diff --git a/src/services/transpile.ts b/src/services/transpile.ts
index 030d2273b62..bdc27ac5e22 100644
--- a/src/services/transpile.ts
+++ b/src/services/transpile.ts
@@ -26,7 +26,15 @@ namespace ts {
     export function transpileModule(input: string, transpileOptions: TranspileOptions): TranspileOutput {
         const diagnostics: Diagnostic[] = [];
 
-        const options: CompilerOptions = transpileOptions.compilerOptions ? fixupCompilerOptions(transpileOptions.compilerOptions, diagnostics) : getDefaultCompilerOptions();
+        const options: CompilerOptions = transpileOptions.compilerOptions ? fixupCompilerOptions(transpileOptions.compilerOptions, diagnostics) : {};
+
+        // mix in default options
+        const defaultOptions = getDefaultCompilerOptions();
+        for (const key in defaultOptions) {
+            if (hasProperty(defaultOptions, key) && options[key] === undefined) {
+                options[key] = defaultOptions[key];
+            }
+        }
 
         options.isolatedModules = true;
 
diff --git a/src/testRunner/unittests/services/transpile.ts b/src/testRunner/unittests/services/transpile.ts
index 8429179ffa3..6e8f3bcac9c 100644
--- a/src/testRunner/unittests/services/transpile.ts
+++ b/src/testRunner/unittests/services/transpile.ts
@@ -17,7 +17,10 @@ namespace ts {
 
                 transpileOptions = testSettings.options || {};
                 if (!transpileOptions.compilerOptions) {
-                    transpileOptions.compilerOptions = {};
+                    transpileOptions.compilerOptions = { };
+                }
+                if (transpileOptions.compilerOptions.target === undefined) {
+                    transpileOptions.compilerOptions.target = ScriptTarget.ES3;
                 }
 
                 if (transpileOptions.compilerOptions.newLine === undefined) {