diff --git a/src/compiler/binder.ts b/src/compiler/binder.ts
index b66497fc40..82cfd59a5d 100644
--- a/src/compiler/binder.ts
+++ b/src/compiler/binder.ts
@@ -519,17 +519,17 @@ module ts {
                     bindBlockScopedDeclaration(<Declaration>node, SymbolFlags.Class, SymbolFlags.ClassExcludes);
                     break;
                 case SyntaxKind.InterfaceDeclaration:
-                    bindDeclaration(<Declaration>node, SymbolFlags.Interface, SymbolFlags.InterfaceExcludes, /*isBlockScopeContainer*/ false);
+                    bindBlockScopedDeclaration(<Declaration>node, SymbolFlags.Interface, SymbolFlags.InterfaceExcludes);
                     break;
                 case SyntaxKind.TypeAliasDeclaration:
-                    bindDeclaration(<Declaration>node, SymbolFlags.TypeAlias, SymbolFlags.TypeAliasExcludes, /*isBlockScopeContainer*/ false);
+                    bindBlockScopedDeclaration(<Declaration>node, SymbolFlags.TypeAlias, SymbolFlags.TypeAliasExcludes);
                     break;
                 case SyntaxKind.EnumDeclaration:
                     if (isConst(node)) {
-                        bindDeclaration(<Declaration>node, SymbolFlags.ConstEnum, SymbolFlags.ConstEnumExcludes, /*isBlockScopeContainer*/ false);
+                        bindBlockScopedDeclaration(<Declaration>node, SymbolFlags.ConstEnum, SymbolFlags.ConstEnumExcludes);
                     }
                     else {
-                        bindDeclaration(<Declaration>node, SymbolFlags.RegularEnum, SymbolFlags.RegularEnumExcludes, /*isBlockScopeContainer*/ false);
+                        bindBlockScopedDeclaration(<Declaration>node, SymbolFlags.RegularEnum, SymbolFlags.RegularEnumExcludes);
                     }
                     break;
                 case SyntaxKind.ModuleDeclaration:
diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 76ec977491..759b235ad0 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -342,7 +342,15 @@ module ts {
                 // Locals of a source file are not in scope (because they get merged into the global symbol table)
                 if (location.locals && !isGlobalSourceFile(location)) {
                     if (result = getSymbol(location.locals, name, meaning)) {
-                        break loop;
+                        // Type parameters of a function are in scope in the entire function declaration, including the parameter
+                        // list and return type. However, local types are only in scope in the function body.
+                        if (!(meaning & SymbolFlags.Type) ||
+                            !(result.flags & (SymbolFlags.Type & ~SymbolFlags.TypeParameter)) ||
+                            !isFunctionLike(location) ||
+                            lastLocation === (<FunctionLikeDeclaration>location).body) {
+                            break loop;
+                        }
+                        result = undefined;
                     }
                 }
                 switch (location.kind) {
@@ -1526,17 +1534,55 @@ module ts {
                     }
                 }
 
+                function writeSymbolTypeReference(symbol: Symbol, typeArguments: Type[], pos: number, end: number) {
+                    // Unnamed function expressions, arrow functions, and unnamed class expressions have reserved names that
+                    // we don't want to display
+                    if (!isReservedMemberName(symbol.name)) {
+                        buildSymbolDisplay(symbol, writer, enclosingDeclaration, SymbolFlags.Type);
+                    }
+                    if (pos < end) {
+                        writePunctuation(writer, SyntaxKind.LessThanToken);
+                        writeType(typeArguments[pos++], TypeFormatFlags.None);
+                        while (pos < end) {
+                            writePunctuation(writer, SyntaxKind.CommaToken);
+                            writeSpace(writer);
+                            writeType(typeArguments[pos++], TypeFormatFlags.None);
+                        }
+                        writePunctuation(writer, SyntaxKind.GreaterThanToken);
+                    }
+                }
+
                 function writeTypeReference(type: TypeReference, flags: TypeFormatFlags) {
+                    let typeArguments = type.typeArguments;
                     if (type.target === globalArrayType && !(flags & TypeFormatFlags.WriteArrayAsGenericType)) {
-                        writeType(type.typeArguments[0], TypeFormatFlags.InElementType);
+                        writeType(typeArguments[0], TypeFormatFlags.InElementType);
                         writePunctuation(writer, SyntaxKind.OpenBracketToken);
                         writePunctuation(writer, SyntaxKind.CloseBracketToken);
                     }
                     else {
-                        buildSymbolDisplay(type.target.symbol, writer, enclosingDeclaration, SymbolFlags.Type);
-                        writePunctuation(writer, SyntaxKind.LessThanToken);
-                        writeTypeList(type.typeArguments, /*union*/ false);
-                        writePunctuation(writer, SyntaxKind.GreaterThanToken);
+                        // Write the type reference in the format f<A>.g<B>.C<X, Y> where A and B are type arguments
+                        // for outer type parameters, and f and g are the respective declaring containers of those
+                        // type parameters.
+                        let outerTypeParameters = type.target.outerTypeParameters;
+                        let i = 0;
+                        if (outerTypeParameters) {
+                            let length = outerTypeParameters.length;
+                            while (i < length) {
+                                // Find group of type arguments for type parameters with the same declaring container.
+                                let start = i;
+                                let parent = getParentSymbolOfTypeParameter(outerTypeParameters[i]);
+                                do {
+                                    i++;
+                                } while (i < length && getParentSymbolOfTypeParameter(outerTypeParameters[i]) === parent);
+                                // When type parameters are their own type arguments for the whole group (i.e. we have
+                                // the default outer type arguments), we don't show the group.
+                                if (!rangeEquals(outerTypeParameters, typeArguments, start, i)) {
+                                    writeSymbolTypeReference(parent, typeArguments, start, i);
+                                    writePunctuation(writer, SyntaxKind.DotToken);
+                                }
+                            }
+                        }
+                        writeSymbolTypeReference(type.symbol, typeArguments, i, typeArguments.length);
                     }
                 }
 
@@ -1732,7 +1778,7 @@ module ts {
             function buildTypeParameterDisplayFromSymbol(symbol: Symbol, writer: SymbolWriter, enclosingDeclaraiton?: Node, flags?: TypeFormatFlags) {
                 let targetSymbol = getTargetSymbol(symbol);
                 if (targetSymbol.flags & SymbolFlags.Class || targetSymbol.flags & SymbolFlags.Interface) {
-                    buildDisplayForTypeParametersAndDelimiters(getTypeParametersOfClassOrInterface(symbol), writer, enclosingDeclaraiton, flags);
+                    buildDisplayForTypeParametersAndDelimiters(getLocalTypeParametersOfClassOrInterface(symbol), writer, enclosingDeclaraiton, flags);
                 }
             }
 
@@ -2469,30 +2515,68 @@ module ts {
             }
         }
 
-        // Return combined list of type parameters from all declarations of a class or interface. Elsewhere we check they're all
-        // the same, but even if they're not we still need the complete list to ensure instantiations supply type arguments
-        // for all type parameters.
-        function getTypeParametersOfClassOrInterface(symbol: Symbol): TypeParameter[] {
-            let result: TypeParameter[];
-            forEach(symbol.declarations, node => {
-                if (node.kind === SyntaxKind.InterfaceDeclaration || node.kind === SyntaxKind.ClassDeclaration) {
-                    let declaration = <InterfaceDeclaration>node;
-                    if (declaration.typeParameters && declaration.typeParameters.length) {
-                        forEach(declaration.typeParameters, node => {
-                            let tp = getDeclaredTypeOfTypeParameter(getSymbolOfNode(node));
-                            if (!result) {
-                                result = [tp];
-                            }
-                            else if (!contains(result, tp)) {
-                                result.push(tp);
-                            }
-                        });
+        // Appends the type parameters given by a list of declarations to a set of type parameters and returns the resulting set.
+        // The function allocates a new array if the input type parameter set is undefined, but otherwise it modifies the set
+        // in-place and returns the same array.
+        function appendTypeParameters(typeParameters: TypeParameter[], declarations: TypeParameterDeclaration[]): TypeParameter[] {
+            for (let declaration of declarations) {
+                let tp = getDeclaredTypeOfTypeParameter(getSymbolOfNode(declaration));
+                if (!typeParameters) {
+                    typeParameters = [tp];
+                }
+                else if (!contains(typeParameters, tp)) {
+                    typeParameters.push(tp);
+                }
+            }
+            return typeParameters;
+        }
+
+        // Appends the outer type parameters of a node to a set of type parameters and returns the resulting set. The function
+        // allocates a new array if the input type parameter set is undefined, but otherwise it modifies the set in-place and
+        // returns the same array.
+        function appendOuterTypeParameters(typeParameters: TypeParameter[], node: Node): TypeParameter[]{
+            while (true) {
+                node = node.parent;
+                if (!node) {
+                    return typeParameters;
+                }
+                if (node.kind === SyntaxKind.ClassDeclaration || node.kind === SyntaxKind.FunctionDeclaration ||
+                    node.kind === SyntaxKind.FunctionExpression || node.kind === SyntaxKind.MethodDeclaration ||
+                    node.kind === SyntaxKind.ArrowFunction) {
+                    let declarations = (<ClassDeclaration | FunctionLikeDeclaration>node).typeParameters;
+                    if (declarations) {
+                        return appendTypeParameters(appendOuterTypeParameters(typeParameters, node), declarations);
                     }
                 }
-            });
+            }
+        }
+
+        // The outer type parameters are those defined by enclosing generic classes, methods, or functions.
+        function getOuterTypeParametersOfClassOrInterface(symbol: Symbol): TypeParameter[] {
+            var kind = symbol.flags & SymbolFlags.Class ? SyntaxKind.ClassDeclaration : SyntaxKind.InterfaceDeclaration;
+            return appendOuterTypeParameters(undefined, getDeclarationOfKind(symbol, kind));
+        }
+
+        // The local type parameters are the combined set of type parameters from all declarations of the class or interface.
+        function getLocalTypeParametersOfClassOrInterface(symbol: Symbol): TypeParameter[] {
+            let result: TypeParameter[];
+            for (let node of symbol.declarations) {
+                if (node.kind === SyntaxKind.InterfaceDeclaration || node.kind === SyntaxKind.ClassDeclaration) {
+                    let declaration = <InterfaceDeclaration>node;
+                    if (declaration.typeParameters) {
+                        result = appendTypeParameters(result, declaration.typeParameters);
+                    }
+                }
+            }
             return result;
         }
 
