diff --git a/Jakefile.js b/Jakefile.js
index a602a2c459f..db6b5f55671 100644
--- a/Jakefile.js
+++ b/Jakefile.js
@@ -145,7 +145,8 @@ var harnessSources = harnessCoreSources.concat([
     "transpile.ts",
     "reuseProgramStructure.ts",
     "cachingInServerLSHost.ts",
-    "moduleResolution.ts"
+    "moduleResolution.ts",
+    "tsconfigParsing.ts"
 ].map(function (f) {
     return path.join(unittestsDirectory, f);
 })).concat([
diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index 84496fdbeb3..e5950db05b6 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -405,13 +405,105 @@ namespace ts {
       */
     export function parseConfigFileTextToJson(fileName: string, jsonText: string): { config?: any; error?: Diagnostic } {
         try {
-            return { config: /\S/.test(jsonText) ? JSON.parse(jsonText) : {} };
+            let jsonTextWithoutComments = removeComments(jsonText);
+            return { config: /\S/.test(jsonTextWithoutComments) ? JSON.parse(jsonTextWithoutComments) : {} };
         }
         catch (e) {
             return { error: createCompilerDiagnostic(Diagnostics.Failed_to_parse_file_0_Colon_1, fileName, e.message) };
         }
     }
 
+
+    /**
+     * Remove the comments from a json like text.
+     * Comments can be single line comments (starting with # or //) or multiline comments using / * * /
+     *
+     * This method replace comment content by whitespace rather than completely remove them to keep positions in json parsing error reporting accurate.
+     */
+    function removeComments(jsonText: string): string {
+        let result = "";
+        let processingString = false;
+        let processingSingleLineComment = false;
+        let processingMultiLineComment = false;
+        for (let i = 0; i < jsonText.length; i++) {
+            let currentChar = jsonText.charAt(i);
+            let nextChar = (i + 1 < jsonText.length) ? jsonText.charAt(i + 1) : undefined;
+            if (processingString) {
+                if (currentChar === "\\"
+                    && nextChar === "\"") {
+                    // Escaped quote consume the 2 characters
+                    result += currentChar;
+                    result += nextChar;
+                    i += 1;
+                }
+                else if (currentChar === "\"") {
+                    // End of string
+                    result += currentChar;
+                    processingString = false;
+                }
+                else {
+                   // String content
+                   result += currentChar;
+                }
+            }
+            else if (processingSingleLineComment) {
+                if (currentChar === "\n") {
+                    // End of single line comment
+                    processingSingleLineComment = false;
+                    // Keep the line breaks to keep line numbers aligned
+                    result += currentChar;
+                }
+                else {
+                   // replace comment content by whitespaces
+                   result += " ";
+                }
+            }
+            else if (processingMultiLineComment) {
+                if (currentChar === "*" && nextChar === "/") {
+                    // End of comment
+                    result += "  ";
+                    i += 1;
+                    processingMultiLineComment = false;
+                }
+                else if (currentChar === "\n") {
+                    // Keep the line breaks to Keep line aligned
+                    result += currentChar;
+                }
+                else {
+                   // replace comment content by whitespaces
+                   result += " ";
+                }
+            }
+            else if (currentChar === "\"") {
+                // String start
+                result += currentChar;
+                processingString = true;
+            }
+            else if (currentChar === "#") {
+                // Start of # comment
+                result += " ";
+                processingSingleLineComment = true;
+            }
+            else if (currentChar === "/" && nextChar === "/") {
+                // Start of // comment
+                result += "  ";
+                i += 1;
+                processingSingleLineComment = true;
+            }
+            else if (currentChar === "/" && nextChar === "*") {
+                // Start of /**/ comment
+                result += "  ";
+                i += 1;
+                processingMultiLineComment = true;
+            }
+            else {
+                // Keep other characters
+                result += currentChar;
+            }
+        }
+        return result;
+    }
+
     /**
       * Parse the contents of a config file (tsconfig.json).
       * @param json The contents of the config file to parse
diff --git a/tests/cases/unittests/tsconfigParsing.ts b/tests/cases/unittests/tsconfigParsing.ts
new file mode 100644
index 00000000000..3da1acb83c3
--- /dev/null
+++ b/tests/cases/unittests/tsconfigParsing.ts
@@ -0,0 +1,84 @@
+/// <reference path="..\..\..\src\harness\harness.ts" />
+/// <reference path="..\..\..\src\compiler\commandLineParser.ts" />
+
+module ts {
+  describe('parseConfigFileTextToJson', () => {
+    function assertParseResult(jsonText: string, expectedConfigObject: { config?: any; error?: Diagnostic }) {
+      let parsed = ts.parseConfigFileTextToJson("/apath/tsconfig.json", jsonText);
+      assert.equal(JSON.stringify(parsed), JSON.stringify(expectedConfigObject));
+    }
+    
+    function assertParseError(jsonText: string) {     
+       let parsed = ts.parseConfigFileTextToJson("/apath/tsconfig.json", jsonText);
+       assert.isTrue(undefined === parsed.config);    
+       assert.isTrue(undefined !== parsed.error);     
+    }
+
+    it("returns empty config for file with only whitespaces", () => {
+    	assertParseResult("", { config : {} });
+      assertParseResult(" ", { config : {} });
+    });
+    
+    it("returns empty config for file with comments only", () => {
+      assertParseResult("// Comment", { config: {} });
+      assertParseResult("# Comment", { config: {} });
+      assertParseResult("/* Comment*/", { config: {} });
+    });
+
+    it("returns empty config when config is empty object", () => {
+      assertParseResult("{}", { config: {} });
+    });
+
+    it("returns config object without comments", () => {
+      assertParseResult(
+      	`{ // Excluded files
+      		"exclude": [
+  					// Exclude d.ts
+  					"file.d.ts"
+  				]
+      	}`, { config: { exclude: ["file.d.ts"] } });
+      assertParseResult(
+        `{
+      		# Excluded files
+      		"exclude": [
+  					# Exclude d.ts
+  					"file.d.ts"
+  				]
+      	}`, { config: { exclude: ["file.d.ts"] } });
+      assertParseResult(
+        `{
+      		/* Excluded
+      			 Files
+      		*/
+      		"exclude": [  		
+  					/* multiline comments can be in the middle of a line */"file.d.ts"
+  				]
+      	}`, { config: { exclude: ["file.d.ts"] } });
+    });
+
+    it("keeps string content untouched", () => {
+      assertParseResult(
+        `{
+      		"exclude": [
+  					"xx//file.d.ts"
+  				]
+      	}`, { config: { exclude: ["xx//file.d.ts"] } });
+      assertParseResult(
+        `{
+      		"exclude": [
+  					"xx#file.d.ts"
+  				]
+      	}`, { config: { exclude: ["xx#file.d.ts"] } });
+      assertParseResult(
+        `{
+      		"exclude": [
+  					"xx/*file.d.ts*/"
+  				]
+      	}`, { config: { exclude: ["xx/*file.d.ts*/"] } });
+    });
+    
+    it("returns object with error when json is invalid", () => {
+       assertParseError("invalid");      
+    });
+  });
+}