diff --git a/src/compiler/binder.ts b/src/compiler/binder.ts
index 140902aa4af..26f16c730fb 100644
--- a/src/compiler/binder.ts
+++ b/src/compiler/binder.ts
@@ -685,7 +685,7 @@ namespace ts {
             // post catch/finally state is reachable if
             // - post try state is reachable - control flow can fall out of try block
             // - post catch state is reachable - control flow can fall out of catch block
-            currentReachabilityState = or(postTryState, postCatchState);
+            currentReachabilityState = n.catchClause ? or(postTryState, postCatchState) : postTryState;
         }
 
         function bindSwitchStatement(n: SwitchStatement): void {
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.js b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.js
new file mode 100644
index 00000000000..7f0b89153b5
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.js
@@ -0,0 +1,22 @@
+//// [noImplicitReturnsWithProtectedBlocks1.ts]
+declare function log(s: string): void;
+declare function get(): number;
+
+function main1() : number {
+    try {
+        return get();
+    }
+    finally {
+        log("in finally");
+    }
+}
+
+//// [noImplicitReturnsWithProtectedBlocks1.js]
+function main1() {
+    try {
+        return get();
+    }
+    finally {
+        log("in finally");
+    }
+}
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.symbols b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.symbols
new file mode 100644
index 00000000000..1defb4bbca3
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.symbols
@@ -0,0 +1,20 @@
+=== tests/cases/compiler/noImplicitReturnsWithProtectedBlocks1.ts ===
+declare function log(s: string): void;
+>log : Symbol(log, Decl(noImplicitReturnsWithProtectedBlocks1.ts, 0, 0))
+>s : Symbol(s, Decl(noImplicitReturnsWithProtectedBlocks1.ts, 0, 21))
+
+declare function get(): number;
+>get : Symbol(get, Decl(noImplicitReturnsWithProtectedBlocks1.ts, 0, 38))
+
+function main1() : number {
+>main1 : Symbol(main1, Decl(noImplicitReturnsWithProtectedBlocks1.ts, 1, 31))
+
+    try {
+        return get();
+>get : Symbol(get, Decl(noImplicitReturnsWithProtectedBlocks1.ts, 0, 38))
+    }
+    finally {
+        log("in finally");
+>log : Symbol(log, Decl(noImplicitReturnsWithProtectedBlocks1.ts, 0, 0))
+    }
+}
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.types b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.types
new file mode 100644
index 00000000000..90db4fb42e1
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks1.types
@@ -0,0 +1,23 @@
+=== tests/cases/compiler/noImplicitReturnsWithProtectedBlocks1.ts ===
+declare function log(s: string): void;
+>log : (s: string) => void
+>s : string
+
+declare function get(): number;
+>get : () => number
+
+function main1() : number {
+>main1 : () => number
+
+    try {
+        return get();
+>get() : number
+>get : () => number
+    }
+    finally {
+        log("in finally");
+>log("in finally") : void
+>log : (s: string) => void
+>"in finally" : string
+    }
+}
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks2.errors.txt b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks2.errors.txt
new file mode 100644
index 00000000000..a77bd0462cd
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks2.errors.txt
@@ -0,0 +1,20 @@
+tests/cases/compiler/noImplicitReturnsWithProtectedBlocks2.ts(4,20): error TS7030: Not all code paths return a value.
+
+
+==== tests/cases/compiler/noImplicitReturnsWithProtectedBlocks2.ts (1 errors) ====
+    declare function log(s: string): void;
+    declare function get(): number;
+    
+    function main1() : number {
+                       ~~~~~~
+!!! error TS7030: Not all code paths return a value.
+        try {
+            return get();
+        }
+        catch(e) {
+            log("in catch");
+        }
+        finally {
+            log("in finally");
+        }
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks2.js b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks2.js
new file mode 100644
index 00000000000..857a9686232
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks2.js
@@ -0,0 +1,28 @@
+//// [noImplicitReturnsWithProtectedBlocks2.ts]
+declare function log(s: string): void;
+declare function get(): number;
+
+function main1() : number {
+    try {
+        return get();
+    }
+    catch(e) {
+        log("in catch");
+    }
+    finally {
+        log("in finally");
+    }
+}
+
+//// [noImplicitReturnsWithProtectedBlocks2.js]
+function main1() {
+    try {
+        return get();
+    }
+    catch (e) {
+        log("in catch");
+    }
+    finally {
+        log("in finally");
+    }
+}
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks3.errors.txt b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks3.errors.txt
new file mode 100644
index 00000000000..56f9c701b55
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks3.errors.txt
@@ -0,0 +1,17 @@
+tests/cases/compiler/noImplicitReturnsWithProtectedBlocks3.ts(4,20): error TS7030: Not all code paths return a value.
+
+
+==== tests/cases/compiler/noImplicitReturnsWithProtectedBlocks3.ts (1 errors) ====
+    declare function log(s: string): void;
+    declare function get(): number;
+    
+    function main1() : number {
+                       ~~~~~~
+!!! error TS7030: Not all code paths return a value.
+        try {
+            return get();
+        }
+        catch(e) {
+            log("in catch");
+        }
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks3.js b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks3.js
new file mode 100644
index 00000000000..a70996983f6
--- /dev/null
+++ b/tests/baselines/reference/noImplicitReturnsWithProtectedBlocks3.js
@@ -0,0 +1,22 @@
+//// [noImplicitReturnsWithProtectedBlocks3.ts]
+declare function log(s: string): void;
+declare function get(): number;
+
+function main1() : number {
+    try {
+        return get();
+    }
+    catch(e) {
+        log("in catch");
+    }
+}
+
+//// [noImplicitReturnsWithProtectedBlocks3.js]
+function main1() {
+    try {
+        return get();
+    }
+    catch (e) {
+        log("in catch");
+    }
+}
diff --git a/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks1.ts b/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks1.ts
new file mode 100644
index 00000000000..4b2174386fa
--- /dev/null
+++ b/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks1.ts
@@ -0,0 +1,12 @@
+// @noImplicitReturns: true
+declare function log(s: string): void;
+declare function get(): number;
+
+function main1() : number {
+    try {
+        return get();
+    }
+    finally {
+        log("in finally");
+    }
+}
\ No newline at end of file
diff --git a/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks2.ts b/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks2.ts
new file mode 100644
index 00000000000..fbd12526cf9
--- /dev/null
+++ b/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks2.ts
@@ -0,0 +1,15 @@
+// @noImplicitReturns: true
+declare function log(s: string): void;
+declare function get(): number;
+
+function main1() : number {
+    try {
+        return get();
+    }
+    catch(e) {
+        log("in catch");
+    }
+    finally {
+        log("in finally");
+    }
+}
\ No newline at end of file
diff --git a/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks3.ts b/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks3.ts
new file mode 100644
index 00000000000..1cbb12b1ae0
--- /dev/null
+++ b/tests/cases/compiler/noImplicitReturnsWithProtectedBlocks3.ts
@@ -0,0 +1,12 @@
+// @noImplicitReturns: true
+declare function log(s: string): void;
+declare function get(): number;
+
+function main1() : number {
+    try {
+        return get();
+    }
+    catch(e) {
+        log("in catch");
+    }
+}
\ No newline at end of file