+        // The full set of type parameters for a generic class or interface type consists of its outer type parameters plus
+        // its locally declared type parameters.
+        function getTypeParametersOfClassOrInterface(symbol: Symbol): TypeParameter[] {
+            return concatenate(getOuterTypeParametersOfClassOrInterface(symbol), getLocalTypeParametersOfClassOrInterface(symbol));
+        }
+
         function getBaseTypes(type: InterfaceType): ObjectType[] {
             let typeWithBaseTypes = <InterfaceTypeWithBaseTypes>type;
             if (!typeWithBaseTypes.baseTypes) {
@@ -2562,10 +2646,13 @@ module ts {
             if (!links.declaredType) {
                 let kind = symbol.flags & SymbolFlags.Class ? TypeFlags.Class : TypeFlags.Interface;
                 let type = links.declaredType = <InterfaceType>createObjectType(kind, symbol);
-                let typeParameters = getTypeParametersOfClassOrInterface(symbol);
-                if (typeParameters) {
+                let outerTypeParameters = getOuterTypeParametersOfClassOrInterface(symbol);
+                let localTypeParameters = getLocalTypeParametersOfClassOrInterface(symbol);
+                if (outerTypeParameters || localTypeParameters) {
                     type.flags |= TypeFlags.Reference;
-                    type.typeParameters = typeParameters;
+                    type.typeParameters = concatenate(outerTypeParameters, localTypeParameters);
+                    type.outerTypeParameters = outerTypeParameters;
+                    type.localTypeParameters = localTypeParameters;
                     (<GenericType>type).instantiations = {};
                     (<GenericType>type).instantiations[getTypeListId(type.typeParameters)] = <GenericType>type;
                     (<GenericType>type).target = <GenericType>type;
@@ -2755,12 +2842,12 @@ module ts {
                 return map(baseSignatures, baseSignature => {
                     let signature = baseType.flags & TypeFlags.Reference ?
                         getSignatureInstantiation(baseSignature, (<TypeReference>baseType).typeArguments) : cloneSignature(baseSignature);
-                    signature.typeParameters = classType.typeParameters;
+                    signature.typeParameters = classType.localTypeParameters;
                     signature.resolvedReturnType = classType;
                     return signature;
                 });
             }
-            return [createSignature(undefined, classType.typeParameters, emptyArray, classType, 0, false, false)];
+            return [createSignature(undefined, classType.localTypeParameters, emptyArray, classType, 0, false, false)];
         }
 
         function createTupleTypeMemberSymbols(memberTypes: Type[]): SymbolTable {
@@ -3109,7 +3196,7 @@ module ts {
             let links = getNodeLinks(declaration);
             if (!links.resolvedSignature) {
                 let classType = declaration.kind === SyntaxKind.Constructor ? getDeclaredTypeOfClassOrInterface((<ClassDeclaration>declaration.parent).symbol) : undefined;
-                let typeParameters = classType ? classType.typeParameters :
+                let typeParameters = classType ? classType.localTypeParameters :
                     declaration.typeParameters ? getTypeParametersFromDeclaration(declaration.typeParameters) : undefined;
                 let parameters: Symbol[] = [];
                 let hasStringLiterals = false;
@@ -3311,6 +3398,10 @@ module ts {
             return type.constraint === noConstraintType ? undefined : type.constraint;
         }
 
+        function getParentSymbolOfTypeParameter(typeParameter: TypeParameter): Symbol {
+            return getSymbolOfNode(getDeclarationOfKind(typeParameter.symbol, SyntaxKind.TypeParameter).parent);
+        }
+
         function getTypeListId(types: Type[]) {
             switch (types.length) {
                 case 1:
@@ -3426,12 +3517,22 @@ module ts {
                         else {
                             type = getDeclaredTypeOfSymbol(symbol);
                             if (type.flags & (TypeFlags.Class | TypeFlags.Interface) && type.flags & TypeFlags.Reference) {
-                                let typeParameters = (<InterfaceType>type).typeParameters;
-                                if (node.typeArguments && node.typeArguments.length === typeParameters.length) {
-                                    type = createTypeReference(<GenericType>type, map(node.typeArguments, getTypeFromTypeNode));
+                                // In a type reference, the outer type parameters of the referenced class or interface are automatically
+                                // supplied as type arguments and the type reference only specifies arguments for the local type parameters
+                                // of the class or interface.
+                                let localTypeParameters = (<InterfaceType>type).localTypeParameters;
+                                let expectedTypeArgCount = localTypeParameters ? localTypeParameters.length : 0;
+                                let typeArgCount = node.typeArguments ? node.typeArguments.length : 0;
+                                if (typeArgCount === expectedTypeArgCount) {
+                                    // When no type arguments are expected we already have the right type because all outer type parameters
+                                    // have themselves as default type arguments.
+                                    if (typeArgCount) {
+                                        type = createTypeReference(<GenericType>type, concatenate((<InterfaceType>type).outerTypeParameters,
+                                            map(node.typeArguments, getTypeFromTypeNode)));
+                                    }
                                 }
                                 else {
-                                    error(node, Diagnostics.Generic_type_0_requires_1_type_argument_s, typeToString(type, /*enclosingDeclaration*/ undefined, TypeFormatFlags.WriteArrayAsGenericType), typeParameters.length);
+                                    error(node, Diagnostics.Generic_type_0_requires_1_type_argument_s, typeToString(type, /*enclosingDeclaration*/ undefined, TypeFormatFlags.WriteArrayAsGenericType), expectedTypeArgCount);
                                     type = undefined;
                                 }
                             }
@@ -3908,7 +4009,7 @@ module ts {
                     return mapper(<TypeParameter>type);
                 }
                 if (type.flags & TypeFlags.Anonymous) {
-                    return type.symbol && type.symbol.flags & (SymbolFlags.Function | SymbolFlags.Method | SymbolFlags.TypeLiteral | SymbolFlags.ObjectLiteral) ?
+                    return type.symbol && type.symbol.flags & (SymbolFlags.Function | SymbolFlags.Method | SymbolFlags.Class | SymbolFlags.TypeLiteral | SymbolFlags.ObjectLiteral) ?
                         instantiateAnonymousType(<ObjectType>type, mapper) : type;
                 }
                 if (type.flags & TypeFlags.Reference) {
@@ -9140,7 +9241,6 @@ module ts {
         function checkFunctionDeclaration(node: FunctionDeclaration): void {
             if (produceDiagnostics) {
                 checkFunctionLikeDeclaration(node) ||
-                checkGrammarDisallowedModifiersInBlockOrObjectLiteralExpression(node) ||
                 checkGrammarFunctionName(node.name) ||
                 checkGrammarForGenerator(node);
 
@@ -9511,7 +9611,7 @@ module ts {
 
         function checkVariableStatement(node: VariableStatement) {
             // Grammar checking
-            checkGrammarDecorators(node) || checkGrammarDisallowedModifiersInBlockOrObjectLiteralExpression(node) || checkGrammarModifiers(node) || checkGrammarVariableDeclarationList(node.declarationList) || checkGrammarForDisallowedLetOrConstStatement(node);
+            checkGrammarDecorators(node) || checkGrammarModifiers(node) || checkGrammarVariableDeclarationList(node.declarationList) || checkGrammarForDisallowedLetOrConstStatement(node);
 
