diff --git a/Jakefile.js b/Jakefile.js
index d11951d9da764..ea13cce6685f8 100644
--- a/Jakefile.js
+++ b/Jakefile.js
@@ -143,7 +143,8 @@ var harnessSources = harnessCoreSources.concat([
     "convertToBase64.ts",
     "transpile.ts",
     "reuseProgramStructure.ts",
-    "cachingInServerLSHost.ts"
+    "cachingInServerLSHost.ts",
+    "moduleResolution.ts"
 ].map(function (f) {
     return path.join(unittestsDirectory, f);
 })).concat([
diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index 9fa05a5d43e76..7a7ba34da87eb 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -225,7 +225,16 @@ namespace ts {
             type: "boolean",
             experimental: true,
             description: Diagnostics.Enables_experimental_support_for_emitting_type_metadata_for_decorators
-        }
+        },
+        {
+            name: "moduleResolution",
+            type: {
+                "node": ModuleResolutionKind.NodeJs,
+                "classic": ModuleResolutionKind.Classic
+            },
+            experimental: true,
+            description: Diagnostics.Specifies_module_resolution_strategy_Colon_node_Node_or_classic_TypeScript_pre_1_6
+        }        
     ];
 
     export function parseCommandLine(commandLine: string[]): ParsedCommandLine {
diff --git a/src/compiler/diagnosticInformationMap.generated.ts b/src/compiler/diagnosticInformationMap.generated.ts
index df3693fd99c22..76c68b4c3b4b0 100644
--- a/src/compiler/diagnosticInformationMap.generated.ts
+++ b/src/compiler/diagnosticInformationMap.generated.ts
@@ -565,6 +565,7 @@ namespace ts {
         Enables_experimental_support_for_emitting_type_metadata_for_decorators: { code: 6066, category: DiagnosticCategory.Message, key: "Enables experimental support for emitting type metadata for decorators." },
         Option_experimentalAsyncFunctions_cannot_be_specified_when_targeting_ES5_or_lower: { code: 6067, category: DiagnosticCategory.Message, key: "Option 'experimentalAsyncFunctions' cannot be specified when targeting ES5 or lower." },
         Enables_experimental_support_for_ES7_async_functions: { code: 6068, category: DiagnosticCategory.Message, key: "Enables experimental support for ES7 async functions." },
+        Specifies_module_resolution_strategy_Colon_node_Node_or_classic_TypeScript_pre_1_6: { code: 6069, category: DiagnosticCategory.Message, key: "Specifies module resolution strategy: 'node' (Node) or 'classic' (TypeScript pre 1.6) ." },
         Variable_0_implicitly_has_an_1_type: { code: 7005, category: DiagnosticCategory.Error, key: "Variable '{0}' implicitly has an '{1}' type." },
         Parameter_0_implicitly_has_an_1_type: { code: 7006, category: DiagnosticCategory.Error, key: "Parameter '{0}' implicitly has an '{1}' type." },
         Member_0_implicitly_has_an_1_type: { code: 7008, category: DiagnosticCategory.Error, key: "Member '{0}' implicitly has an '{1}' type." },
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index f17ceb9675865..8113722ff3c77 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -2250,7 +2250,11 @@
         "category": "Message",
         "code": 6068
     },
-  
+    "Specifies module resolution strategy: 'node' (Node) or 'classic' (TypeScript pre 1.6) .": {
+        "category": "Message",
+        "code": 6069
+    },
+
     "Variable '{0}' implicitly has an '{1}' type.": {
         "category": "Error",
         "code": 7005
diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index a4cf5febd6317..fb35e63149bca 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -36,11 +36,150 @@ namespace ts {
     }
     
     export function resolveModuleName(moduleName: string, containingFile: string, compilerOptions: CompilerOptions, host: ModuleResolutionHost): ResolvedModule {
-        // TODO: use different resolution strategy based on compiler options
-        return legacyNameResolver(moduleName, containingFile, compilerOptions, host);
+        let moduleResolution = compilerOptions.moduleResolution !== undefined 
+            ? compilerOptions.moduleResolution
+            : compilerOptions.module === ModuleKind.CommonJS ? ModuleResolutionKind.NodeJs : ModuleResolutionKind.Classic;
