselines/reference/library-reference-13.symbols b/tests/baselines/reference/library-reference-13.symbols
new file mode 100644
index 00000000000..04d50373caa
--- /dev/null
+++ b/tests/baselines/reference/library-reference-13.symbols
@@ -0,0 +1,12 @@
+=== /a/b/consumer.ts ===
+$.foo();
+>$.foo : Symbol(foo, Decl(index.d.ts, 0, 16))
+>$ : Symbol($, Decl(index.d.ts, 0, 11))
+>foo : Symbol(foo, Decl(index.d.ts, 0, 16))
+
+=== /a/types/jquery/index.d.ts ===
+declare var $: { foo(): void };
+>$ : Symbol($, Decl(index.d.ts, 0, 11))
+>foo : Symbol(foo, Decl(index.d.ts, 0, 16))
+
+
diff --git a/tests/baselines/reference/library-reference-13.trace.json b/tests/baselines/reference/library-reference-13.trace.json
new file mode 100644
index 00000000000..2133414f414
--- /dev/null
+++ b/tests/baselines/reference/library-reference-13.trace.json
@@ -0,0 +1,7 @@
+[
+    "======== Resolving type reference directive 'jquery', containing file not set, root directory '/a'. ========",
+    "Resolving with primary search path '/a/types/'",
+    "File '/a/types/jquery/package.json' does not exist.",
+    "File '/a/types/jquery/index.d.ts' exist - use it as a name resolution result.",
+    "======== Type reference directive 'jquery' was successfully resolved to '/a/types/jquery/index.d.ts', primary: true. ========"
+]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-13.types b/tests/baselines/reference/library-reference-13.types
new file mode 100644
index 00000000000..b00d778c5b2
--- /dev/null
+++ b/tests/baselines/reference/library-reference-13.types
@@ -0,0 +1,13 @@
+=== /a/b/consumer.ts ===
+$.foo();
+>$.foo() : void
+>$.foo : () => void
+>$ : { foo(): void; }
+>foo : () => void
+
+=== /a/types/jquery/index.d.ts ===
+declare var $: { foo(): void };
+>$ : { foo(): void; }
+>foo : () => void
+
+
diff --git a/tests/baselines/reference/library-reference-14.js b/tests/baselines/reference/library-reference-14.js
new file mode 100644
index 00000000000..0fb5ff04fb9
--- /dev/null
+++ b/tests/baselines/reference/library-reference-14.js
@@ -0,0 +1,13 @@
+//// [tests/cases/conformance/references/library-reference-14.ts] ////
+
+//// [index.d.ts]
+
+declare var $: { foo(): void };
+
+
+//// [consumer.ts]
+$.foo();
+
+
+//// [consumer.js]
+$.foo();
diff --git a/tests/baselines/reference/library-reference-14.symbols b/tests/baselines/reference/library-reference-14.symbols
new file mode 100644
index 00000000000..162afc50ca7
--- /dev/null
+++ b/tests/baselines/reference/library-reference-14.symbols
@@ -0,0 +1,13 @@
+=== /a/b/consumer.ts ===
+$.foo();
+>$.foo : Symbol(foo, Decl(index.d.ts, 1, 16))
+>$ : Symbol($, Decl(index.d.ts, 1, 11))
+>foo : Symbol(foo, Decl(index.d.ts, 1, 16))
+
+=== /a/types/jquery/index.d.ts ===
+
+declare var $: { foo(): void };
+>$ : Symbol($, Decl(index.d.ts, 1, 11))
+>foo : Symbol(foo, Decl(index.d.ts, 1, 16))
+
+