             forEach(node.declarationList.declarations, checkSourceElement);
         }
@@ -10223,10 +10323,6 @@ module ts {
         function checkClassDeclaration(node: ClassDeclaration) {
             checkGrammarDeclarationNameInStrictMode(node);
             // Grammar checking
-            if (node.parent.kind !== SyntaxKind.ModuleBlock && node.parent.kind !== SyntaxKind.SourceFile) {
-                grammarErrorOnNode(node, Diagnostics.class_declarations_are_only_supported_directly_inside_a_module_or_as_a_top_level_declaration);
-            }
-
             if (!node.name && !(node.flags & NodeFlags.Default)) {
                 grammarErrorOnFirstToken(node, Diagnostics.A_class_declaration_without_the_default_modifier_must_have_a_name);
             }
@@ -12395,19 +12491,28 @@ module ts {
                 case SyntaxKind.MethodDeclaration:
                 case SyntaxKind.MethodSignature:
                 case SyntaxKind.IndexSignature:
-                case SyntaxKind.ClassDeclaration:
-                case SyntaxKind.InterfaceDeclaration:
                 case SyntaxKind.ModuleDeclaration:
-                case SyntaxKind.EnumDeclaration:
-                case SyntaxKind.VariableStatement:
-                case SyntaxKind.FunctionDeclaration:
-                case SyntaxKind.TypeAliasDeclaration:
                 case SyntaxKind.ImportDeclaration:
                 case SyntaxKind.ImportEqualsDeclaration:
                 case SyntaxKind.ExportDeclaration:
                 case SyntaxKind.ExportAssignment:
                 case SyntaxKind.Parameter:
                     break;
+                case SyntaxKind.ClassDeclaration:
+                case SyntaxKind.InterfaceDeclaration:
+                case SyntaxKind.VariableStatement:
+                case SyntaxKind.FunctionDeclaration:
+                case SyntaxKind.TypeAliasDeclaration:
+                    if (node.modifiers && node.parent.kind !== SyntaxKind.ModuleBlock && node.parent.kind !== SyntaxKind.SourceFile) {
+                        return grammarErrorOnFirstToken(node, Diagnostics.Modifiers_cannot_appear_here);
+                    }
+                    break;
+                case SyntaxKind.EnumDeclaration:
+                    if (node.modifiers && (node.modifiers.length > 1 || node.modifiers[0].kind !== SyntaxKind.ConstKeyword) &&
+                        node.parent.kind !== SyntaxKind.ModuleBlock && node.parent.kind !== SyntaxKind.SourceFile) {
+                        return grammarErrorOnFirstToken(node, Diagnostics.Modifiers_cannot_appear_here);
+                    }
+                    break;
                 default:
                     return false;
             }
diff --git a/src/compiler/core.ts b/src/compiler/core.ts
index f5719033a2..281bfa36ec 100644
--- a/src/compiler/core.ts
+++ b/src/compiler/core.ts
@@ -129,6 +129,16 @@ module ts {
         }
     } 
 
+    export function rangeEquals<T>(array1: T[], array2: T[], pos: number, end: number) {
+        while (pos < end) {
+            if (array1[pos] !== array2[pos]) {
+                return false;
+            }
+            pos++;
+        }
+        return true;
+    }
+
     /**
      * Returns the last element of an array if non-empty, undefined otherwise.
      */
diff --git a/src/compiler/diagnosticInformationMap.generated.ts b/src/compiler/diagnosticInformationMap.generated.ts
index 5212f062ee..6e73d28bdd 100644
--- a/src/compiler/diagnosticInformationMap.generated.ts
+++ b/src/compiler/diagnosticInformationMap.generated.ts
@@ -548,6 +548,5 @@ module ts {
         decorators_can_only_be_used_in_a_ts_file: { code: 8017, category: DiagnosticCategory.Error, key: "'decorators' can only be used in a .ts file." },
         Only_identifiers_Slashqualified_names_with_optional_type_arguments_are_currently_supported_in_a_class_extends_clauses: { code: 9002, category: DiagnosticCategory.Error, key: "Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses." },
         class_expressions_are_not_currently_supported: { code: 9003, category: DiagnosticCategory.Error, key: "'class' expressions are not currently supported." },
-        class_declarations_are_only_supported_directly_inside_a_module_or_as_a_top_level_declaration: { code: 9004, category: DiagnosticCategory.Error, key: "'class' declarations are only supported directly inside a module or as a top level declaration." },
     };
 }
\ No newline at end of file
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index 2aa5bdf298..d5764605d5 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -2185,9 +2185,5 @@
     "'class' expressions are not currently supported.": {
         "category": "Error",
         "code": 9003
-    },
-    "'class' declarations are only supported directly inside a module or as a top level declaration.": {
-        "category": "Error",
-        "code": 9004
     }
 }
diff --git a/src/compiler/parser.ts b/src/compiler/parser.ts
index d6d6f0d14d..4a46e375f8 100644
--- a/src/compiler/parser.ts
+++ b/src/compiler/parser.ts
@@ -401,7 +401,7 @@ module ts {
     module Parser {
         // Share a single scanner across all calls to parse a source file.  This helps speed things
         // up by avoiding the cost of creating/compiling scanners over and over again.
-        const scanner = createScanner(ScriptTarget.Latest, /*skipTrivia:*/ true);
+        const scanner = createScanner(ScriptTarget.Latest, /*skipTrivia*/ true);
         const disallowInAndDecoratorContext = ParserContextFlags.DisallowIn | ParserContextFlags.Decorator;
 
         let sourceFile: SourceFile;
@@ -493,6 +493,13 @@ module ts {
         // attached to the EOF token.
         let parseErrorBeforeNextFinishedNode: boolean = false;
 
+        export const enum StatementFlags {
+            None = 0,
+            Statement = 1,
+            ModuleElement = 2,
+            StatementOrModuleElement = Statement | ModuleElement
+        }
+
         export function parseSourceFile(fileName: string, _sourceText: string, languageVersion: ScriptTarget, _syntaxCursor: IncrementalParser.SyntaxCursor, setParentNodes?: boolean): SourceFile {
             initializeState(fileName, _sourceText, languageVersion, _syntaxCursor);
 
@@ -847,7 +854,7 @@ module ts {
         // was in immediately prior to invoking the callback.  The result of invoking the callback
         // is returned from this function.
         function lookAhead<T>(callback: () => T): T {
-            return speculationHelper(callback, /*isLookAhead:*/ true);
+            return speculationHelper(callback, /*isLookAhead*/ true);
         }
 
         // Invokes the provided callback.  If the callback returns something falsy, then it restores
@@ -855,7 +862,7 @@ module ts {
         // callback returns something truthy, then the parser state is not rolled back.  The result
         // of invoking the callback is returned from this function.
         function tryParse<T>(callback: () => T): T {
-            return speculationHelper(callback, /*isLookAhead:*/ false);
+            return speculationHelper(callback, /*isLookAhead*/ false);
         }
 
         // Ignore strict mode flag because we will report an error in type checker instead.
@@ -1004,7 +1011,7 @@ module ts {
                 return finishNode(node);
             }
 
-            return <Identifier>createMissingNode(SyntaxKind.Identifier, /*reportAtCurrentPosition:*/ false, diagnosticMessage || Diagnostics.Identifier_expected);
+            return <Identifier>createMissingNode(SyntaxKind.Identifier, /*reportAtCurrentPosition*/ false, diagnosticMessage || Diagnostics.Identifier_expected);
         }
 
         function parseIdentifier(diagnosticMessage?: DiagnosticMessage): Identifier {
@@ -1023,7 +1030,7 @@ module ts {
 
         function parsePropertyNameWorker(allowComputedPropertyNames: boolean): DeclarationName {
             if (token === SyntaxKind.StringLiteral || token === SyntaxKind.NumericLiteral) {
-                return parseLiteralNode(/*internName:*/ true);
+                return parseLiteralNode(/*internName*/ true);
             }
             if (allowComputedPropertyNames && token === SyntaxKind.OpenBracketToken) {
                 return parseComputedPropertyName();
@@ -1121,10 +1128,17 @@ module ts {
             switch (parsingContext) {
                 case ParsingContext.SourceElements:
                 case ParsingContext.ModuleElements:
-                    return isSourceElement(inErrorRecovery);
+                    // If we're in error recovery, then we don't want to treat ';' as an empty statement.
+                    // The problem is that ';' can show up in far too many contexts, and if we see one
+                    // and assume it's a statement, then we may bail out inappropriately from whatever
+                    // we're parsing.  For example, if we have a semicolon in the middle of a class, then
+                    // we really don't want to assume the class is over and we're on a statement in the
+                    // outer module.  We just want to consume and move on.
+                    return !(token === SyntaxKind.SemicolonToken && inErrorRecovery) && isStartOfModuleElement();
                 case ParsingContext.BlockStatements:
                 case ParsingContext.SwitchClauseStatements:
-                    return isStartOfStatement(inErrorRecovery);
+                    // During error recovery we don't treat empty statements as statements
+                    return !(token === SyntaxKind.SemicolonToken && inErrorRecovery) && isStartOfStatement();
                 case ParsingContext.SwitchClauses:
                     return token === SyntaxKind.CaseKeyword || token === SyntaxKind.DefaultKeyword;
                 case ParsingContext.TypeMembers:
@@ -1805,7 +1819,7 @@ module ts {
                     // Report that we need an identifier.  However, report it right after the dot,
                     // and not on the next token.  This is because the next token might actually
                     // be an identifier and the error woudl be quite confusing.
-                    return <Identifier>createMissingNode(SyntaxKind.Identifier, /*reportAtCurrentToken:*/ true, Diagnostics.Identifier_expected);
+                    return <Identifier>createMissingNode(SyntaxKind.Identifier, /*reportAtCurrentToken*/ true, Diagnostics.Identifier_expected);
                 }
             }
 
@@ -1843,7 +1857,7 @@ module ts {
                 literal = parseLiteralNode();
             }
             else {
-                literal = <LiteralExpression>parseExpectedToken(SyntaxKind.TemplateTail, /*reportAtCurrentPosition:*/ false, Diagnostics._0_expected, tokenToString(SyntaxKind.CloseBraceToken));
+                literal = <LiteralExpression>parseExpectedToken(SyntaxKind.TemplateTail, /*reportAtCurrentPosition*/ false, Diagnostics._0_expected, tokenToString(SyntaxKind.CloseBraceToken));
             }
 
             span.literal = literal;
@@ -1936,7 +1950,7 @@ module ts {
         function parseParameterType(): TypeNode {
             if (parseOptional(SyntaxKind.ColonToken)) {
                 return token === SyntaxKind.StringLiteral
-                    ? <StringLiteral>parseLiteralNode(/*internName:*/ true)
+                    ? <StringLiteral>parseLiteralNode(/*internName*/ true)
                     : parseType();
             }
 