+            
+        switch (moduleResolution) {
+            case ModuleResolutionKind.NodeJs: return nodeModuleNameResolver(moduleName, containingFile, host);
+            case ModuleResolutionKind.Classic: return classicNameResolver(moduleName, containingFile, compilerOptions, host);
+        }
+    }
+    
+    export function nodeModuleNameResolver(moduleName: string, containingFile: string, host: ModuleResolutionHost): ResolvedModule {
+        let containingDirectory = getDirectoryPath(containingFile);        
+
+        if (getRootLength(moduleName) !== 0 || nameStartsWithDotSlashOrDotDotSlash(moduleName)) {
+            let failedLookupLocations: string[] = [];
+            let candidate = normalizePath(combinePaths(containingDirectory, moduleName));
+            let resolvedFileName = loadNodeModuleFromFile(candidate, /* loadOnlyDts */ false, failedLookupLocations, host);
+            
+            if (resolvedFileName) {
+                return { resolvedFileName, failedLookupLocations };
+            }
+            
+            resolvedFileName = loadNodeModuleFromDirectory(candidate, /* loadOnlyDts */ false, failedLookupLocations, host);
+            return { resolvedFileName, failedLookupLocations };
+        }
+        else {
+            return loadModuleFromNodeModules(moduleName, containingDirectory, host);
+        }
+    }
+    
+    function loadNodeModuleFromFile(candidate: string, loadOnlyDts: boolean, failedLookupLocation: string[], host: ModuleResolutionHost): string {
+        if (loadOnlyDts) {
+            return tryLoad(".d.ts");
+        }
+        else {
+            return forEach(supportedExtensions, tryLoad);
+        }
+        
+        function tryLoad(ext: string): string {
+            let fileName = fileExtensionIs(candidate, ext) ? candidate : candidate + ext;
+            if (host.fileExists(fileName)) {
+                return fileName;
+            }
+            else {
+                failedLookupLocation.push(fileName);
+                return undefined;
+            }
+        }
+    }
+    
+    function loadNodeModuleFromDirectory(candidate: string, loadOnlyDts: boolean, failedLookupLocation: string[], host: ModuleResolutionHost): string {
+        let packageJsonPath = combinePaths(candidate, "package.json");
+        if (host.fileExists(packageJsonPath)) {
+            
+            let jsonContent: { typings?: string };
+            
+            try {
+                let jsonText = host.readFile(packageJsonPath);
+                jsonContent = jsonText ? <{ typings?: string }>JSON.parse(jsonText) : { typings: undefined };
+            }
+            catch (e) {
+                // gracefully handle if readFile fails or returns not JSON 
+                jsonContent = { typings: undefined };
+            }
+            
+            if (jsonContent.typings) {
+                let result = loadNodeModuleFromFile(normalizePath(combinePaths(candidate, jsonContent.typings)), loadOnlyDts, failedLookupLocation, host);
+                if (result) {
+                    return result;
+                }
+            }
+        }
+        else {
+            // record package json as one of failed lookup locations - in the future if this file will appear it will invalidate resolution results
+            failedLookupLocation.push(packageJsonPath);
+        }
+        
+        return loadNodeModuleFromFile(combinePaths(candidate, "index"), loadOnlyDts, failedLookupLocation, host);
+    }
+    
+    function loadModuleFromNodeModules(moduleName: string, directory: string, host: ModuleResolutionHost): ResolvedModule {
+        let failedLookupLocations: string[] = []; 
+        directory = normalizeSlashes(directory);
+        while (true) {
+            let baseName = getBaseFileName(directory);
+            if (baseName !== "node_modules") {
+                let nodeModulesFolder = combinePaths(directory, "node_modules");
+                let candidate = normalizePath(combinePaths(nodeModulesFolder, moduleName));
+                let result = loadNodeModuleFromFile(candidate, /* loadOnlyDts */ true, failedLookupLocations, host);
