diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index 82ae2aac38b..c7599e9bd6b 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -2850,7 +2850,10 @@ namespace ts {
     export function parseConfigHostFromCompilerHost(host: CompilerHost): ParseConfigFileHost {
         return {
             fileExists: f => host.fileExists(f),
-            readDirectory: (root, extensions, includes, depth?) => host.readDirectory ? host.readDirectory(root, extensions, includes, depth) : [],
+            readDirectory(root, extensions, excludes, includes, depth) {
+                Debug.assertDefined(host.readDirectory, "'CompilerHost.readDirectory' must be implemented to correctly process 'projectReferences'");
+                return host.readDirectory!(root, extensions, excludes, includes, depth);
+            },
             readFile: f => host.readFile(f),
             useCaseSensitiveFileNames: host.useCaseSensitiveFileNames(),
             getCurrentDirectory: () => host.getCurrentDirectory(),
diff --git a/src/services/services.ts b/src/services/services.ts
index 0cbd4107028..57c45359179 100644
--- a/src/services/services.ts
+++ b/src/services/services.ts
@@ -1218,6 +1218,10 @@ namespace ts {
                 getDirectories: path => {
                     return host.getDirectories ? host.getDirectories(path) : [];
                 },
+                readDirectory(path, extensions, exclude, include, depth) {
+                    Debug.assertDefined(host.readDirectory, "'LanguageServiceHost.readDirectory' must be implemented to correctly process 'projectReferences'");
+                    return host.readDirectory!(path, extensions, exclude, include, depth);
+                },
                 onReleaseOldSourceFile,
                 hasInvalidatedResolution,
                 hasChangedAutomaticTypeDirectiveNames: host.hasChangedAutomaticTypeDirectiveNames