diff --git a/src/compiler/parser.ts b/src/compiler/parser.ts
index cfe27e7e7c3..a3eedb29c61 100644
--- a/src/compiler/parser.ts
+++ b/src/compiler/parser.ts
@@ -1267,14 +1267,25 @@ module ts {
             return finishNode(node);
         }
 
-        function parseSignature(kind: SyntaxKind, returnToken: SyntaxKind): ParsedSignature {
+        function parseSignature(kind: SyntaxKind, returnToken: SyntaxKind, returnTokenRequired: boolean): ParsedSignature {
             if (kind === SyntaxKind.ConstructSignature) {
                 parseExpected(SyntaxKind.NewKeyword);
             }
             var typeParameters = parseTypeParameters();
             var parameters = parseParameterList(SyntaxKind.OpenParenToken, SyntaxKind.CloseParenToken);
             checkParameterList(parameters);
-            var type = parseOptional(returnToken) ? parseType() : undefined;
+
+            var type: TypeNode;
+
+            if (returnTokenRequired) {
+                parseExpected(returnToken);
+                type = parseType();
+            }
+            else if (parseOptional(returnToken)) 
+            {
+                type = parseType();
+            }
+
             return {
                 typeParameters: typeParameters,
                 parameters: parameters,
@@ -1338,7 +1349,7 @@ module ts {
 
         function parseSignatureMember(kind: SyntaxKind, returnToken: SyntaxKind): SignatureDeclaration {
             var node = <SignatureDeclaration>createNode(kind);
-            var sig = parseSignature(kind, returnToken);
+            var sig = parseSignature(kind, returnToken, /* returnTokenRequired */ false);
             node.typeParameters = sig.typeParameters;
             node.parameters = sig.parameters;
             node.type = sig.type;
@@ -1411,7 +1422,7 @@ module ts {
             }
             if (token === SyntaxKind.OpenParenToken || token === SyntaxKind.LessThanToken) {
                 node.kind = SyntaxKind.Method;
-                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
                 (<MethodDeclaration>node).typeParameters = sig.typeParameters;
                 (<MethodDeclaration>node).parameters = sig.parameters;
                 (<MethodDeclaration>node).type = sig.type;
@@ -1472,7 +1483,7 @@ module ts {
         function parseFunctionType(signatureKind: SyntaxKind): TypeLiteralNode {
             var node = <TypeLiteralNode>createNode(SyntaxKind.TypeLiteral);
             var member = <SignatureDeclaration>createNode(signatureKind);
-            var sig = parseSignature(signatureKind, SyntaxKind.EqualsGreaterThanToken);
+            var sig = parseSignature(signatureKind, SyntaxKind.EqualsGreaterThanToken, /* returnTokenRequired */ true);
             member.typeParameters = sig.typeParameters;
             member.parameters = sig.parameters;
             member.type = sig.type;
@@ -1728,7 +1739,7 @@ module ts {
             var pos = getNodePos();
 
             if (triState === Tristate.True) {
-                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
 
                 // If we have an arrow, then try to parse the body.
                 // Even if not, try to parse if we have an opening brace, just in case we're in an error state.
@@ -1831,7 +1842,7 @@ module ts {
 
         function tryParseSignatureIfArrowOrBraceFollows(): ParsedSignature {
             return tryParse(() => {
-                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
 
                 // Parsing a signature isn't enough.
                 // Parenthesized arrow signatures often look like other valid expressions.
@@ -2173,7 +2184,7 @@ module ts {
             var node = <PropertyDeclaration>createNode(SyntaxKind.PropertyAssignment);
             node.name = parsePropertyName();
             if (token === SyntaxKind.OpenParenToken || token === SyntaxKind.LessThanToken) {
-                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
                 var body = parseBody(/* ignoreMissingOpenBrace */ false);
                 // do not propagate property name as name for function expression
                 // for scenarios like 
@@ -2273,7 +2284,7 @@ module ts {
             var pos = getNodePos();
             parseExpected(SyntaxKind.FunctionKeyword);
             var name = isIdentifier() ? parseIdentifier() : undefined;
-            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
             var body = parseBody(/* ignoreMissingOpenBrace */ false);
             if (name && isInStrictMode && isEvalOrArgumentsIdentifier(name)) {
                 // It is a SyntaxError to use within strict mode code the identifiers eval or arguments as the 
@@ -2888,7 +2899,7 @@ module ts {
             if (flags) node.flags = flags;
             parseExpected(SyntaxKind.FunctionKeyword);
             node.name = parseIdentifier();
-            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
             node.typeParameters = sig.typeParameters;
             node.parameters = sig.parameters;
             node.type = sig.type;
@@ -2905,7 +2916,7 @@ module ts {
             var node = <ConstructorDeclaration>createNode(SyntaxKind.Constructor, pos);
             node.flags = flags;
             parseExpected(SyntaxKind.ConstructorKeyword);
-            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
             node.typeParameters = sig.typeParameters;
             node.parameters = sig.parameters;
             node.type = sig.type;
@@ -2932,7 +2943,7 @@ module ts {
                 var method = <MethodDeclaration>createNode(SyntaxKind.Method, pos);
                 method.flags = flags;
                 method.name = name;
-                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+                var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
                 method.typeParameters = sig.typeParameters;
                 method.parameters = sig.parameters;
                 method.type = sig.type;
@@ -3005,7 +3016,7 @@ module ts {
             var node = <MethodDeclaration>createNode(kind, pos);
             node.flags = flags;
             node.name = parsePropertyName();
-            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken);
+            var sig = parseSignature(SyntaxKind.CallSignature, SyntaxKind.ColonToken, /* returnTokenRequired */ false);
             node.typeParameters = sig.typeParameters;
             node.parameters = sig.parameters;
             node.type = sig.type;
diff --git a/tests/baselines/reference/functionTypesLackingReturnTypes.errors.txt b/tests/baselines/reference/functionTypesLackingReturnTypes.errors.txt
new file mode 100644
index 00000000000..289f5d11d43
--- /dev/null
+++ b/tests/baselines/reference/functionTypesLackingReturnTypes.errors.txt
@@ -0,0 +1,18 @@
+==== tests/cases/compiler/functionTypesLackingReturnTypes.ts (2 errors) ====
+    
+    // Error (no '=>')
+    function f(x: ()) {
+                    ~
+!!! '=>' expected.
+    }
+    
+    // Error (no '=>')
+    var g: (param);
+                  ~
+!!! '=>' expected.
+    
+    // Okay
+    var h: { () }
+    
+    // Okay
+    var i: { new () }
\ No newline at end of file
diff --git a/tests/cases/compiler/functionTypesLackingReturnTypes.ts b/tests/cases/compiler/functionTypesLackingReturnTypes.ts
new file mode 100644
index 00000000000..f1dac471287
--- /dev/null
+++ b/tests/cases/compiler/functionTypesLackingReturnTypes.ts
@@ -0,0 +1,13 @@
+
+// Error (no '=>')
+function f(x: ()) {
+}
+
+// Error (no '=>')
+var g: (param);
+
+// Okay
+var h: { () }
+
+// Okay
+var i: { new () }
\ No newline at end of file