diff --git a/tests/baselines/reference/library-reference-14.trace.json b/tests/baselines/reference/library-reference-14.trace.json
new file mode 100644
index 00000000000..2133414f414
--- /dev/null
+++ b/tests/baselines/reference/library-reference-14.trace.json
@@ -0,0 +1,7 @@
+[
+    "======== Resolving type reference directive 'jquery', containing file not set, root directory '/a'. ========",
+    "Resolving with primary search path '/a/types/'",
+    "File '/a/types/jquery/package.json' does not exist.",
+    "File '/a/types/jquery/index.d.ts' exist - use it as a name resolution result.",
+    "======== Type reference directive 'jquery' was successfully resolved to '/a/types/jquery/index.d.ts', primary: true. ========"
+]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-14.types b/tests/baselines/reference/library-reference-14.types
new file mode 100644
index 00000000000..f4196e10744
--- /dev/null
+++ b/tests/baselines/reference/library-reference-14.types
@@ -0,0 +1,14 @@
+=== /a/b/consumer.ts ===
+$.foo();
+>$.foo() : void
+>$.foo : () => void
+>$ : { foo(): void; }
+>foo : () => void
+
+=== /a/types/jquery/index.d.ts ===
+
+declare var $: { foo(): void };
+>$ : { foo(): void; }
+>foo : () => void
+
+
diff --git a/tests/baselines/reference/library-reference-15.errors.txt b/tests/baselines/reference/library-reference-15.errors.txt
new file mode 100644
index 00000000000..a311633ca76
--- /dev/null
+++ b/tests/baselines/reference/library-reference-15.errors.txt
@@ -0,0 +1,15 @@
+error TS2304: Cannot find name 'jquery'.
+/a/b/consumer.ts(1,1): error TS2304: Cannot find name '$'.
+
+
+!!! error TS2304: Cannot find name 'jquery'.
+==== /a/b/consumer.ts (1 errors) ====
+    $.foo();
+    ~
+!!! error TS2304: Cannot find name '$'.
+    
+==== /a/types/jquery/index.d.ts (0 errors) ====
+    
+    declare var $: { foo(): void };
+    
+    
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-15.js b/tests/baselines/reference/library-reference-15.js
new file mode 100644
index 00000000000..f9aa7038d53
--- /dev/null
+++ b/tests/baselines/reference/library-reference-15.js
@@ -0,0 +1,13 @@
+//// [tests/cases/conformance/references/library-reference-15.ts] ////
+
+//// [index.d.ts]
+
+declare var $: { foo(): void };
+
+
+//// [consumer.ts]
+$.foo();
+
+
+//// [consumer.js]
+$.foo();
diff --git a/tests/baselines/reference/library-reference-15.trace.json b/tests/baselines/reference/library-reference-15.trace.json
new file mode 100644
index 00000000000..9a19d75ffac
--- /dev/null
+++ b/tests/baselines/reference/library-reference-15.trace.json
@@ -0,0 +1,5 @@
+[
+    "======== Resolving type reference directive 'jquery', containing file not set, root directory not set. ========",
+    "Root directory cannot be determined, skipping primary search paths.",
+    "Containing file is not specified and root directory cannot be determined, skipping lookup in 'node_modules' folder."
