diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index 6f4ab914345..99f60ac5ca2 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -454,9 +454,10 @@ namespace ts.server {
             }
         }
 
-        watchedConfigFileChanged(configFileName: string) {
-            this.log("Config File Changed: " + configFileName);
-            this.updateConfigFile(configFileName);
+        watchedProjectConfigFileChanged(project: Project) {
+            this.log("Config File Changed: " + project.projectFilename);
+            this.updateConfiguredProject(project);
+            this.updateProjectStructure();
         }
 
         log(msg: string, type = "Err") {
@@ -536,16 +537,14 @@ namespace ts.server {
             this.configuredProjects = configuredProjects;
         }
         
-        removeConfiguredProject(configFilename: string) {
-            let matchedProjects =  this.configuredProjects.filter( project => project.projectFilename == configFilename );
-            if (matchedProjects.length > 0) {
-                let projectToRemove = matchedProjects[0];
-                projectToRemove.projectFileWatcher.close();
-                
-                let filenames = projectToRemove.getFileNameList();
-                filenames.forEach(filename => this.closeOpenFile(this.getScriptInfo(filename)));
-                filenames.forEach(filename => this.openClientFile(filename));                
-            }
+        removeConfiguredProject(project: Project) {
+                project.projectFileWatcher.close();
+                this.configuredProjects = copyListRemovingItem(project, this.configuredProjects);
+
+                let fileNames = project.getFileNameList();
+                for (let fileName of fileNames) {
+                    this.getScriptInfo(fileName).defaultProject = undefined;
+                }
         }
 
         setConfiguredProjectRoot(info: ScriptInfo) {
@@ -692,12 +691,25 @@ namespace ts.server {
         updateProjectStructure() {
             this.log("updating project structure from ...", "Info");
             this.printProjects();
+            
+            let openFileRootsConfigured: ScriptInfo[];
+            for (let info of this.openFileRootsConfigured) {
+                let configFileName = info.defaultProject.projectFilename;
+                let project = this.findConfiguredProjectByConfigFile(configFileName);
+                if (!project || !(project.getSourceFile(info))) {
+                    info.defaultProject = undefined;
+                    this.createInferredProject(info);
+                }
+                else {
+                    openFileRootsConfigured.push(info);
+                }
+            }
+            this.openFileRootsConfigured = openFileRootsConfigured;
 
             // First loop through all open files that are referenced by projects but are not
             // project roots.  For each referenced file, see if the default project still
             // references that file.  If so, then just keep the file in the referenced list.
             // If not, add the file to an unattached list, to be rechecked later.
-
             var openFilesReferenced: ScriptInfo[] = [];
             var unattachedOpenFiles: ScriptInfo[] = [];
 
@@ -810,11 +822,18 @@ namespace ts.server {
          * Open file whose contents is managed by the client
          * @param filename is absolute pathname
          */
-
         openClientFile(fileName: string) {
-            var searchPath = ts.normalizePath(getDirectoryPath(fileName));
+            this.openOrUpdateConfiguredProjectForFile(fileName);
+            var info = this.openFile(fileName, true);
+            this.addOpenFile(info);
+            this.printProjects();
+            return info;
+        }
+        
+        openOrUpdateConfiguredProjectForFile(fileName: string) {
+            let searchPath = ts.normalizePath(getDirectoryPath(fileName));
             this.log("Search path: " + searchPath,"Info");
-            var configFileName = this.findConfigFile(searchPath);
+            let configFileName = this.findConfigFile(searchPath);
             if (configFileName) {
                 this.log("Config file name: " + configFileName, "Info");
             } else {
@@ -823,20 +842,22 @@ namespace ts.server {
             if (configFileName) {
                 configFileName = getAbsolutePath(configFileName, searchPath);
             }
-            if (configFileName && (!this.configProjectIsActive(configFileName))) {
-                var configResult = this.openConfigFile(configFileName, fileName);
-                if (!configResult.success) {
-                    this.log("Error opening config file " + configFileName + " " + configResult.errorMsg);
+            if (configFileName) {
+                let project = this.findConfiguredProjectByConfigFile(configFileName);
+                if (!project) {
+                    var configResult = this.openConfigFile(configFileName, fileName);
+                    if (!configResult.success) {
+                        this.log("Error opening config file " + configFileName + " " + configResult.errorMsg);
+                    }
+                    else {
+                        this.log("Opened configuration file " + configFileName,"Info");
+                        this.configuredProjects.push(configResult.project);
+                    }
                 }
                 else {
-                    this.log("Opened configuration file " + configFileName,"Info");
-                    this.configuredProjects.push(configResult.project);
+                    this.updateConfiguredProject(project);
                 }
             }
-            var info = this.openFile(fileName, true);
-            this.addOpenFile(info);
-            this.printProjects();
-            return info;
         }
 
         /**
@@ -915,12 +936,16 @@ namespace ts.server {
         }
 
         configProjectIsActive(fileName: string) {
+            return this.findConfiguredProjectByConfigFile(fileName) === undefined;
+        }
+
+        findConfiguredProjectByConfigFile(configFileName: string) {
             for (var i = 0, len = this.configuredProjects.length; i < len; i++) {
-                if (this.configuredProjects[i].projectFilename == fileName) {
-                    return true;
+                if (this.configuredProjects[i].projectFilename == configFileName) {
+                    return this.configuredProjects[i];
                 }
             }
-            return false;
+            return undefined;
         }
 
         configFileToProjectOptions(configFilename: string): { succeeded: boolean, projectOptions?: ProjectOptions, error?: ProjectOpenResult } {
@@ -968,30 +993,25 @@ namespace ts.server {
                     }
                 }
                 proj.finishGraph();
-                proj.projectFileWatcher = this.host.watchFile(configFilename, _ => this.watchedConfigFileChanged(configFilename));
+                proj.projectFileWatcher = this.host.watchFile(configFilename, _ => this.watchedProjectConfigFileChanged(proj));
                 return { success: true, project: proj };
             }
         }
         
-        updateConfigFile(configFilename: string): ProjectOpenResult {
-            let matchedProjects = this.configuredProjects.filter(project => project.projectFilename == configFilename);
-            if (matchedProjects !== null) {
-                let matchedProject = matchedProjects[0];
-                // if the config file is deleted, remove the project and update project structure
-                if (!this.host.fileExists(configFilename)) {
-                    this.log("Config file deleted");
-                    this.removeConfiguredProject(configFilename);
+        updateConfiguredProject(project: Project) {
+            if (!this.host.fileExists(project.projectFilename)) {
+                this.log("Config file deleted");
+                this.removeConfiguredProject(project);
+            }
+            else {
+                let { succeeded, projectOptions, error } = this.configFileToProjectOptions(project.projectFilename);
+                if (!succeeded) {
+                    return error;
                 }
                 else {
-                    let { succeeded, projectOptions, error } = this.configFileToProjectOptions(configFilename);
-                    if (!succeeded) {
-                        return error;
-                    }
-                    else {
-                        matchedProject.setProjectOptions(projectOptions);
-                    }
+                    project.setProjectOptions(projectOptions);
+                    project.finishGraph();
                 }
-                this.updateProjectStructure();
             }
         }