@@ -2077,7 +2091,7 @@ module ts {
             if (kind === SyntaxKind.ConstructSignature) {
                 parseExpected(SyntaxKind.NewKeyword);
             }
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ false, /*requireCompleteParameterList:*/ false, node);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ false, /*requireCompleteParameterList*/ false, node);
             parseTypeMemberSemicolon();
             return finishNode(node);
         }
@@ -2167,7 +2181,7 @@ module ts {
 
                 // Method signatues don't exist in expression contexts.  So they have neither
                 // [Yield] nor [GeneratorParameter]
-                fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ false, /*requireCompleteParameterList:*/ false, method);
+                fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ false, /*requireCompleteParameterList*/ false, method);
                 parseTypeMemberSemicolon();
                 return finishNode(method);
             }
@@ -2224,7 +2238,7 @@ module ts {
                 case SyntaxKind.OpenBracketToken:
                     // Indexer or computed property
                     return isIndexSignature()
-                        ? parseIndexSignatureDeclaration(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers:*/ undefined)
+                        ? parseIndexSignatureDeclaration(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers*/ undefined)
                         : parsePropertyOrMethodSignature();
                 case SyntaxKind.NewKeyword:
                     if (lookAhead(isStartOfConstructSignature)) {
@@ -2306,7 +2320,7 @@ module ts {
             if (kind === SyntaxKind.ConstructorType) {
                 parseExpected(SyntaxKind.NewKeyword);
             }
-            fillSignature(SyntaxKind.EqualsGreaterThanToken, /*yieldAndGeneratorParameterContext:*/ false, /*requireCompleteParameterList:*/ false, node);
+            fillSignature(SyntaxKind.EqualsGreaterThanToken, /*yieldAndGeneratorParameterContext*/ false, /*requireCompleteParameterList*/ false, node);
             return finishNode(node);
         }
 
@@ -2615,7 +2629,7 @@ module ts {
             // Otherwise, we try to parse out the conditional expression bit.  We want to allow any
             // binary expression here, so we pass in the 'lowest' precedence here so that it matches
             // and consumes anything.
-            let expr = parseBinaryExpressionOrHigher(/*precedence:*/ 0);
+            let expr = parseBinaryExpressionOrHigher(/*precedence*/ 0);
 
             // To avoid a look-ahead, we did not handle the case of an arrow function with a single un-parenthesized
             // parameter ('x => ...') above. We handle it here by checking if the parsed expression was a single
@@ -2677,12 +2691,6 @@ module ts {
             return !scanner.hasPrecedingLineBreak() && isIdentifier()
         }
 
-        function nextTokenIsIdentifierOrStartOfDestructuringOnTheSameLine() {
-            nextToken();
-            return !scanner.hasPrecedingLineBreak() &&
-                (isIdentifier() || token === SyntaxKind.OpenBraceToken || token === SyntaxKind.OpenBracketToken);
-        }
-
         function parseYieldExpression(): YieldExpression {
             let node = <YieldExpression>createNode(SyntaxKind.YieldExpression);
 
@@ -2737,7 +2745,7 @@ module ts {
             // it out, but don't allow any ambiguity, and return 'undefined' if this could be an
             // expression instead.
             let arrowFunction = triState === Tristate.True
-                ? parseParenthesizedArrowFunctionExpressionHead(/*allowAmbiguity:*/ true)
+                ? parseParenthesizedArrowFunctionExpressionHead(/*allowAmbiguity*/ true)
                 : tryParse(parsePossibleParenthesizedArrowFunctionExpressionHead);
 
             if (!arrowFunction) {
@@ -2748,7 +2756,7 @@ module ts {
             // 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.
             var lastToken = token;
-            arrowFunction.equalsGreaterThanToken = parseExpectedToken(SyntaxKind.EqualsGreaterThanToken, /*reportAtCurrentPosition:*/false, Diagnostics._0_expected, "=>");
+            arrowFunction.equalsGreaterThanToken = parseExpectedToken(SyntaxKind.EqualsGreaterThanToken, /*reportAtCurrentPosition*/false, Diagnostics._0_expected, "=>");
             arrowFunction.body = (lastToken === SyntaxKind.EqualsGreaterThanToken || lastToken === SyntaxKind.OpenBraceToken)
                 ? parseArrowFunctionExpressionBody()
                 : parseIdentifier();
@@ -2846,7 +2854,7 @@ module ts {
         }
 
         function parsePossibleParenthesizedArrowFunctionExpressionHead(): ArrowFunction {
-            return parseParenthesizedArrowFunctionExpressionHead(/*allowAmbiguity:*/ false);
+            return parseParenthesizedArrowFunctionExpressionHead(/*allowAmbiguity*/ false);
         }
 
         function parseParenthesizedArrowFunctionExpressionHead(allowAmbiguity: boolean): ArrowFunction {
@@ -2858,7 +2866,7 @@ module ts {
             // a => (b => c)
             // And think that "(b =>" was actually a parenthesized arrow function with a missing
             // close paren.
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ false, /*requireCompleteParameterList:*/ !allowAmbiguity, node);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ false, /*requireCompleteParameterList*/ !allowAmbiguity, node);
 
             // If we couldn't get parameters, we definitely could not parse out an arrow function.
             if (!node.parameters) {
@@ -2883,14 +2891,14 @@ module ts {
 
         function parseArrowFunctionExpressionBody(): Block | Expression {
             if (token === SyntaxKind.OpenBraceToken) {
-                return parseFunctionBlock(/*allowYield:*/ false, /* ignoreMissingOpenBrace */ false);
+                return parseFunctionBlock(/*allowYield*/ false, /*ignoreMissingOpenBrace*/ false);
             }
 
-            if (isStartOfStatement(/*inErrorRecovery:*/ true) &&
-                !isStartOfExpressionStatement() &&
+            if (token !== SyntaxKind.SemicolonToken &&
                 token !== SyntaxKind.FunctionKeyword &&
-                token !== SyntaxKind.ClassKeyword) {
-
+                token !== SyntaxKind.ClassKeyword &&
+                isStartOfStatement() &&
+                !isStartOfExpressionStatement()) {
                 // Check if we got a plain statement (i.e. no expression-statements, no function/class expressions/declarations)
                 //
                 // Here we try to recover from a potential error situation in the case where the
@@ -2905,7 +2913,7 @@ module ts {
                 // up preemptively closing the containing construct.
                 //
                 // Note: even when 'ignoreMissingOpenBrace' is passed as true, parseBody will still error.
-                return parseFunctionBlock(/*allowYield:*/ false, /* ignoreMissingOpenBrace */ true);
+                return parseFunctionBlock(/*allowYield*/ false, /*ignoreMissingOpenBrace*/ true);
             }
 
             return parseAssignmentExpressionOrHigher();
@@ -2924,7 +2932,7 @@ module ts {
             node.condition = leftOperand;
             node.questionToken = questionToken;
             node.whenTrue = doOutsideOfContext(disallowInAndDecoratorContext, parseAssignmentExpressionOrHigher);
-            node.colonToken = parseExpectedToken(SyntaxKind.ColonToken, /*reportAtCurrentPosition:*/ false,
+            node.colonToken = parseExpectedToken(SyntaxKind.ColonToken, /*reportAtCurrentPosition*/ false,
                 Diagnostics._0_expected, tokenToString(SyntaxKind.ColonToken));
             node.whenFalse = parseAssignmentExpressionOrHigher();
             return finishNode(node);
@@ -3188,8 +3196,8 @@ module ts {
             // If it wasn't then just try to parse out a '.' and report an error.
             let node = <PropertyAccessExpression>createNode(SyntaxKind.PropertyAccessExpression, expression.pos);
             node.expression = expression;
-            node.dotToken = parseExpectedToken(SyntaxKind.DotToken, /*reportAtCurrentPosition:*/ false, Diagnostics.super_must_be_followed_by_an_argument_list_or_member_access);
-            node.name = parseRightSideOfDot(/*allowIdentifierNames:*/ true);
+            node.dotToken = parseExpectedToken(SyntaxKind.DotToken, /*reportAtCurrentPosition*/ false, Diagnostics.super_must_be_followed_by_an_argument_list_or_member_access);
+            node.name = parseRightSideOfDot(/*allowIdentifierNames*/ true);
             return finishNode(node);
         }
 
@@ -3209,7 +3217,7 @@ module ts {
                     let propertyAccess = <PropertyAccessExpression>createNode(SyntaxKind.PropertyAccessExpression, expression.pos);
                     propertyAccess.expression = expression;
                     propertyAccess.dotToken = dotToken;
-                    propertyAccess.name = parseRightSideOfDot(/*allowIdentifierNames:*/ true);
+                    propertyAccess.name = parseRightSideOfDot(/*allowIdentifierNames*/ true);
                     expression = finishNode(propertyAccess);
                     continue;
                 }
@@ -3472,7 +3480,7 @@ module ts {
                 node.flags |= NodeFlags.MultiLine;
             }
 
