diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 431d81696a1..9e88a6cb01a 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -66,8 +66,8 @@ module ts {
         var numberType = createIntrinsicType(TypeFlags.Number, "number");
         var booleanType = createIntrinsicType(TypeFlags.Boolean, "boolean");
         var voidType = createIntrinsicType(TypeFlags.Void, "void");
-        var undefinedType = createIntrinsicType(TypeFlags.Undefined | TypeFlags.ContainsUndefined, "undefined");
-        var nullType = createIntrinsicType(TypeFlags.Null | TypeFlags.ContainsUndefined, "null");
+        var undefinedType = createIntrinsicType(TypeFlags.Undefined | TypeFlags.ContainsUndefinedOrNull, "undefined");
+        var nullType = createIntrinsicType(TypeFlags.Null | TypeFlags.ContainsUndefinedOrNull, "null");
         var unknownType = createIntrinsicType(TypeFlags.Any, "unknown");
         var resolvingType = createIntrinsicType(TypeFlags.Any, "__resolving__");
 
@@ -2807,6 +2807,9 @@ module ts {
             }
         }
 
+        // This function is used to propagate widening flags when creating new object types references and union types.
+        // It is only necessary to do so if a constituent type might be the undefined type, the null type, or the type
+        // of an object literal (since those types have widening related information we need to track).
         function getWideningFlagsOfTypes(types: Type[]): TypeFlags {
             var result: TypeFlags = 0;
             for (var i = 0; i < types.length; i++) {
@@ -4111,7 +4114,7 @@ module ts {
                     var symbol = <TransientSymbol>createSymbol(p.flags | SymbolFlags.Transient, p.name);
                     symbol.declarations = p.declarations;
                     symbol.parent = p.parent;
-                    symbol.type = getWidenedType(getTypeOfSymbol(p));
+                    symbol.type = widenedType;
                     symbol.target = p;
                     if (p.valueDeclaration) symbol.valueDeclaration = p.valueDeclaration;
                     p = symbol;
@@ -4160,7 +4163,7 @@ module ts {
                 var errorReported = false;
                 forEach(getPropertiesOfObjectType(type), p => {
                     var t = getTypeOfSymbol(p);
-                    if (t.flags & TypeFlags.ContainsUndefined) {
+                    if (t.flags & TypeFlags.ContainsUndefinedOrNull) {
                         if (!reportWideningErrorsInType(t)) {
                             error(p.valueDeclaration, Diagnostics.Object_literal_s_property_0_implicitly_has_an_1_type, p.name, typeToString(getWidenedType(t)));
                         }
@@ -4204,7 +4207,7 @@ module ts {
         }
 
         function reportErrorsFromWidening(declaration: Declaration, type: Type) {
-            if (produceDiagnostics && compilerOptions.noImplicitAny && type.flags & TypeFlags.ContainsUndefined) {
+            if (produceDiagnostics && compilerOptions.noImplicitAny && type.flags & TypeFlags.ContainsUndefinedOrNull) {
                 // Report implicit any error within type if possible, otherwise report error on declaration
                 if (!reportWideningErrorsInType(type)) {
                     reportImplicitAnyError(declaration, type);
@@ -5464,7 +5467,7 @@ module ts {
             var stringIndexType = getIndexType(IndexKind.String);
             var numberIndexType = getIndexType(IndexKind.Number);
             var result = createAnonymousType(node.symbol, properties, emptyArray, emptyArray, stringIndexType, numberIndexType);
-            result.flags |= TypeFlags.ObjectLiteral | TypeFlags.ContainsLiteral | (typeFlags & TypeFlags.ContainsUndefined);
+            result.flags |= TypeFlags.ObjectLiteral | TypeFlags.ContainsObjectLiteral | (typeFlags & TypeFlags.ContainsUndefinedOrNull);
             return result;
 
             function getIndexType(kind: IndexKind) {
diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index 474fdf30fed..ad20efcef3e 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -1266,32 +1266,32 @@ module ts {
     }
 
     export const enum TypeFlags {
-        Any                 = 0x00000001,
-        String              = 0x00000002,
-        Number              = 0x00000004,
-        Boolean             = 0x00000008,
-        Void                = 0x00000010,
-        Undefined           = 0x00000020,
-        Null                = 0x00000040,
-        Enum                = 0x00000080,  // Enum type
-        StringLiteral       = 0x00000100,  // String literal type
-        TypeParameter       = 0x00000200,  // Type parameter
-        Class               = 0x00000400,  // Class
-        Interface           = 0x00000800,  // Interface
-        Reference           = 0x00001000,  // Generic type reference
-        Tuple               = 0x00002000,  // Tuple
-        Union               = 0x00004000,  // Union
-        Anonymous           = 0x00008000,  // Anonymous
-        FromSignature       = 0x00010000,  // Created for signature assignment check
-        ObjectLiteral       = 0x00020000,  // Originates in an object literal
-        ContainsUndefined   = 0x00040000,  // Type is or contains Undefined or Null type
-        ContainsLiteral     = 0x00080000,  // Type is or contains object literal type
+        Any                     = 0x00000001,
+        String                  = 0x00000002,
+        Number                  = 0x00000004,
+        Boolean                 = 0x00000008,
+        Void                    = 0x00000010,
+        Undefined               = 0x00000020,
+        Null                    = 0x00000040,
+        Enum                    = 0x00000080,  // Enum type
+        StringLiteral           = 0x00000100,  // String literal type
+        TypeParameter           = 0x00000200,  // Type parameter
+        Class                   = 0x00000400,  // Class
+        Interface               = 0x00000800,  // Interface
+        Reference               = 0x00001000,  // Generic type reference
+        Tuple                   = 0x00002000,  // Tuple
+        Union                   = 0x00004000,  // Union
+        Anonymous               = 0x00008000,  // Anonymous
+        FromSignature           = 0x00010000,  // Created for signature assignment check
+        ObjectLiteral           = 0x00020000,  // Originates in an object literal
+        ContainsUndefinedOrNull = 0x00040000,  // Type is or contains Undefined or Null type
+        ContainsObjectLiteral   = 0x00080000,  // Type is or contains object literal type
 
         Intrinsic = Any | String | Number | Boolean | Void | Undefined | Null,
         StringLike = String | StringLiteral,
         NumberLike = Number | Enum,
         ObjectType = Class | Interface | Reference | Tuple | Anonymous,
-        RequiresWidening = ContainsUndefined | ContainsLiteral
+        RequiresWidening = ContainsUndefinedOrNull | ContainsObjectLiteral
     }
 
     // Properties common to all types