+]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-2.trace.json b/tests/baselines/reference/library-reference-2.trace.json
index f18c6548b7e..b5ef5f3e208 100644
--- a/tests/baselines/reference/library-reference-2.trace.json
+++ b/tests/baselines/reference/library-reference-2.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/consumer.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/consumer.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "Found 'package.json' at '/types/jquery/package.json'.",
     "'package.json' has 'types' field 'jquery.d.ts' that references '/types/jquery/jquery.d.ts'.",
diff --git a/tests/baselines/reference/library-reference-3.trace.json b/tests/baselines/reference/library-reference-3.trace.json
index b1bd279e16c..30dbbc3fca4 100644
--- a/tests/baselines/reference/library-reference-3.trace.json
+++ b/tests/baselines/reference/library-reference-3.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/src/consumer.ts', root dir '/src'. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/src/consumer.ts', root directory '/src'. ========",
     "Resolving with primary search path '/src/types/'",
     "File '/src/types/jquery/package.json' does not exist.",
     "File '/src/types/jquery/index.d.ts' does not exist.",
diff --git a/tests/baselines/reference/library-reference-4.trace.json b/tests/baselines/reference/library-reference-4.trace.json
index 363eb020afb..90b6eb7b01d 100644
--- a/tests/baselines/reference/library-reference-4.trace.json
+++ b/tests/baselines/reference/library-reference-4.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'foo' from '/src/root.ts', root dir '/src'. ========",
+    "======== Resolving type reference directive 'foo', containing file '/src/root.ts', root directory '/src'. ========",
     "Resolving with primary search path '/src/types/'",
     "File '/src/types/foo/package.json' does not exist.",
     "File '/src/types/foo/index.d.ts' does not exist.",
@@ -9,7 +9,7 @@
     "Resolving with primary search path '/src/node_modules/@types/'",
     "File '/src/node_modules/@types/foo/package.json' does not exist.",
     "File '/src/node_modules/@types/foo/index.d.ts' does not exist.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/src'",
     "File '/src/node_modules/foo.ts' does not exist.",
     "File '/src/node_modules/foo.d.ts' does not exist.",
     "File '/src/node_modules/foo/package.json' does not exist.",
@@ -26,7 +26,7 @@
     "File '/node_modules/foo/index.ts' does not exist.",
     "File '/node_modules/foo/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'foo' was successfully resolved to '/node_modules/foo/index.d.ts', primary: false. ========",
-    "======== Resolving type reference directive 'bar' from '/src/root.ts', root dir '/src'. ========",
+    "======== Resolving type reference directive 'bar', containing file '/src/root.ts', root directory '/src'. ========",
     "Resolving with primary search path '/src/types/'",
     "File '/src/types/bar/package.json' does not exist.",
     "File '/src/types/bar/index.d.ts' does not exist.",
@@ -36,7 +36,7 @@
     "Resolving with primary search path '/src/node_modules/@types/'",
     "File '/src/node_modules/@types/bar/package.json' does not exist.",
     "File '/src/node_modules/@types/bar/index.d.ts' does not exist.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/src'",
     "File '/src/node_modules/bar.ts' does not exist.",
     "File '/src/node_modules/bar.d.ts' does not exist.",
     "File '/src/node_modules/bar/package.json' does not exist.",
@@ -53,7 +53,7 @@
     "File '/node_modules/bar/index.ts' does not exist.",
     "File '/node_modules/bar/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'bar' was successfully resolved to '/node_modules/bar/index.d.ts', primary: false. ========",
-    "======== Resolving type reference directive 'alpha' from '/node_modules/foo/index.d.ts', root dir '/src'. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/node_modules/foo/index.d.ts', root directory '/src'. ========",
     "Resolving with primary search path '/src/types/'",
     "File '/src/types/alpha/package.json' does not exist.",
     "File '/src/types/alpha/index.d.ts' does not exist.",
@@ -63,14 +63,14 @@
     "Resolving with primary search path '/src/node_modules/@types/'",
     "File '/src/node_modules/@types/alpha/package.json' does not exist.",
     "File '/src/node_modules/@types/alpha/index.d.ts' does not exist.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/node_modules/foo'",
     "File '/node_modules/foo/node_modules/alpha.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/package.json' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/index.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'alpha' was successfully resolved to '/node_modules/foo/node_modules/alpha/index.d.ts', primary: false. ========",