+                if (result) {
+                    return { resolvedFileName: result, failedLookupLocations };
+                }
+                
+                result = loadNodeModuleFromDirectory(candidate, /* loadOnlyDts */ true, failedLookupLocations, host);
+                if (result) {
+                    return { resolvedFileName: result, failedLookupLocations };
+                }
+            }
+            
+            let parentPath = getDirectoryPath(directory);
+            if (parentPath === directory) {
+                break;
+            }
+            
+            directory = parentPath;
+        }
+        
+        return { resolvedFileName: undefined, failedLookupLocations };
+    }
+    
+    export function baseUrlModuleNameResolver(moduleName: string, containingFile: string, baseUrl: string, host: ModuleResolutionHost): ResolvedModule {
+        Debug.assert(baseUrl !== undefined);
+        
+        let normalizedModuleName = normalizeSlashes(moduleName);         
+        let basePart = useBaseUrl(moduleName) ? baseUrl : getDirectoryPath(containingFile);        
+        let candidate = normalizePath(combinePaths(basePart, moduleName));
+        
+        let failedLookupLocations: string[] = [];
+        
+        return forEach(supportedExtensions, ext => tryLoadFile(candidate + ext)) || { resolvedFileName: undefined, failedLookupLocations }; 
+        
+        function tryLoadFile(location: string): ResolvedModule {
+            if (host.fileExists(location)) {
+                return { resolvedFileName: location, failedLookupLocations }; 
+            }
+            else {
+                failedLookupLocations.push(location);
+                return undefined;
+            }
+        }
+    }
+    
+    function nameStartsWithDotSlashOrDotDotSlash(name: string) {
+        let i = name.lastIndexOf("./", 1);
+        return i === 0 || (i === 1 && name.charCodeAt(0) === CharacterCodes.dot);
+    }
+    
+    function useBaseUrl(moduleName: string): boolean {
+        // path is not rooted
+        // module name does not start with './' or '../'
+        return getRootLength(moduleName) === 0 && !nameStartsWithDotSlashOrDotDotSlash(moduleName);
     }
 
-    function legacyNameResolver(moduleName: string, containingFile: string, compilerOptions: CompilerOptions, host: ModuleResolutionHost): ResolvedModule {
+    export function classicNameResolver(moduleName: string, containingFile: string, compilerOptions: CompilerOptions, host: ModuleResolutionHost): ResolvedModule {
         
         // module names that contain '!' are used to reference resources and are not resolved to actual files on disk
         if (moduleName.indexOf('!') != -1) {
diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index 91fcbb3478f44..e1204f91aca09 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -2009,7 +2009,12 @@ namespace ts {
         Error,
         Message,
     }
-
+    
+    export const enum ModuleResolutionKind {
+        Classic  = 1,
+        NodeJs  = 2
+    }
+    
     export interface CompilerOptions {
         allowNonTsExtensions?: boolean;
         charset?: string;
@@ -2049,6 +2054,7 @@ namespace ts {
         experimentalDecorators?: boolean;
         experimentalAsyncFunctions?: boolean;
         emitDecoratorMetadata?: boolean;
+        moduleResolution?: ModuleResolutionKind
         /* @internal */ stripInternal?: boolean;
 
         // Skip checking lib.d.ts to help speed up tests.
diff --git a/src/harness/harness.ts b/src/harness/harness.ts
index db026628e08cf..de67594885179 100644
--- a/src/harness/harness.ts
+++ b/src/harness/harness.ts
@@ -1049,6 +1049,13 @@ module Harness {
                                     options.module = ts.ModuleKind.UMD;
                                 } else if (setting.value.toLowerCase() === "commonjs") {
                                     options.module = ts.ModuleKind.CommonJS;
+                                    if (options.moduleResolution === undefined) {
+                                        // TODO: currently we have relative module names pretty much in all tests that use CommonJS module target.
