diff --git a/Jakefile.js b/Jakefile.js
index a602a2c459f02..db6b5f5567105 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 84496fdbeb313..aaf3bf624b691 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -405,13 +405,41 @@ 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 output = "";
+        let scanner = createScanner(ScriptTarget.ES5, /* skipTrivia */ false, LanguageVariant.Standard, jsonText);
+        let token: SyntaxKind;
+        while ((token = scanner.scan()) !== SyntaxKind.EndOfFileToken) {
+            switch (token) {
+                case SyntaxKind.SingleLineCommentTrivia:
+                case SyntaxKind.MultiLineCommentTrivia:
+                    // replace comments with whitespace to preserve original character positions
+                    output += scanner.getTokenText().replace(/\S/g, " ");
+                    break;
+                default:
+                    output += scanner.getTokenText();
+                    break;
+            }
+        }
+        return output;
+    }
+
+
     /**
       * 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 0000000000000..3603d22f31457
--- /dev/null
+++ b/tests/cases/unittests/tsconfigParsing.ts
@@ -0,0 +1,86 @@
+/// <reference path="..\..\..\src\harness\harness.ts" />
+/// <reference path="..\..\..\src\compiler\commandLineParser.ts" />
+
+namespace 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: {} });
+        });
+
+        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": [
+                        /* 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*/"] } });
+        });
+
+        it("handles escaped characters in strings correctly", () => {
+            assertParseResult(
+                `{
+                    "exclude": [
+                        "xx\\"//files"
+                    ]
+                }`, { config: { exclude: ["xx\"//files"] } });
+
+            assertParseResult(
+                `{
+                    "exclude": [
+                        "xx\\\\" // end of line comment
+                    ]
+                }`, { config: { exclude: ["xx\\"] } });
+         });
+
+        it("returns object with error when json is invalid", () => {
+             assertParseError("invalid");
+        });
+    });
+}