-    "======== Resolving type reference directive 'alpha' from '/node_modules/bar/index.d.ts', root dir '/src'. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/node_modules/bar/index.d.ts', root directory '/src'. ========",
     "Resolving with primary search path '/src/types/'",
     "File '/src/types/alpha/package.json' does not exist.",
     "File '/src/types/alpha/index.d.ts' does not exist.",
@@ -80,7 +80,7 @@
     "Resolving with primary search path '/src/node_modules/@types/'",
     "File '/src/node_modules/@types/alpha/package.json' does not exist.",
     "File '/src/node_modules/@types/alpha/index.d.ts' does not exist.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/node_modules/bar'",
     "File '/node_modules/bar/node_modules/alpha.ts' does not exist.",
     "File '/node_modules/bar/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/bar/node_modules/alpha/package.json' does not exist.",
diff --git a/tests/baselines/reference/library-reference-5.trace.json b/tests/baselines/reference/library-reference-5.trace.json
index 718ccfc37e4..272009782b5 100644
--- a/tests/baselines/reference/library-reference-5.trace.json
+++ b/tests/baselines/reference/library-reference-5.trace.json
@@ -1,7 +1,7 @@
 [
-    "======== Resolving type reference directive 'foo' from '/src/root.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'foo', containing file '/src/root.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/src'",
     "File '/src/node_modules/foo.ts' does not exist.",
     "File '/src/node_modules/foo.d.ts' does not exist.",
     "File '/src/node_modules/foo/package.json' does not exist.",
@@ -18,9 +18,9 @@
     "File '/node_modules/foo/index.ts' does not exist.",
     "File '/node_modules/foo/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'foo' was successfully resolved to '/node_modules/foo/index.d.ts', primary: false. ========",
-    "======== Resolving type reference directive 'bar' from '/src/root.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'bar', containing file '/src/root.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/src'",
     "File '/src/node_modules/bar.ts' does not exist.",
     "File '/src/node_modules/bar.d.ts' does not exist.",
     "File '/src/node_modules/bar/package.json' does not exist.",
@@ -37,18 +37,18 @@
     "File '/node_modules/bar/index.ts' does not exist.",
     "File '/node_modules/bar/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'bar' was successfully resolved to '/node_modules/bar/index.d.ts', primary: false. ========",
-    "======== Resolving type reference directive 'alpha' from '/node_modules/foo/index.d.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/node_modules/foo/index.d.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/node_modules/foo'",
     "File '/node_modules/foo/node_modules/alpha.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/package.json' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/index.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'alpha' was successfully resolved to '/node_modules/foo/node_modules/alpha/index.d.ts', primary: false. ========",
-    "======== Resolving type reference directive 'alpha' from '/node_modules/bar/index.d.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/node_modules/bar/index.d.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/node_modules/bar'",
     "File '/node_modules/bar/node_modules/alpha.ts' does not exist.",
     "File '/node_modules/bar/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/bar/node_modules/alpha/package.json' does not exist.",
diff --git a/tests/baselines/reference/library-reference-6.trace.json b/tests/baselines/reference/library-reference-6.trace.json
index 7009af6b853..426214fdcfc 100644
--- a/tests/baselines/reference/library-reference-6.trace.json
+++ b/tests/baselines/reference/library-reference-6.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'alpha' from '/src/foo.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/src/foo.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "File '/types/alpha/package.json' does not exist.",
     "File '/types/alpha/index.d.ts' exist - use it as a name resolution result.",
diff --git a/tests/baselines/reference/library-reference-7.trace.json b/tests/baselines/reference/library-reference-7.trace.json
index 5d3e23564c7..419fe6d055d 100644
--- a/tests/baselines/reference/library-reference-7.trace.json
+++ b/tests/baselines/reference/library-reference-7.trace.json
@@ -1,7 +1,7 @@
 [
-    "======== Resolving type reference directive 'jquery' from '/src/consumer.ts', root dir not set. ========",
+    "======== Resolving type reference directive 'jquery', containing file '/src/consumer.ts', root directory not set. ========",