-            node.properties = parseDelimitedList(ParsingContext.ObjectLiteralMembers, parseObjectLiteralElement, /*considerSemicolonAsDelimeter:*/ true);
+            node.properties = parseDelimitedList(ParsingContext.ObjectLiteralMembers, parseObjectLiteralElement, /*considerSemicolonAsDelimeter*/ true);
             parseExpected(SyntaxKind.CloseBraceToken);
             return finishNode(node);
         }
@@ -3490,8 +3498,8 @@ module ts {
             parseExpected(SyntaxKind.FunctionKeyword);
             node.asteriskToken = parseOptionalToken(SyntaxKind.AsteriskToken);
             node.name = node.asteriskToken ? doInYieldContext(parseOptionalIdentifier) : parseOptionalIdentifier();
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ !!node.asteriskToken, /*requireCompleteParameterList:*/ false, node);
-            node.body = parseFunctionBlock(/*allowYield:*/ !!node.asteriskToken, /* ignoreMissingOpenBrace */ false);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ !!node.asteriskToken, /*requireCompleteParameterList*/ false, node);
+            node.body = parseFunctionBlock(/*allowYield*/ !!node.asteriskToken, /* ignoreMissingOpenBrace */ false);
             if (saveDecoratorContext) {
                 setDecoratorContext(true);
             }
@@ -3601,7 +3609,7 @@ module ts {
             let initializer: VariableDeclarationList | Expression = undefined;
             if (token !== SyntaxKind.SemicolonToken) {
                 if (token === SyntaxKind.VarKeyword || token === SyntaxKind.LetKeyword || token === SyntaxKind.ConstKeyword) {
-                    initializer = parseVariableDeclarationList(/*inForStatementInitializer:*/ true);
+                    initializer = parseVariableDeclarationList(/*inForStatementInitializer*/ true);
                 }
                 else {
                     initializer = disallowInAnd(parseExpression);
@@ -3731,14 +3739,14 @@ module ts {
             let node = <TryStatement>createNode(SyntaxKind.TryStatement);
 
             parseExpected(SyntaxKind.TryKeyword);
-            node.tryBlock = parseBlock(/*ignoreMissingOpenBrace:*/ false, /*checkForStrictMode*/ false);
+            node.tryBlock = parseBlock(/*ignoreMissingOpenBrace*/ false, /*checkForStrictMode*/ false);
             node.catchClause = token === SyntaxKind.CatchKeyword ? parseCatchClause() : undefined;
 
             // If we don't have a catch clause, then we must have a finally clause.  Try to parse
             // one out no matter what.
             if (!node.catchClause || token === SyntaxKind.FinallyKeyword) {
                 parseExpected(SyntaxKind.FinallyKeyword);
-                node.finallyBlock = parseBlock(/*ignoreMissingOpenBrace:*/ false, /*checkForStrictMode*/ false);
+                node.finallyBlock = parseBlock(/*ignoreMissingOpenBrace*/ false, /*checkForStrictMode*/ false);
             }
 
             return finishNode(node);
@@ -3752,7 +3760,7 @@ module ts {
             }
 
             parseExpected(SyntaxKind.CloseParenToken);
-            result.block = parseBlock(/*ignoreMissingOpenBrace:*/ false, /*checkForStrictMode:*/ false);
+            result.block = parseBlock(/*ignoreMissingOpenBrace*/ false, /*checkForStrictMode*/ false);
             return finishNode(result);
         }
 
@@ -3784,34 +3792,72 @@ module ts {
             }
         }
 
-        function isStartOfStatement(inErrorRecovery: boolean): boolean {
-            // Functions, variable statements and classes are allowed as a statement.  But as per
-            // the grammar, they also allow modifiers.  So we have to check for those statements 
-            // that might be following modifiers.This ensures that things work properly when
-            // incrementally parsing as the parser will produce the same FunctionDeclaraiton, 
-            // VariableStatement or ClassDeclaration, if it has the same text regardless of whether 
-            // it is inside a block or not.
-            if (isModifier(token)) {
-                let result = lookAhead(parseVariableStatementOrFunctionDeclarationOrClassDeclarationWithDecoratorsOrModifiers);
-                if (result) {
-                    return true;
+        function isIdentifierOrKeyword() {
+            return token >= SyntaxKind.Identifier;
+        }
+
+        function nextTokenIsIdentifierOrKeywordOnSameLine() {
+            nextToken();
+            return isIdentifierOrKeyword() && !scanner.hasPrecedingLineBreak();
+        }
+
+        function parseDeclarationFlags(): StatementFlags {
+            while (true) {
+                switch (token) {
+                    case SyntaxKind.VarKeyword:
+                    case SyntaxKind.LetKeyword:
+                    case SyntaxKind.ConstKeyword:
+                    case SyntaxKind.FunctionKeyword:
+                    case SyntaxKind.ClassKeyword:
+                    case SyntaxKind.EnumKeyword:
+                        return StatementFlags.Statement;
+                    case SyntaxKind.InterfaceKeyword:
+                    case SyntaxKind.TypeKeyword:
+                        nextToken();
+                        return isIdentifierOrKeyword() ? StatementFlags.Statement : StatementFlags.None;
+                    case SyntaxKind.ModuleKeyword:
+                    case SyntaxKind.NamespaceKeyword:
+                        nextToken();
+                        return isIdentifierOrKeyword() || token === SyntaxKind.StringLiteral ? StatementFlags.ModuleElement : StatementFlags.None;
+                    case SyntaxKind.ImportKeyword:
+                        nextToken();
+                        return token === SyntaxKind.StringLiteral || token === SyntaxKind.AsteriskToken ||
+                            token === SyntaxKind.OpenBraceToken || isIdentifierOrKeyword() ?
+                            StatementFlags.ModuleElement : StatementFlags.None;
+                    case SyntaxKind.ExportKeyword:
+                        nextToken();
+                        if (token === SyntaxKind.EqualsToken || token === SyntaxKind.AsteriskToken ||
+                            token === SyntaxKind.OpenBraceToken || token === SyntaxKind.DefaultKeyword) {
+                            return StatementFlags.ModuleElement;
+                        }
+                        continue;
+                    case SyntaxKind.DeclareKeyword:
+                    case SyntaxKind.PublicKeyword:
+                    case SyntaxKind.PrivateKeyword:
+                    case SyntaxKind.ProtectedKeyword:
+                    case SyntaxKind.StaticKeyword:
+                        nextToken();
+                        continue;
+                    default:
+                        return StatementFlags.None;
                 }
             }
+        }
 
+        function getDeclarationFlags(): StatementFlags {
+            return lookAhead(parseDeclarationFlags);
+        }
+
+        function getStatementFlags(): StatementFlags {
             switch (token) {
+                case SyntaxKind.AtToken:
                 case SyntaxKind.SemicolonToken:
-                    // If we're in error recovery, then we don't want to treat ';' as an empty statement.
-                    // The problem is that ';' can show up in far too many contexts, and if we see one
-                    // and assume it's a statement, then we may bail out inappropriately from whatever
-                    // we're parsing.  For example, if we have a semicolon in the middle of a class, then
-                    // we really don't want to assume the class is over and we're on a statement in the
-                    // outer module.  We just want to consume and move on.
-                    return !inErrorRecovery;
                 case SyntaxKind.OpenBraceToken:
                 case SyntaxKind.VarKeyword:
                 case SyntaxKind.LetKeyword:
                 case SyntaxKind.FunctionKeyword:
                 case SyntaxKind.ClassKeyword:
+                case SyntaxKind.EnumKeyword:
                 case SyntaxKind.IfKeyword:
                 case SyntaxKind.DoKeyword:
                 case SyntaxKind.WhileKeyword:
@@ -3828,62 +3874,84 @@ module ts {
                 // however, we say they are here so that we may gracefully parse them and error later.
                 case SyntaxKind.CatchKeyword:
                 case SyntaxKind.FinallyKeyword:
-                    return true;
+                    return StatementFlags.Statement;
+
                 case SyntaxKind.ConstKeyword:
-                    // const keyword can precede enum keyword when defining constant enums
-                    // 'const enum' do not start statement.
-                    // In ES 6 'enum' is a future reserved keyword, so it should not be used as identifier
-                    let isConstEnum = lookAhead(nextTokenIsEnumKeyword);
-                    return !isConstEnum;
+                case SyntaxKind.ExportKeyword:
+                case SyntaxKind.ImportKeyword:
+                    return getDeclarationFlags();
+
+                case SyntaxKind.DeclareKeyword:
                 case SyntaxKind.InterfaceKeyword:
                 case SyntaxKind.ModuleKeyword:
                 case SyntaxKind.NamespaceKeyword:
-                case SyntaxKind.EnumKeyword:
                 case SyntaxKind.TypeKeyword:
-                    // When followed by an identifier, these do not start a statement but might
-                    // instead be following declarations
-                    if (isDeclarationStart()) {
-                        return false;
-                    }
+                    // When these don't start a declaration, they're an identifier in an expression statement
+                    return getDeclarationFlags() || StatementFlags.Statement;
 
                 case SyntaxKind.PublicKeyword:
                 case SyntaxKind.PrivateKeyword:
                 case SyntaxKind.ProtectedKeyword:
                 case SyntaxKind.StaticKeyword:
-                    // When followed by an identifier or keyword, these do not start a statement but
-                    // might instead be following type members
-                    if (lookAhead(nextTokenIsIdentifierOrKeywordOnSameLine)) {
-                        return false;
-                    }
+                    // When these don't start a declaration, they may be the start of a class member if an identifier
+                    // immediately follows. Otherwise they're an identifier in an expression statement.
+                    return getDeclarationFlags() ||
+                        (lookAhead(nextTokenIsIdentifierOrKeywordOnSameLine) ? StatementFlags.None : StatementFlags.Statement);
+
                 default:
-                    return isStartOfExpression();
+                    return isStartOfExpression() ? StatementFlags.Statement : StatementFlags.None;
             }
         }
 
-        function nextTokenIsEnumKeyword() {
-            nextToken();
-            return token === SyntaxKind.EnumKeyword
+        function isStartOfStatement(): boolean {
+            return (getStatementFlags() & StatementFlags.Statement) !== 0;
         }
 
