diff --git a/src/harness/unittests/tsserverProjectSystem.ts b/src/harness/unittests/tsserverProjectSystem.ts
index 24d450beeb8..531a4bebf4f 100644
--- a/src/harness/unittests/tsserverProjectSystem.ts
+++ b/src/harness/unittests/tsserverProjectSystem.ts
@@ -1283,5 +1283,26 @@ namespace ts {
             projectService.ensureInferredProjectsUpToDate_TestOnly();
             checkNumberOfProjects(projectService, { inferredProjects: 2 });
         });
+
+        it("project settings for inferred projects", () => {
+            const file1 = {
+                path: "/a/b/app.ts",
+                content: `import {x} from "mod"`
+            };
+            const modFile = {
+                path: "/a/mod.ts",
+                content: "export let x: number"
+            };
+            const host = createServerHost([file1, modFile]);
+            const projectService = new server.ProjectService(host, nullLogger, nullCancellationToken, /*useSingleInferredProject*/ false);
+
+            projectService.openClientFile(file1.path);
+            projectService.openClientFile(modFile.path);
+
+            checkNumberOfProjects(projectService, { inferredProjects: 2 });
+
+            projectService.setCompilerOptionsForInferredProjects({ moduleResolution: ModuleResolutionKind.Classic });
+            checkNumberOfProjects(projectService, { inferredProjects: 1 });
+        });
     });
 }
\ No newline at end of file
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index a11ad2bccd4..3281161969d 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -140,6 +140,7 @@ namespace ts.server {
          */
         readonly openFiles: ScriptInfo[] = [];
 
+        private compilerOptionsForInferredProjects: CompilerOptions;
         private readonly directoryWatchers: DirectoryWatchers;
         private readonly throttledOperations: ThrottledOperations;
 
@@ -176,6 +177,14 @@ namespace ts.server {
             this.ensureInferredProjectsUpToDate();
         }
 
+        setCompilerOptionsForInferredProjects(compilerOptions: CompilerOptions): void {
+            this.compilerOptionsForInferredProjects = compilerOptions;
+            for (const proj of this.inferredProjects) {
+                proj.setCompilerOptions(compilerOptions);
+            }
+            this.updateProjectGraphs(this.inferredProjects);
+        }
+
         stopWatchingDirectory(directory: string) {
             this.directoryWatchers.stopWatchingDirectory(directory);
         }
@@ -809,7 +818,7 @@ namespace ts.server {
             const useExistingProject = this.useSingleInferredProject && this.inferredProjects.length;
             const project = useExistingProject
                 ? this.inferredProjects[0]
-                : new InferredProject(this, this.documentRegistry, /*languageServiceEnabled*/ true);
+                : new InferredProject(this, this.documentRegistry, /*languageServiceEnabled*/ true, this.compilerOptionsForInferredProjects);
 
             project.addRoot(root);
 
diff --git a/src/server/project.ts b/src/server/project.ts
index aba4e4dc41c..0eb3f8d1c73 100644
--- a/src/server/project.ts
+++ b/src/server/project.ts
@@ -267,6 +267,9 @@ namespace ts.server {
 
         setCompilerOptions(compilerOptions: CompilerOptions) {
             if (compilerOptions) {
+                if (this.projectKind === ProjectKind.Inferred) {
+                    compilerOptions.allowJs = true;
+                }
                 compilerOptions.allowNonTsExtensions = true;
                 this.compilerOptions = compilerOptions;
                 this.lsHost.setCompilationSettings(compilerOptions);
@@ -351,13 +354,13 @@ namespace ts.server {
         // Used to keep track of what directories are watched for this project
         directoriesWatchedForTsconfig: string[] = [];
 
-        constructor(projectService: ProjectService, documentRegistry: ts.DocumentRegistry, languageServiceEnabled: boolean) {
+        constructor(projectService: ProjectService, documentRegistry: ts.DocumentRegistry, languageServiceEnabled: boolean, compilerOptions: CompilerOptions) {
             super(ProjectKind.Inferred,
                 projectService,
                 documentRegistry,
                 /*files*/ undefined,
                 languageServiceEnabled,
-                /*compilerOptions*/ undefined);
+                compilerOptions);
 
             this.inferredProjectName = makeInferredProjectName(InferredProject.NextId);
             InferredProject.NextId++;
diff --git a/src/server/protocol.d.ts b/src/server/protocol.d.ts
index 3bef3e600eb..0106bcb2af7 100644
--- a/src/server/protocol.d.ts
+++ b/src/server/protocol.d.ts
@@ -698,6 +698,14 @@ declare namespace ts.server.protocol {
         closedFiles?: string[];
     }
 
+    export interface SetCompilerOptionsForInferredProjectsArgs {
+        options: CompilerOptions;
+    }
+
+    export interface SetCompilerOptionsForInferredProjectsRequest extends Request {
+        arguments: SetCompilerOptionsForInferredProjectsArgs;
+    }
+
     /**
       *  Exit request; value of command field is "exit".  Ask the server process
       *  to exit.
diff --git a/src/server/session.ts b/src/server/session.ts
index c1faaaff6d6..172f8fc93af 100644
--- a/src/server/session.ts
+++ b/src/server/session.ts
@@ -143,6 +143,7 @@ namespace ts.server {
         export const CompilerOptionsDiagnosticsFull = "compilerOptionsDiagnostics-full";
         export const NameOrDottedNameSpan = "nameOrDottedNameSpan";
         export const BreakpointStatement = "breakpointStatement";
+        export const CompilerOptionsForInferredProjects = "compilerOptionsForInferredProjects";
     }
 
     namespace Errors {
@@ -502,6 +503,10 @@ namespace ts.server {
             }
         }
 
+        private setCompilerOptionsForInferredProjects(args: protocol.SetCompilerOptionsForInferredProjectsArgs): void {
+            this.projectService.setCompilerOptionsForInferredProjects(args.options);
+        }
+
         private getProjectInfo(args: protocol.ProjectInfoRequestArgs): protocol.ProjectInfo {
             return this.getProjectInfoWorker(args.file, args.projectFileName, args.needFileNameList);
         }
@@ -1433,6 +1438,9 @@ namespace ts.server {
             [CommandNames.DocumentHighlightsFull]: (request: protocol.DocumentHighlightsRequest) => {
                 return this.requiredResponse(this.getDocumentHighlights(request.arguments, /*simplifiedResult*/ false));
             },
+            [CommandNames.CompilerOptionsForInferredProjects]: (request: protocol.SetCompilerOptionsForInferredProjectsRequest) => {
+                return this.requiredResponse(this.setCompilerOptionsForInferredProjects(request.arguments));
+            },
             [CommandNames.ProjectInfo]: (request: protocol.ProjectInfoRequest) => {
                 return this.requiredResponse(this.getProjectInfo(request.arguments));
             },