diff --git a/src/services/smartIndenter.ts b/src/services/smartIndenter.ts
index cafd92a7551..758c06226a4 100644
--- a/src/services/smartIndenter.ts
+++ b/src/services/smartIndenter.ts
@@ -342,6 +342,7 @@ module ts.formatting {
                 case SyntaxKind.VariableDeclaration:
                 case SyntaxKind.ExportAssignment:
                 case SyntaxKind.ReturnStatement:
+                case SyntaxKind.ConditionalExpression:
                     return true;
             }
             return false;
diff --git a/tests/cases/fourslash/formattingConditionals.ts b/tests/cases/fourslash/formattingConditionals.ts
new file mode 100644
index 00000000000..cb6edfcd56b
--- /dev/null
+++ b/tests/cases/fourslash/formattingConditionals.ts
@@ -0,0 +1,44 @@
+/// <reference path='fourslash.ts' />
+
+
+////var v =
+/////*0*/a === b
+/////*1*/? c
+/////*2*/: d;
+
+////var v = a === b
+/////*3*/? c
+/////*4*/: d;
+
+////var x =
+/////*5*/a
+/////*6*/? function(){
+/////*7*/var z = 1
+/////*8*/}
+/////*9*/: function(){
+/////*10*/var z = 2
+/////*11*/}
+    
+
+
+
+function verifyLine(marker: string, content: string) {
+    goTo.marker(marker);
+    verify.currentLineContentIs(content);
+}
+
+format.document();
+verifyLine("0",  "    a === b");
+verifyLine("1",  "        ? c");
+verifyLine("2",  "        : d;");
+
+verifyLine("3",  "    ? c");
+verifyLine("4",  "    : d;");
+
+verifyLine("5",  "    a");
+verifyLine("6",  "        ? function() {");
+verifyLine("7",  "            var z = 1");
+verifyLine("8",  "        }");
+verifyLine("9",  "        : function() {");
+verifyLine("10", "            var z = 2");
+verifyLine("11", "        }");