+                                        // Such names could never be resolved in Node however classic resolution strategy still can handle them.
+                                        // Changing all module names to relative will be a major overhaul in code (but we'll do this anyway) so  as a temporary measure 
+                                        // we'll use ts.ModuleResolutionKind.Classic for CommonJS modules.
+                                        options.moduleResolution = ts.ModuleResolutionKind.Classic;
+                                    }
                                 } else if (setting.value.toLowerCase() === "system") {
                                     options.module = ts.ModuleKind.System;
                                 } else if (setting.value.toLowerCase() === "unspecified") {
@@ -1060,7 +1067,16 @@ module Harness {
                                 options.module = <any>setting.value;
                             }
                             break;
-
+                        case "moduleresolution":
+                            switch((setting.value || "").toLowerCase()) {
+                                case "classic": 
+                                    options.moduleResolution = ts.ModuleResolutionKind.Classic;
+                                    break;
+                                case "node": 
+                                    options.moduleResolution = ts.ModuleResolutionKind.NodeJs;
+                                    break;
+                            }
+                            break;
                         case "target":
                         case "codegentarget":
                             if (typeof setting.value === "string") {
diff --git a/src/harness/projectsRunner.ts b/src/harness/projectsRunner.ts
index 94d45e8306148..fe4ab8ea8ea4f 100644
--- a/src/harness/projectsRunner.ts
+++ b/src/harness/projectsRunner.ts
@@ -163,6 +163,7 @@ class ProjectRunner extends RunnerBase {
                     mapRoot: testCase.resolveMapRoot && testCase.mapRoot ? Harness.IO.resolvePath(testCase.mapRoot) : testCase.mapRoot,
                     sourceRoot: testCase.resolveSourceRoot && testCase.sourceRoot ? Harness.IO.resolvePath(testCase.sourceRoot) : testCase.sourceRoot,
                     module: moduleKind,
+                    moduleResolution: ts.ModuleResolutionKind.Classic, // currently all tests use classic module resolution kind, this will change in the future 
                     noResolve: testCase.noResolve,
                     rootDir: testCase.rootDir
                 };
diff --git a/tests/baselines/reference/nodeResolution1.js b/tests/baselines/reference/nodeResolution1.js
new file mode 100644
index 0000000000000..3516342e3b22f
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution1.js
@@ -0,0 +1,12 @@
+//// [tests/cases/compiler/nodeResolution1.ts] ////
+
+//// [a.ts]
+
+export var x = 1;
+
+//// [b.ts]
+import y = require("./a");
+
+//// [a.js]
+exports.x = 1;
+//// [b.js]
diff --git a/tests/baselines/reference/nodeResolution1.symbols b/tests/baselines/reference/nodeResolution1.symbols
new file mode 100644
index 0000000000000..0cc98206e90fb
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution1.symbols
@@ -0,0 +1,9 @@
+=== tests/cases/compiler/b.ts ===
+import y = require("./a");
+>y : Symbol(y, Decl(b.ts, 0, 0))
+
+=== tests/cases/compiler/a.ts ===
+
+export var x = 1;
+>x : Symbol(x, Decl(a.ts, 1, 10))
+
diff --git a/tests/baselines/reference/nodeResolution1.types b/tests/baselines/reference/nodeResolution1.types
new file mode 100644
index 0000000000000..4f29acfcc032d
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution1.types
@@ -0,0 +1,10 @@
+=== tests/cases/compiler/b.ts ===
+import y = require("./a");
+>y : typeof y
+
+=== tests/cases/compiler/a.ts ===
+
+export var x = 1;
+>x : number
+>1 : number
+
