diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index ceb4e5fb033..5217674d309 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -221,19 +221,9 @@ namespace ts {
 
         host = host || createCompilerHost(options);
         
-        // initialize resolveModuleNameWorker only if noResolve is false
-        let resolveModuleNamesWorker: (moduleNames: string[], containingFile: string) => string[];
-        if (!options.noResolve) {
-            resolveModuleNamesWorker = host.resolveModuleNames;
-            if (!resolveModuleNamesWorker) {
-                resolveModuleNamesWorker = (moduleNames, containingFile) => {
-                    return map(moduleNames, moduleName => {
-                        let moduleResolution = resolveModuleName(moduleName, containingFile, options, host);
-                        return moduleResolution.resolvedFileName;
-                    });
-                }
-            }
-        }
+        const resolveModuleNamesWorker =
+            host.resolveModuleNames || 
+            ((moduleNames, containingFile) => map(moduleNames, moduleName => resolveModuleName(moduleName, containingFile, options, host).resolvedFileName));
 
         let filesByName = createFileMap<SourceFile>(fileName => host.getCanonicalFileName(fileName));
         
@@ -670,12 +660,15 @@ namespace ts {
 
                     // Set the source file for normalized absolute path
                     filesByName.set(canonicalAbsolutePath, file);
-
+                    
+                    let basePath = getDirectoryPath(fileName);
                     if (!options.noResolve) {
-                        let basePath = getDirectoryPath(fileName);
                         processReferencedFiles(file, basePath);
-                        processImportedModules(file, basePath);
                     }
+
+                    // always process imported modules to record module name resolutions
+                    processImportedModules(file, basePath);
+
                     if (isDefaultLib) {
                         file.isDefaultLib = true;
                         files.unshift(file);
@@ -714,20 +707,18 @@ namespace ts {
         }
        
         function processImportedModules(file: SourceFile, basePath: string) {            
-            collectExternalModuleReferences(file);            
+            collectExternalModuleReferences(file);                        
             if (file.imports.length) {               
-                file.resolvedModules = {};
-                let oldSourceFile = oldProgram && oldProgram.getSourceFile(file.fileName);
-                
+                file.resolvedModules = {};                
                 let moduleNames = map(file.imports, name => name.text);
                 let resolutions = resolveModuleNamesWorker(moduleNames, file.fileName);
                 for (let i = 0; i < file.imports.length; ++i) {
                     let resolution = resolutions[i];
                     setResolvedModuleName(file, moduleNames[i], resolution);
-                    if (resolution) {
+                    if (resolution && !options.noResolve) {
                         findModuleSourceFile(resolution, file.imports[i]);
                     }
-                }                
+                }
             }
             else {
                 // no imports - drop cached module resolutions
diff --git a/src/services/services.ts b/src/services/services.ts
index eb275120b89..89052356447 100644
--- a/src/services/services.ts
+++ b/src/services/services.ts
@@ -1842,9 +1842,8 @@ namespace ts {
             getCanonicalFileName: fileName => fileName,
             getCurrentDirectory: () => "",
             getNewLine: () => newLine,
-            // these two methods should never be called in transpile scenarios since 'noResolve' is set to 'true'
-            fileExists: (fileName): boolean => { throw new Error("Should never be called."); },
-            readFile: (fileName): string => { throw new Error("Should never be called."); }
+            fileExists: (fileName): boolean => fileName === inputFileName,
+            readFile: (fileName): string => ""
         };
 
         let program = createProgram([inputFileName], options, compilerHost);