     "Root directory cannot be determined, skipping primary search paths.",
-    "Resolving from node_modules folder...",
+    "Looking up in 'node_modules' folder, initial location '/src'",
     "File '/src/node_modules/jquery.ts' does not exist.",
     "File '/src/node_modules/jquery.d.ts' does not exist.",
     "File '/src/node_modules/jquery/package.json' does not exist.",
diff --git a/tests/baselines/reference/library-reference-8.trace.json b/tests/baselines/reference/library-reference-8.trace.json
index 1f0cced6c34..b1dc6478688 100644
--- a/tests/baselines/reference/library-reference-8.trace.json
+++ b/tests/baselines/reference/library-reference-8.trace.json
@@ -1,20 +1,20 @@
 [
-    "======== Resolving type reference directive 'alpha' from '/foo.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/foo.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "File '/types/alpha/package.json' does not exist.",
     "File '/types/alpha/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'alpha' was successfully resolved to '/types/alpha/index.d.ts', primary: true. ========",
-    "======== Resolving type reference directive 'beta' from '/foo.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'beta', containing file '/foo.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "File '/types/beta/package.json' does not exist.",
     "File '/types/beta/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'beta' was successfully resolved to '/types/beta/index.d.ts', primary: true. ========",
-    "======== Resolving type reference directive 'beta' from '/types/alpha/index.d.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'beta', containing file '/types/alpha/index.d.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "File '/types/beta/package.json' does not exist.",
     "File '/types/beta/index.d.ts' exist - use it as a name resolution result.",
     "======== Type reference directive 'beta' was successfully resolved to '/types/beta/index.d.ts', primary: true. ========",
-    "======== Resolving type reference directive 'alpha' from '/types/beta/index.d.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/types/beta/index.d.ts', root directory '/'. ========",
     "Resolving with primary search path '/types/'",
     "File '/types/alpha/package.json' does not exist.",
     "File '/types/alpha/index.d.ts' exist - use it as a name resolution result.",
diff --git a/tests/baselines/reference/library-reference-9.trace.json b/tests/baselines/reference/library-reference-9.trace.json
index d44abcac839..e2fdfdc0550 100644
--- a/tests/baselines/reference/library-reference-9.trace.json
+++ b/tests/baselines/reference/library-reference-9.trace.json
@@ -1,5 +1,5 @@
 [
-    "======== Resolving type reference directive 'alpha' from '/base/src/foo.ts', root dir '/'. ========",
+    "======== Resolving type reference directive 'alpha', containing file '/base/src/foo.ts', root directory '/'. ========",
     "Resolving with primary search path '/share/typelib'",
     "File '/share/typelib/alpha/package.json' does not exist.",
     "File '/share/typelib/alpha/index.d.ts' exist - use it as a name resolution result.",
diff --git a/tests/cases/conformance/references/library-reference-13.ts b/tests/cases/conformance/references/library-reference-13.ts
new file mode 100644
index 00000000000..a96437f9b2c
--- /dev/null
+++ b/tests/cases/conformance/references/library-reference-13.ts
@@ -0,0 +1,18 @@
+// @noImplicitReferences: true
+// @traceResolution: true
+
+// load type declarations from types section of tsconfig
+
+// @filename: /a/tsconfig.json
+{
+    "compilerOptions": {
+        "types": [ "jquery" ]
+    }
+}
+
+// @filename: /a/types/jquery/index.d.ts
+declare var $: { foo(): void };
+
+
+// @filename: /a/b/consumer.ts
+$.foo();
diff --git a/tests/cases/conformance/references/library-reference-14.ts b/tests/cases/conformance/references/library-reference-14.ts
new file mode 100644
index 00000000000..53bca2ab40d
--- /dev/null
+++ b/tests/cases/conformance/references/library-reference-14.ts
@@ -0,0 +1,11 @@
+// @noImplicitReferences: true
+// @traceResolution: true
+// @types: jquery
+// @typesRoot: /a
+
+// @filename: /a/types/jquery/index.d.ts
+declare var $: { foo(): void };
+
+
+// @filename: /a/b/consumer.ts
+$.foo();
diff --git a/tests/cases/conformance/references/library-reference-15.ts b/tests/cases/conformance/references/library-reference-15.ts
new file mode 100644
index 00000000000..92c96e74c97
--- /dev/null
+++ b/tests/cases/conformance/references/library-reference-15.ts
@@ -0,0 +1,10 @@
+// @noImplicitReferences: true
+// @traceResolution: true
+// @types: jquery
+
+// @filename: /a/types/jquery/index.d.ts
+declare var $: { foo(): void };
+
+
+// @filename: /a/b/consumer.ts
+$.foo();