diff --git a/tests/baselines/reference/nodeResolution2.js b/tests/baselines/reference/nodeResolution2.js
new file mode 100644
index 0000000000000..a5935461088c9
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution2.js
@@ -0,0 +1,10 @@
+//// [tests/cases/compiler/nodeResolution2.ts] ////
+
+//// [a.d.ts]
+
+export var x: number;
+
+//// [b.ts]
+import y = require("a");
+
+//// [b.js]
diff --git a/tests/baselines/reference/nodeResolution2.symbols b/tests/baselines/reference/nodeResolution2.symbols
new file mode 100644
index 0000000000000..643d285e7b8c6
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution2.symbols
@@ -0,0 +1,9 @@
+=== tests/cases/compiler/b.ts ===
+import y = require("a");
+>y : Symbol(y, Decl(b.ts, 0, 0))
+
+=== tests/cases/compiler/node_modules/a.d.ts ===
+
+export var x: number;
+>x : Symbol(x, Decl(a.d.ts, 1, 10))
+
diff --git a/tests/baselines/reference/nodeResolution2.types b/tests/baselines/reference/nodeResolution2.types
new file mode 100644
index 0000000000000..896af7f8bdaf6
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution2.types
@@ -0,0 +1,9 @@
+=== tests/cases/compiler/b.ts ===
+import y = require("a");
+>y : typeof y
+
+=== tests/cases/compiler/node_modules/a.d.ts ===
+
+export var x: number;
+>x : number
+
diff --git a/tests/baselines/reference/nodeResolution3.js b/tests/baselines/reference/nodeResolution3.js
new file mode 100644
index 0000000000000..6e0ec60832301
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution3.js
@@ -0,0 +1,10 @@
+//// [tests/cases/compiler/nodeResolution3.ts] ////
+
+//// [index.d.ts]
+
+export var x: number;
+
+//// [a.ts]
+import y = require("b");
+
+//// [a.js]
diff --git a/tests/baselines/reference/nodeResolution3.symbols b/tests/baselines/reference/nodeResolution3.symbols
new file mode 100644
index 0000000000000..0fca588676f1c
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution3.symbols
@@ -0,0 +1,9 @@
+=== tests/cases/compiler/a.ts ===
+import y = require("b");
+>y : Symbol(y, Decl(a.ts, 0, 0))
+
+=== tests/cases/compiler/node_modules/b/index.d.ts ===
+
+export var x: number;
+>x : Symbol(x, Decl(index.d.ts, 1, 10))
+
diff --git a/tests/baselines/reference/nodeResolution3.types b/tests/baselines/reference/nodeResolution3.types
new file mode 100644
index 0000000000000..82a1ccb27d34a
--- /dev/null
+++ b/tests/baselines/reference/nodeResolution3.types
@@ -0,0 +1,9 @@
+=== tests/cases/compiler/a.ts ===
+import y = require("b");
+>y : typeof y
+
+=== tests/cases/compiler/node_modules/b/index.d.ts ===
+
+export var x: number;
+>x : number
+
diff --git a/tests/cases/compiler/nodeResolution1.ts b/tests/cases/compiler/nodeResolution1.ts
new file mode 100644
index 0000000000000..19316ef251b5d
--- /dev/null
+++ b/tests/cases/compiler/nodeResolution1.ts
@@ -0,0 +1,8 @@
+// @module: commonjs
+// @moduleResolution: node
+
+// @filename: a.ts
+export var x = 1;
+
+// @filename: b.ts
+import y = require("./a");
\ No newline at end of file
diff --git a/tests/cases/compiler/nodeResolution2.ts b/tests/cases/compiler/nodeResolution2.ts
new file mode 100644
index 0000000000000..9d1972c72390e
--- /dev/null
+++ b/tests/cases/compiler/nodeResolution2.ts
@@ -0,0 +1,8 @@
+// @module: commonjs
+// @moduleResolution: node
+
+// @filename: node_modules/a.d.ts
+export var x: number;
+
+// @filename: b.ts
+import y = require("a");
\ No newline at end of file
diff --git a/tests/cases/compiler/nodeResolution3.ts b/tests/cases/compiler/nodeResolution3.ts
new file mode 100644
index 0000000000000..ede8f76dbbeef
--- /dev/null
+++ b/tests/cases/compiler/nodeResolution3.ts
@@ -0,0 +1,8 @@
+// @module: commonjs
+// @moduleResolution: node
+
+// @filename: node_modules/b/index.d.ts
+export var x: number;
+
+// @filename: a.ts
+import y = require("b");
\ No newline at end of file
diff --git a/tests/cases/unittests/moduleResolution.ts b/tests/cases/unittests/moduleResolution.ts
new file mode 100644