-        function nextTokenIsIdentifierOrKeywordOnSameLine() {
+        function isStartOfModuleElement(): boolean {
+            return (getStatementFlags() & StatementFlags.StatementOrModuleElement) !== 0;
+        }
+
+        function nextTokenIsIdentifierOrStartOfDestructuringOnTheSameLine() {
             nextToken();
-            return isIdentifierOrKeyword() && !scanner.hasPrecedingLineBreak();
+            return !scanner.hasPrecedingLineBreak() &&
+                (isIdentifier() || token === SyntaxKind.OpenBraceToken || token === SyntaxKind.OpenBracketToken);
+        }
+
+        function isLetDeclaration() {
+            // It is let declaration if in strict mode or next token is identifier\open bracket\open curly on same line.
+            // otherwise it needs to be treated like identifier
+            return inStrictModeContext() || lookAhead(nextTokenIsIdentifierOrStartOfDestructuringOnTheSameLine);
         }
 
         function parseStatement(): Statement {
+            return <Statement>parseModuleElementOfKind(StatementFlags.Statement);
+        }
+
+        function parseModuleElement(): ModuleElement {
+            return parseModuleElementOfKind(StatementFlags.StatementOrModuleElement);
+        }
+
+        function parseSourceElement(): ModuleElement {
+            return parseModuleElementOfKind(StatementFlags.StatementOrModuleElement);
+        }
+
+        function parseModuleElementOfKind(flags: StatementFlags): ModuleElement {
             switch (token) {
-                case SyntaxKind.OpenBraceToken:
-                    return parseBlock(/*ignoreMissingOpenBrace:*/ false, /*checkForStrictMode:*/ false);
-                case SyntaxKind.VarKeyword:
-                case SyntaxKind.ConstKeyword:
-                    // const here should always be parsed as const declaration because of check in 'isStatement'
-                    return parseVariableStatement(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers:*/ undefined);
-                case SyntaxKind.FunctionKeyword:
-                    return parseFunctionDeclaration(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers:*/ undefined);
-                case SyntaxKind.ClassKeyword:
-                    return parseClassDeclaration(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers:*/ undefined);
                 case SyntaxKind.SemicolonToken:
                     return parseEmptyStatement();
+                case SyntaxKind.OpenBraceToken:
+                    return parseBlock(/*ignoreMissingOpenBrace*/ false, /*checkForStrictMode*/ false);
+                case SyntaxKind.VarKeyword:
+                    return parseVariableStatement(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers*/ undefined);
+                case SyntaxKind.LetKeyword:
+                    if (isLetDeclaration()) {
+                        return parseVariableStatement(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers*/ undefined);
+                    }
+                    break;
+                case SyntaxKind.FunctionKeyword:
+                    return parseFunctionDeclaration(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers*/ undefined);
+                case SyntaxKind.ClassKeyword:
+                    return parseClassDeclaration(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers*/ undefined);
                 case SyntaxKind.IfKeyword:
                     return parseIfStatement();
                 case SyntaxKind.DoKeyword:
@@ -3911,61 +3979,69 @@ module ts {
                     return parseTryStatement();
                 case SyntaxKind.DebuggerKeyword:
                     return parseDebuggerStatement();
-                case SyntaxKind.LetKeyword:
-                    // If let follows identifier on the same line, it is declaration parse it as variable statement
-                    if (isLetDeclaration()) {
-                        return parseVariableStatement(scanner.getStartPos(), /*decorators*/ undefined, /*modifiers:*/ undefined);
+                case SyntaxKind.AtToken:
+                    return parseDeclaration();
+                case SyntaxKind.ConstKeyword:
+                case SyntaxKind.DeclareKeyword:
+                case SyntaxKind.EnumKeyword:
+                case SyntaxKind.ExportKeyword:
+                case SyntaxKind.ImportKeyword:
+                case SyntaxKind.InterfaceKeyword:
+                case SyntaxKind.ModuleKeyword:
+                case SyntaxKind.NamespaceKeyword:
+                case SyntaxKind.PrivateKeyword:
+                case SyntaxKind.ProtectedKeyword:
+                case SyntaxKind.PublicKeyword:
+                case SyntaxKind.StaticKeyword:
+                case SyntaxKind.TypeKeyword:
+                    if (getDeclarationFlags() & flags) {
+                        return parseDeclaration();
                     }
-                // Else parse it like identifier - fall through
-                default:
-                    // Functions and variable statements are allowed as a statement.  But as per
-                    // the grammar, they also allow modifiers.  So we have to check for those
-                    // statements that might be following modifiers.  This ensures that things
-                    // work properly when incrementally parsing as the parser will produce the
-                    // same FunctionDeclaraiton or VariableStatement if it has the same text
-                    // regardless of whether it is inside a block or not.
-                    // Even though variable statements and function declarations cannot have decorators, 
-                    // we parse them here to provide better error recovery.
-                    if (isModifier(token) || token === SyntaxKind.AtToken) {
-                        let result = tryParse(parseVariableStatementOrFunctionDeclarationOrClassDeclarationWithDecoratorsOrModifiers);
-                        if (result) {
-                            return result;
-                        }
-                    }
-
-                    return parseExpressionOrLabeledStatement();
+                    break;
             }
+            return parseExpressionOrLabeledStatement();
         }
 
-        function parseVariableStatementOrFunctionDeclarationOrClassDeclarationWithDecoratorsOrModifiers(): FunctionDeclaration | VariableStatement | ClassDeclaration {
-            let start = scanner.getStartPos();
+        function parseDeclaration(): ModuleElement {
+            let fullStart = getNodePos();
             let decorators = parseDecorators();
             let modifiers = parseModifiers();
             switch (token) {
-                case SyntaxKind.ConstKeyword:
-                    let nextTokenIsEnum = lookAhead(nextTokenIsEnumKeyword)
-                    if (nextTokenIsEnum) {
-                        return undefined;
-                    }
-                    return parseVariableStatement(start, decorators, modifiers);
-
-                case SyntaxKind.LetKeyword:
-                    if (!isLetDeclaration()) {
-                        return undefined;
-                    }
-                    return parseVariableStatement(start, decorators, modifiers);
-
                 case SyntaxKind.VarKeyword:
-                    return parseVariableStatement(start, decorators, modifiers);
-
+                case SyntaxKind.LetKeyword:
+                case SyntaxKind.ConstKeyword:
+                    return parseVariableStatement(fullStart, decorators, modifiers);
                 case SyntaxKind.FunctionKeyword:
-                    return parseFunctionDeclaration(start, decorators, modifiers);
-
+                    return parseFunctionDeclaration(fullStart, decorators, modifiers);
                 case SyntaxKind.ClassKeyword:
-                    return parseClassDeclaration(start, decorators, modifiers);
+                    return parseClassDeclaration(fullStart, decorators, modifiers);
+                case SyntaxKind.InterfaceKeyword:
+                    return parseInterfaceDeclaration(fullStart, decorators, modifiers);
+                case SyntaxKind.TypeKeyword:
+                    return parseTypeAliasDeclaration(fullStart, decorators, modifiers);
+                case SyntaxKind.EnumKeyword:
+                    return parseEnumDeclaration(fullStart, decorators, modifiers);
+                case SyntaxKind.ModuleKeyword:
+                case SyntaxKind.NamespaceKeyword:
+                    return parseModuleDeclaration(fullStart, decorators, modifiers);
+                case SyntaxKind.ImportKeyword:
+                    return parseImportDeclarationOrImportEqualsDeclaration(fullStart, decorators, modifiers);
+                case SyntaxKind.ExportKeyword:
+                    nextToken();
+                    return token === SyntaxKind.DefaultKeyword || token === SyntaxKind.EqualsToken ?
+                        parseExportAssignment(fullStart, decorators, modifiers) :
+                        parseExportDeclaration(fullStart, decorators, modifiers);
+                default:
+                    if (decorators) {
+                        // We reached this point because we encountered decorators and/or modifiers and assumed a declaration
+                        // would follow. For recovery and error reporting purposes, return an incomplete declaration.                        
+                        let node = <ModuleElement>createMissingNode(SyntaxKind.MissingDeclaration, /*reportAtCurrentPosition*/ true, Diagnostics.Declaration_expected);
+                        node.pos = fullStart;
+                        node.decorators = decorators;
+                        setModifiers(node, modifiers);
+                        return finishNode(node);
+                    }
             }
-
-            return undefined;
         }
 
         function parseFunctionBlockOrSemicolon(isGenerator: boolean, diagnosticMessage?: DiagnosticMessage): Block {
@@ -3974,7 +4050,7 @@ module ts {
                 return;
             }
 
-            return parseFunctionBlock(isGenerator, /*ignoreMissingOpenBrace:*/ false, diagnosticMessage);
+            return parseFunctionBlock(isGenerator, /*ignoreMissingOpenBrace*/ false, diagnosticMessage);
         }
 
