diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index 75d18458903..23bbba5c6ca 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -326,13 +326,19 @@ module ts {
         }
 
         function getFiles(): string[] {
-            var references: string[] = json["references"] instanceof Array ? json["references"] : []
-            var files = map(references, s => combinePaths(basePath, s));
-            var sysFiles = sys.readDirectory(basePath, ".ts");
-            for (var i = 0; i < sysFiles.length; i++) {
-                var name = sysFiles[i];
-                if (!fileExtensionIs(name, ".d.ts") || !contains(sysFiles, name.substr(0, name.length - 5) + ".ts")) {
-                    files.push(name);
+            var files: string[] = [];
+            if (hasProperty(json, "files")) {
+                if (json["files"] instanceof Array) {
+                    var files = map(<string[]>json["files"], s => combinePaths(basePath, s));
+                }
+            }
+            else {
+                var sysFiles = sys.readDirectory(basePath, ".ts");
+                for (var i = 0; i < sysFiles.length; i++) {
+                    var name = sysFiles[i];
+                    if (!fileExtensionIs(name, ".d.ts") || !contains(sysFiles, name.substr(0, name.length - 5) + ".ts")) {
+                        files.push(name);
+                    }
                 }
             }
             return files;
diff --git a/src/compiler/diagnosticInformationMap.generated.ts b/src/compiler/diagnosticInformationMap.generated.ts
index 6a9b86399df..a3c28c42a49 100644
--- a/src/compiler/diagnosticInformationMap.generated.ts
+++ b/src/compiler/diagnosticInformationMap.generated.ts
@@ -380,10 +380,11 @@ module ts {
         Unknown_compiler_option_0: { code: 5023, category: DiagnosticCategory.Error, key: "Unknown compiler option '{0}'." },
         Compiler_option_0_requires_a_value_of_type_1: { code: 5024, category: DiagnosticCategory.Error, key: "Compiler option '{0}' requires a value of type {1}." },
         Could_not_write_file_0_Colon_1: { code: 5033, category: DiagnosticCategory.Error, key: "Could not write file '{0}': {1}" },
-        Option_mapRoot_cannot_be_specified_without_specifying_sourcemap_option: { code: 5038, category: DiagnosticCategory.Error, key: "Option mapRoot cannot be specified without specifying sourcemap option." },
-        Option_sourceRoot_cannot_be_specified_without_specifying_sourcemap_option: { code: 5039, category: DiagnosticCategory.Error, key: "Option sourceRoot cannot be specified without specifying sourcemap option." },
-        Option_noEmit_cannot_be_specified_with_option_out_or_outDir: { code: 5040, category: DiagnosticCategory.Error, key: "Option noEmit cannot be specified with option out or outDir." },
-        Option_noEmit_cannot_be_specified_with_option_declaration: { code: 5041, category: DiagnosticCategory.Error, key: "Option noEmit cannot be specified with option declaration." },
+        Option_mapRoot_cannot_be_specified_without_specifying_sourcemap_option: { code: 5038, category: DiagnosticCategory.Error, key: "Option 'mapRoot' cannot be specified without specifying 'sourcemap' option." },
+        Option_sourceRoot_cannot_be_specified_without_specifying_sourcemap_option: { code: 5039, category: DiagnosticCategory.Error, key: "Option 'sourceRoot' cannot be specified without specifying 'sourcemap' option." },
+        Option_noEmit_cannot_be_specified_with_option_out_or_outDir: { code: 5040, category: DiagnosticCategory.Error, key: "Option 'noEmit' cannot be specified with option 'out' or 'outDir'." },
+        Option_noEmit_cannot_be_specified_with_option_declaration: { code: 5041, category: DiagnosticCategory.Error, key: "Option 'noEmit' cannot be specified with option 'declaration'." },
+        Option_project_cannot_be_mixed_with_source_files_on_a_command_line: { code: 5042, category: DiagnosticCategory.Error, key: "Option 'project' cannot be mixed with source files on a command line." },
         Concatenate_and_emit_output_to_single_file: { code: 6001, category: DiagnosticCategory.Message, key: "Concatenate and emit output to single file." },
         Generates_corresponding_d_ts_file: { code: 6002, category: DiagnosticCategory.Message, key: "Generates corresponding '.d.ts' file." },
         Specifies_the_location_where_debugger_should_locate_map_files_instead_of_generated_locations: { code: 6003, category: DiagnosticCategory.Message, key: "Specifies the location where debugger should locate map files instead of generated locations." },
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index 00ac39bd0ec..896af943d9f 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -1618,22 +1618,26 @@
         "category": "Error",
         "code": 5033
     },
-    "Option mapRoot cannot be specified without specifying sourcemap option.": {
+    "Option 'mapRoot' cannot be specified without specifying 'sourcemap' option.": {
         "category": "Error",
         "code": 5038
     },
-    "Option sourceRoot cannot be specified without specifying sourcemap option.": {
+    "Option 'sourceRoot' cannot be specified without specifying 'sourcemap' option.": {
         "category": "Error",
         "code": 5039
     },
-    "Option noEmit cannot be specified with option out or outDir.": {
+    "Option 'noEmit' cannot be specified with option 'out' or 'outDir'.": {
         "category": "Error",
         "code": 5040
     },
-    "Option noEmit cannot be specified with option declaration.": {
+    "Option 'noEmit' cannot be specified with option 'declaration'.": {
         "category": "Error",
         "code": 5041
     },
+    "Option 'project' cannot be mixed with source files on a command line.": {
+        "category": "Error",
+        "code": 5042
+    },
     "Concatenate and emit output to single file.": {
         "category": "Message",
         "code": 6001
diff --git a/src/compiler/tsc.ts b/src/compiler/tsc.ts
index 13a1a8830d5..7fc57c8cf46 100644
--- a/src/compiler/tsc.ts
+++ b/src/compiler/tsc.ts
@@ -127,7 +127,7 @@ module ts {
     }
 
     function findConfigFile(): string {
-        var searchPath = sys.getCurrentDirectory();
+        var searchPath = normalizePath(sys.getCurrentDirectory());
         var filename = "tsconfig.json";
         while (true) {
             if (sys.fileExists(filename)) {
@@ -178,12 +178,16 @@ module ts {
 
         if (compilerOptions.project) {
             configFilename = normalizePath(combinePaths(compilerOptions.project, "tsconfig.json"));
+            if (filenames.length !== 0) {
+                reportDiagnostic(createCompilerDiagnostic(Diagnostics.Option_project_cannot_be_mixed_with_source_files_on_a_command_line));
+                return sys.exit(EmitReturnStatus.CompilerOptionsErrors);
+            }
         }
         else if (filenames.length === 0) {
             configFilename = findConfigFile();
         }
 
-        if (commandLine.filenames.length === 0 && !configFilename) {
+        if (filenames.length === 0 && !configFilename) {
             printVersion();
             printHelp();
             return sys.exit(EmitReturnStatus.CompilerOptionsErrors);