index 0000000000000..0917e72f1ce4d
--- /dev/null
+++ b/tests/cases/unittests/moduleResolution.ts
@@ -0,0 +1,221 @@
+/// <reference path="..\..\..\src\harness\external\mocha.d.ts" />
+/// <reference path='..\..\..\src\harness\harness.ts' />
+
+declare namespace chai.assert {
+    function deepEqual(actual: any, expected: any): void;
+}
+
+module ts {
+
+    interface File {
+        name: string
+        content?: string 
+    }
+
+    function createModuleResolutionHost(...files: File[]): ModuleResolutionHost {
+        let map = arrayToMap(files, f => f.name);
+        
+        return { fileExists, readFile };
+        
+        function fileExists(path: string): boolean {
+            return hasProperty(map, path);
+        }
+        
+        function readFile(path: string): string {
+            return hasProperty(map, path) ? map[path].content : undefined;
+        }
+    }
+
+    function splitPath(path: string): { dir: string; rel: string } {
+        let index = path.indexOf(directorySeparator);
+        return index === -1 
+            ? { dir: path, rel: undefined }
+            : { dir: path.substr(0, index), rel: path.substr(index + 1) };
+    }
+
+    describe("Node module resolution - relative paths", () => {
+        
+        function testLoadAsFile(containingFileName: string, moduleFileNameNoExt: string, moduleName: string): void {
+            for (let ext of supportedExtensions) {
+                let containingFile = { name: containingFileName }
+                let moduleFile = { name: moduleFileNameNoExt + ext }
+                let resolution = nodeModuleNameResolver(moduleName, containingFile.name, createModuleResolutionHost(containingFile, moduleFile));                
+                assert.equal(resolution.resolvedFileName, moduleFile.name);
+                
+                let failedLookupLocations: string[] = [];
+                let dir = getDirectoryPath(containingFileName);
+                for (let e of supportedExtensions) {
+                    if (e === ext) {
+                        break;
+                    }
+                    else {
+                        failedLookupLocations.push(normalizePath(getRootLength(moduleName) === 0 ? combinePaths(dir, moduleName) : moduleName) + e);
+                    }
+                }
+                
+                assert.deepEqual(resolution.failedLookupLocations, failedLookupLocations);
+            }
+        }
+        
+        it("module name that starts with './' resolved as relative file name", () => {
+            testLoadAsFile("/foo/bar/baz.ts", "/foo/bar/foo", "./foo");
+        });
+
+        it("module name that starts with '../' resolved as relative file name", () => {
+            testLoadAsFile("/foo/bar/baz.ts", "/foo/foo", "../foo");
+        });
+
+        it("module name that starts with '/' script extension resolved as relative file name", () => {
+            testLoadAsFile("/foo/bar/baz.ts", "/foo", "/foo");
+        });
+
+        it("module name that starts with 'c:/' script extension resolved as relative file name", () => {
+            testLoadAsFile("c:/foo/bar/baz.ts", "c:/foo", "c:/foo");
+        });
+        
+        function testLoadingFromPackageJson(containingFileName: string, packageJsonFileName: string, fieldRef: string, moduleFileName: string, moduleName: string): void {
+            let containingFile = { name: containingFileName };
+            let packageJson = { name: packageJsonFileName, content: JSON.stringify({ "typings": fieldRef }) };
+            let moduleFile = { name: moduleFileName };
+            let resolution = nodeModuleNameResolver(moduleName, containingFile.name, createModuleResolutionHost(containingFile, packageJson, moduleFile));
+            assert.equal(resolution.resolvedFileName, moduleFile.name);
+            // expect three failed lookup location - attempt to load module as file with all supported extensions