         // DECLARATIONS
@@ -4097,7 +4173,7 @@ module ts {
             let node = <VariableStatement>createNode(SyntaxKind.VariableStatement, fullStart);
             node.decorators = decorators;
             setModifiers(node, modifiers);
-            node.declarationList = parseVariableDeclarationList(/*inForStatementInitializer:*/ false);
+            node.declarationList = parseVariableDeclarationList(/*inForStatementInitializer*/ false);
             parseSemicolon();
             return finishNode(node);
         }
@@ -4109,7 +4185,7 @@ module ts {
             parseExpected(SyntaxKind.FunctionKeyword);
             node.asteriskToken = parseOptionalToken(SyntaxKind.AsteriskToken);
             node.name = node.flags & NodeFlags.Default ? parseOptionalIdentifier() : parseIdentifier();
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ !!node.asteriskToken, /*requireCompleteParameterList:*/ false, node);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ !!node.asteriskToken, /*requireCompleteParameterList*/ false, node);
             node.body = parseFunctionBlockOrSemicolon(!!node.asteriskToken, Diagnostics.or_expected);
             return finishNode(node);
         }
@@ -4119,8 +4195,8 @@ module ts {
             node.decorators = decorators;
             setModifiers(node, modifiers);
             parseExpected(SyntaxKind.ConstructorKeyword);
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ false, /*requireCompleteParameterList:*/ false, node);
-            node.body = parseFunctionBlockOrSemicolon(/*isGenerator:*/ false, Diagnostics.or_expected);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ false, /*requireCompleteParameterList*/ false, node);
+            node.body = parseFunctionBlockOrSemicolon(/*isGenerator*/ false, Diagnostics.or_expected);
             return finishNode(node);
         }
 
@@ -4131,7 +4207,7 @@ module ts {
             method.asteriskToken = asteriskToken;
             method.name = name;
             method.questionToken = questionToken;
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ !!asteriskToken, /*requireCompleteParameterList:*/ false, method);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ !!asteriskToken, /*requireCompleteParameterList*/ false, method);
             method.body = parseFunctionBlockOrSemicolon(!!asteriskToken, diagnosticMessage);
             return finishNode(method);
         }
@@ -4185,8 +4261,8 @@ module ts {
             node.decorators = decorators;
             setModifiers(node, modifiers);
             node.name = parsePropertyName();
-            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext:*/ false, /*requireCompleteParameterList:*/ false, node);
-            node.body = parseFunctionBlockOrSemicolon(/*isGenerator:*/ false);
+            fillSignature(SyntaxKind.ColonToken, /*yieldAndGeneratorParameterContext*/ false, /*requireCompleteParameterList*/ false, node);
+            node.body = parseFunctionBlockOrSemicolon(/*isGenerator*/ false);
             return finishNode(node);
         }
 
@@ -4365,9 +4441,9 @@ module ts {
 
         function parseClassExpression(): ClassExpression {
             return <ClassExpression>parseClassDeclarationOrExpression(
-                /*fullStart:*/ scanner.getStartPos(),
-                /*decorators:*/ undefined,
-                /*modifiers:*/ undefined,
+                /*fullStart*/ scanner.getStartPos(),
+                /*decorators*/ undefined,
+                /*modifiers*/ undefined,
                 SyntaxKind.ClassExpression);
         }
 
@@ -4386,7 +4462,7 @@ module ts {
             parseExpected(SyntaxKind.ClassKeyword);
             node.name = parseOptionalIdentifier();
             node.typeParameters = parseTypeParameters();
-            node.heritageClauses = parseHeritageClauses(/*isClassHeritageClause:*/ true);
+            node.heritageClauses = parseHeritageClauses(/*isClassHeritageClause*/ true);
 
             if (parseExpected(SyntaxKind.OpenBraceToken)) {
                 // ClassTail[Yield,GeneratorParameter] : See 14.5
@@ -4422,7 +4498,7 @@ module ts {
         }
 
         function parseHeritageClausesWorker() {
-            return parseList(ParsingContext.HeritageClauses, /*checkForStrictMode:*/ false, parseHeritageClause);
+            return parseList(ParsingContext.HeritageClauses, /*checkForStrictMode*/ false, parseHeritageClause);
         }
 
         function parseHeritageClause() {
@@ -4462,7 +4538,7 @@ module ts {
             parseExpected(SyntaxKind.InterfaceKeyword);
             node.name = parseIdentifier();
             node.typeParameters = parseTypeParameters();
-            node.heritageClauses = parseHeritageClauses(/*isClassHeritageClause:*/ false);
+            node.heritageClauses = parseHeritageClauses(/*isClassHeritageClause*/ false);
             node.members = parseObjectTypeMembers();
             return finishNode(node);
         }
@@ -4525,7 +4601,7 @@ module ts {
             node.flags |= flags;
             node.name = parseIdentifier();
             node.body = parseOptional(SyntaxKind.DotToken)
-                ? parseModuleOrNamespaceDeclaration(getNodePos(), /*decorators*/ undefined, /*modifiers:*/undefined, NodeFlags.Export)
+                ? parseModuleOrNamespaceDeclaration(getNodePos(), /*decorators*/ undefined, /*modifiers*/ undefined, NodeFlags.Export)
                 : parseModuleBlock();
             return finishNode(node);
         }
@@ -4534,7 +4610,7 @@ module ts {
             let node = <ModuleDeclaration>createNode(SyntaxKind.ModuleDeclaration, fullStart);
             node.decorators = decorators;
             setModifiers(node, modifiers);
-            node.name = parseLiteralNode(/*internName:*/ true);
+            node.name = parseLiteralNode(/*internName*/ true);
             node.body = parseModuleBlock();
             return finishNode(node);
         }
@@ -4761,151 +4837,6 @@ module ts {
             return finishNode(node);
         }
 
-        function isLetDeclaration() {
-            // It is let declaration if in strict mode or next token is identifier\open bracket\open curly on same line.
-            // otherwise it needs to be treated like identifier
-            return inStrictModeContext() || lookAhead(nextTokenIsIdentifierOrStartOfDestructuringOnTheSameLine);
-        }
-
-        function isDeclarationStart(followsModifier?: boolean): boolean {
-            switch (token) {
-                case SyntaxKind.VarKeyword:
-                case SyntaxKind.ConstKeyword:
-                case SyntaxKind.FunctionKeyword:
-                    return true;
-                case SyntaxKind.LetKeyword:
-                    return isLetDeclaration();
-                case SyntaxKind.ClassKeyword:
-                case SyntaxKind.InterfaceKeyword:
-                case SyntaxKind.EnumKeyword:
-                case SyntaxKind.TypeKeyword:
-                    // Not true keywords so ensure an identifier follows
-                    return lookAhead(nextTokenIsIdentifierOrKeyword);
-                case SyntaxKind.ImportKeyword:
-                    // Not true keywords so ensure an identifier follows or is string literal or asterisk or open brace
-                    return lookAhead(nextTokenCanFollowImportKeyword);
-                case SyntaxKind.ModuleKeyword:
-                case SyntaxKind.NamespaceKeyword:
-                    // Not a true keyword so ensure an identifier or string literal follows
-                    return lookAhead(nextTokenIsIdentifierOrKeywordOrStringLiteral);
-                case SyntaxKind.ExportKeyword:
-                    // Check for export assignment or modifier on source element
-                    return lookAhead(nextTokenCanFollowExportKeyword);
-                case SyntaxKind.DeclareKeyword:
-                case SyntaxKind.PublicKeyword:
-                case SyntaxKind.PrivateKeyword:
-                case SyntaxKind.ProtectedKeyword:
-                case SyntaxKind.StaticKeyword:
-                    // Check for modifier on source element
-                    return lookAhead(nextTokenIsDeclarationStart);
-                case SyntaxKind.AtToken:
-                    // a lookahead here is too costly, and decorators are only valid on a declaration. 
-                    // We will assume we are parsing a declaration here and report an error later
-                    return !followsModifier;
-            }
-        }
-
-        function isIdentifierOrKeyword() {
-            return token >= SyntaxKind.Identifier;
-        }
-
-        function nextTokenIsIdentifierOrKeyword() {
-            nextToken();
-            return isIdentifierOrKeyword();
-        }
-
-        function nextTokenIsIdentifierOrKeywordOrStringLiteral() {
-            nextToken();
-            return isIdentifierOrKeyword() || token === SyntaxKind.StringLiteral;
-        }
-
-        function nextTokenCanFollowImportKeyword() {
-            nextToken();
-            return isIdentifierOrKeyword() || token === SyntaxKind.StringLiteral ||
-                token === SyntaxKind.AsteriskToken || token === SyntaxKind.OpenBraceToken;
-        }
-
-        function nextTokenCanFollowExportKeyword() {
-            nextToken();
-            return token === SyntaxKind.EqualsToken || token === SyntaxKind.AsteriskToken ||
-                token === SyntaxKind.OpenBraceToken || token === SyntaxKind.DefaultKeyword || isDeclarationStart(/*followsModifier*/ true);
-        }
-
-        function nextTokenIsDeclarationStart() {
-            nextToken();
-            return isDeclarationStart(/*followsModifier*/ true);
-        }
-
-        function nextTokenIsAsKeyword() {
-            return nextToken() === SyntaxKind.AsKeyword;
-        }
-
-        function parseDeclaration(): ModuleElement {
-            let fullStart = getNodePos();
-            let decorators = parseDecorators();
-            let modifiers = parseModifiers();
-            if (token === SyntaxKind.ExportKeyword) {
-                nextToken();
-                if (token === SyntaxKind.DefaultKeyword || token === SyntaxKind.EqualsToken) {
-                    return parseExportAssignment(fullStart, decorators, modifiers);
-                }
-                if (token === SyntaxKind.AsteriskToken || token === SyntaxKind.OpenBraceToken) {
-                    return parseExportDeclaration(fullStart, decorators, modifiers);
-                }
-            }
-
-            switch (token) {
-                case SyntaxKind.VarKeyword:
-                case SyntaxKind.LetKeyword:
-                case SyntaxKind.ConstKeyword:
-                    return parseVariableStatement(fullStart, decorators, modifiers);
-                case SyntaxKind.FunctionKeyword:
-                    return parseFunctionDeclaration(fullStart, decorators, modifiers);
-                case SyntaxKind.ClassKeyword:
-                    return parseClassDeclaration(fullStart, decorators, modifiers);
-                case SyntaxKind.InterfaceKeyword:
-                    return parseInterfaceDeclaration(fullStart, decorators, modifiers);
-                case SyntaxKind.TypeKeyword:
-                    return parseTypeAliasDeclaration(fullStart, decorators, modifiers);
-                case SyntaxKind.EnumKeyword:
-                    return parseEnumDeclaration(fullStart, decorators, modifiers);
-                case SyntaxKind.ModuleKeyword:
-                case SyntaxKind.NamespaceKeyword:
-                    return parseModuleDeclaration(fullStart, decorators, modifiers);
-                case SyntaxKind.ImportKeyword:
-                    return parseImportDeclarationOrImportEqualsDeclaration(fullStart, decorators, modifiers);
-                default:
-                    if (decorators) {
-                        // We reached this point because we encountered an AtToken and assumed a declaration would
-                        // follow. For recovery and error reporting purposes, return an incomplete declaration.                        
-                        let node = <ModuleElement>createMissingNode(SyntaxKind.MissingDeclaration, /*reportAtCurrentPosition*/ true, Diagnostics.Declaration_expected);
-                        node.pos = fullStart;
-                        node.decorators = decorators;
-                        setModifiers(node, modifiers);
-                        return finishNode(node);
-                    }
-                    Debug.fail("Mismatch between isDeclarationStart and parseDeclaration");
-            }
-        }
-
-        function isSourceElement(inErrorRecovery: boolean): boolean {
-            return isDeclarationStart() || isStartOfStatement(inErrorRecovery);
-        }
-
-        function parseSourceElement() {
-            return parseSourceElementOrModuleElement();
-        }
-
-        function parseModuleElement() {
-            return parseSourceElementOrModuleElement();
-        }
-
-        function parseSourceElementOrModuleElement(): ModuleElement {
-            return isDeclarationStart()
-                ? parseDeclaration()
-                : parseStatement();
-        }
-
         function processReferenceComments(sourceFile: SourceFile): void {
             let triviaScanner = createScanner(sourceFile.languageVersion, /*skipTrivia*/false, sourceText);
             let referencedFiles: FileReference[] = [];
@@ -5912,7 +5843,7 @@ module ts {
                 if (child.pos > changeRangeOldEnd) {
                     // Node is entirely past the change range.  We need to move both its pos and
                     // end, forward or backward appropriately.
-                    moveElementEntirelyPastChangeRange(child, /*isArray:*/ false, delta, oldText, newText, aggressiveChecks);
+                    moveElementEntirelyPastChangeRange(child, /*isArray*/ false, delta, oldText, newText, aggressiveChecks);
                     return;
                 }
 