+            assert.equal(resolution.failedLookupLocations.length, 3);
+        }
+        
+        it("module name as directory - load from typings", () => {
+            testLoadingFromPackageJson("/a/b/c/d.ts", "/a/b/c/bar/package.json", "c/d/e.d.ts", "/a/b/c/bar/c/d/e.d.ts", "./bar");
+            testLoadingFromPackageJson("/a/b/c/d.ts", "/a/bar/package.json", "e.d.ts", "/a/bar/e.d.ts", "../../bar");
+            testLoadingFromPackageJson("/a/b/c/d.ts", "/bar/package.json", "e.d.ts", "/bar/e.d.ts", "/bar");
+            testLoadingFromPackageJson("c:/a/b/c/d.ts", "c:/bar/package.json", "e.d.ts", "c:/bar/e.d.ts", "c:/bar");
+        });
+        
+        it ("module name as directory - load index.d.ts", () => {
+            let containingFile = {name: "/a/b/c.ts"};
+            let packageJson = {name: "/a/b/foo/package.json", content: JSON.stringify({main: "/c/d"})};
+            let indexFile = { name: "/a/b/foo/index.d.ts" };
+            let resolution = nodeModuleNameResolver("./foo", containingFile.name, createModuleResolutionHost(containingFile, packageJson, indexFile));
+            assert.equal(resolution.resolvedFileName, indexFile.name);
+            assert.deepEqual(resolution.failedLookupLocations, [
+                "/a/b/foo.ts",
+                "/a/b/foo.tsx",
+                "/a/b/foo.d.ts",
+                "/a/b/foo/index.ts",
+                "/a/b/foo/index.tsx",
+            ]);
+        });
+    });
+    
+    describe("Node module resolution - non-relative paths", () => {
+        it("load module as file - ts files not loaded", () => {
+            let containingFile = { name: "/a/b/c/d/e.ts" };
+            let moduleFile = { name: "/a/b/node_modules/foo.ts" };
+            let resolution = nodeModuleNameResolver("foo", containingFile.name, createModuleResolutionHost(containingFile, moduleFile));
+            assert.equal(resolution.resolvedFileName, undefined);
+            assert.deepEqual(resolution.failedLookupLocations, [
+                "/a/b/c/d/node_modules/foo.d.ts",
+                "/a/b/c/d/node_modules/foo/package.json",
+                "/a/b/c/d/node_modules/foo/index.d.ts",
+                "/a/b/c/node_modules/foo.d.ts",
+                "/a/b/c/node_modules/foo/package.json",
+                "/a/b/c/node_modules/foo/index.d.ts",
+                "/a/b/node_modules/foo.d.ts",
+                "/a/b/node_modules/foo/package.json",
+                "/a/b/node_modules/foo/index.d.ts",
+                "/a/node_modules/foo.d.ts",
+                "/a/node_modules/foo/package.json",
+                "/a/node_modules/foo/index.d.ts",
+                "/node_modules/foo.d.ts",
+                "/node_modules/foo/package.json",
+                "/node_modules/foo/index.d.ts"
+            ])
+        });
+
+        it("load module as file", () => {
+            let containingFile = { name: "/a/b/c/d/e.ts" };
+            let moduleFile = { name: "/a/b/node_modules/foo.d.ts" };
+            let resolution = nodeModuleNameResolver("foo", containingFile.name, createModuleResolutionHost(containingFile, moduleFile));
+            assert.equal(resolution.resolvedFileName, moduleFile.name);
+        });
+        
+        it("load module as directory", () => {
+            let containingFile = { name: "/a/node_modules/b/c/node_modules/d/e.ts" };
+            let moduleFile = { name: "/a/node_modules/foo/index.d.ts" };
+            let resolution = nodeModuleNameResolver("foo", containingFile.name, createModuleResolutionHost(containingFile, moduleFile));
+            assert.equal(resolution.resolvedFileName, moduleFile.name);
+            assert.deepEqual(resolution.failedLookupLocations, [
+                "/a/node_modules/b/c/node_modules/d/node_modules/foo.d.ts",
+                "/a/node_modules/b/c/node_modules/d/node_modules/foo/package.json",
+                "/a/node_modules/b/c/node_modules/d/node_modules/foo/index.d.ts",
+                "/a/node_modules/b/c/node_modules/foo.d.ts",
+                "/a/node_modules/b/c/node_modules/foo/package.json",
+                "/a/node_modules/b/c/node_modules/foo/index.d.ts",
+                "/a/node_modules/b/node_modules/foo.d.ts",
+                "/a/node_modules/b/node_modules/foo/package.json",
+                "/a/node_modules/b/node_modules/foo/index.d.ts",
+                "/a/node_modules/foo.d.ts",
+                "/a/node_modules/foo/package.json"
+            ]);
+        });
+    });
+    
+    describe("BaseUrl mode", () => {
+
+        it ("load module as relative url", () => {
+            function test(containingFileName: string, moduleFileName: string, moduleName: string): void {
+                let containingFile = {name: containingFileName };
+                let moduleFile = { name: moduleFileName };
+                let resolution = baseUrlModuleNameResolver(moduleName, containingFile.name, "<some-value>", createModuleResolutionHost(containingFile, moduleFile));
+                assert.equal(resolution.resolvedFileName, moduleFile.name);
+                let expectedFailedLookupLocations: string[] = [];
+                
+                let moduleNameHasExt = forEach(supportedExtensions, e => fileExtensionIs(moduleName, e));
+                if (!moduleNameHasExt) {
+                    let dir = getDirectoryPath(containingFileName);
+                    
+                    // add candidates with extensions that precede extension of the actual module name file in the list of supportd extensions
+                    for (let ext of supportedExtensions) {
+                        
+                        let hasExtension = ext !== ".ts" 
+                            ? fileExtensionIs(moduleFileName, ext) 
+                            : fileExtensionIs(moduleFileName, ".ts") && !fileExtensionIs(moduleFileName, ".d.ts");
+                             
+                        if (hasExtension) {
+                            break;
+                        }
+                        else {
+                            expectedFailedLookupLocations.push(normalizePath(combinePaths(dir, moduleName + ext)));
+                        }
+                    }
+                }
+                
+                assert.deepEqual(resolution.failedLookupLocations, expectedFailedLookupLocations)
+            }
+            
+            test("/a/b/c/d.ts", "/foo.ts", "/foo");
+            test("/a/b/c/d.ts", "/foo.d.ts", "/foo");
+            test("/a/b/c/d.ts", "/foo.tsx", "/foo");
+            
+            test("/a/b/c/d.ts", "/a/b/c/foo.ts", "./foo");
+            test("/a/b/c/d.ts", "/a/b/c/foo.d.ts", "./foo");
+            test("/a/b/c/d.ts", "/a/b/c/foo.tsx", "./foo");
+
+            test("/a/b/c/d.ts", "/a/b/foo.ts", "../foo");
+            test("/a/b/c/d.ts", "/a/b/foo.d.ts", "../foo");
+            test("/a/b/c/d.ts", "/a/b/foo.tsx", "../foo");
+        });
+        
+        it ("load module using base url", () => {
+            function test(containingFileName: string, moduleFileName: string, moduleName: string, baseUrl: string): void {
+                let containingFile = { name: containingFileName };
+                let moduleFile = { name: moduleFileName };
+                let resolution = baseUrlModuleNameResolver(moduleName, containingFileName, baseUrl, createModuleResolutionHost(containingFile, moduleFile));
+                assert.equal(resolution.resolvedFileName, moduleFile.name);
+            }
+            
+            test("/a/base/c/d.ts", "/a/base/c/d/e.ts", "c/d/e", "/a/base");
+            test("/a/base/c/d.ts", "/a/base/c/d/e.d.ts", "c/d/e", "/a/base");
+            test("/a/base/c/d.ts", "/a/base/c/d/e.tsx", "c/d/e", "/a/base");
+        });
+    });
+}
\ No newline at end of file