@@ -5941,7 +5872,7 @@ module ts {
                 if (array.pos > changeRangeOldEnd) {
                     // Array is entirely after the change range.  We need to move it, and move any of
                     // its children.
-                    moveElementEntirelyPastChangeRange(array, /*isArray:*/ true, delta, oldText, newText, aggressiveChecks);
+                    moveElementEntirelyPastChangeRange(array, /*isArray*/ true, delta, oldText, newText, aggressiveChecks);
                     return;
                 }
 
diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index 3d52d096b0..14e53ee8f7 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -917,7 +917,7 @@ module ts {
         _classElementBrand: any;
     }
 
-    export interface InterfaceDeclaration extends Declaration, ModuleElement {
+    export interface InterfaceDeclaration extends Declaration, Statement {
         name: Identifier;
         typeParameters?: NodeArray<TypeParameterDeclaration>;
         heritageClauses?: NodeArray<HeritageClause>;
@@ -929,7 +929,7 @@ module ts {
         types?: NodeArray<ExpressionWithTypeArguments>;
     }
 
-    export interface TypeAliasDeclaration extends Declaration, ModuleElement {
+    export interface TypeAliasDeclaration extends Declaration, Statement {
         name: Identifier;
         type: TypeNode;
     }
@@ -941,7 +941,7 @@ module ts {
         initializer?: Expression;
     }
 
-    export interface EnumDeclaration extends Declaration, ModuleElement {
+    export interface EnumDeclaration extends Declaration, Statement {
         name: Identifier;
         members: NodeArray<EnumMember>;
     }
@@ -1626,6 +1626,8 @@ module ts {
     // Class and interface types (TypeFlags.Class and TypeFlags.Interface)
     export interface InterfaceType extends ObjectType {
         typeParameters: TypeParameter[];           // Type parameters (undefined if non-generic)
+        outerTypeParameters: TypeParameter[];      // Outer type parameters (undefined if none)
+        localTypeParameters: TypeParameter[];      // Local type parameters (undefined if none)
     }
 
     export interface InterfaceTypeWithBaseTypes extends InterfaceType {
diff --git a/tests/baselines/reference/classDeclarationBlockScoping1.errors.txt b/tests/baselines/reference/classDeclarationBlockScoping1.errors.txt
deleted file mode 100644
index 4f15007bb2..0000000000
--- a/tests/baselines/reference/classDeclarationBlockScoping1.errors.txt
+++ /dev/null
@@ -1,13 +0,0 @@
-tests/cases/compiler/classDeclarationBlockScoping1.ts(5,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-
-
-==== tests/cases/compiler/classDeclarationBlockScoping1.ts (1 errors) ====
-    class C {
-    }
-    
-    {
-        class C {
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-        }
-    }
\ No newline at end of file
diff --git a/tests/baselines/reference/classDeclarationBlockScoping1.symbols b/tests/baselines/reference/classDeclarationBlockScoping1.symbols
new file mode 100644
index 0000000000..645d327e25
--- /dev/null
+++ b/tests/baselines/reference/classDeclarationBlockScoping1.symbols
@@ -0,0 +1,10 @@
+=== tests/cases/compiler/classDeclarationBlockScoping1.ts ===
+class C {
+>C : Symbol(C, Decl(classDeclarationBlockScoping1.ts, 0, 0))
+}
+
+{
+    class C {
+>C : Symbol(C, Decl(classDeclarationBlockScoping1.ts, 3, 1))
+    }
+}
diff --git a/tests/baselines/reference/classDeclarationBlockScoping1.types b/tests/baselines/reference/classDeclarationBlockScoping1.types
new file mode 100644
index 0000000000..9020ca4a23
--- /dev/null
+++ b/tests/baselines/reference/classDeclarationBlockScoping1.types
@@ -0,0 +1,10 @@
+=== tests/cases/compiler/classDeclarationBlockScoping1.ts ===
+class C {
+>C : C
+}
+
+{
+    class C {
+>C : C
+    }
+}
diff --git a/tests/baselines/reference/classDeclarationBlockScoping2.errors.txt b/tests/baselines/reference/classDeclarationBlockScoping2.errors.txt
deleted file mode 100644
index 2a9885e110..0000000000
--- a/tests/baselines/reference/classDeclarationBlockScoping2.errors.txt
+++ /dev/null
@@ -1,18 +0,0 @@
-tests/cases/compiler/classDeclarationBlockScoping2.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-tests/cases/compiler/classDeclarationBlockScoping2.ts(5,15): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-
-
-==== tests/cases/compiler/classDeclarationBlockScoping2.ts (2 errors) ====
-    function f() {
-        class C {}
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-        var c1 = C;
-        {
-            class C {}
-                  ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-            var c2 = C;
-        }
-        return C === c1;
-    }
\ No newline at end of file
diff --git a/tests/baselines/reference/classDeclarationBlockScoping2.symbols b/tests/baselines/reference/classDeclarationBlockScoping2.symbols
new file mode 100644
index 0000000000..cece47c3ee
--- /dev/null
+++ b/tests/baselines/reference/classDeclarationBlockScoping2.symbols
@@ -0,0 +1,22 @@
+=== tests/cases/compiler/classDeclarationBlockScoping2.ts ===
+function f() {
+>f : Symbol(f, Decl(classDeclarationBlockScoping2.ts, 0, 0))
+
+    class C {}
+>C : Symbol(C, Decl(classDeclarationBlockScoping2.ts, 0, 14))
+
+    var c1 = C;
+>c1 : Symbol(c1, Decl(classDeclarationBlockScoping2.ts, 2, 7))
+>C : Symbol(C, Decl(classDeclarationBlockScoping2.ts, 0, 14))
+    {
+        class C {}
+>C : Symbol(C, Decl(classDeclarationBlockScoping2.ts, 3, 5))
+
+        var c2 = C;
+>c2 : Symbol(c2, Decl(classDeclarationBlockScoping2.ts, 5, 11))
+>C : Symbol(C, Decl(classDeclarationBlockScoping2.ts, 3, 5))
+    }
+    return C === c1;
+>C : Symbol(C, Decl(classDeclarationBlockScoping2.ts, 0, 14))
+>c1 : Symbol(c1, Decl(classDeclarationBlockScoping2.ts, 2, 7))
+}
diff --git a/tests/baselines/reference/classDeclarationBlockScoping2.types b/tests/baselines/reference/classDeclarationBlockScoping2.types
new file mode 100644
index 0000000000..0431d4dd2f
--- /dev/null
+++ b/tests/baselines/reference/classDeclarationBlockScoping2.types
@@ -0,0 +1,23 @@
+=== tests/cases/compiler/classDeclarationBlockScoping2.ts ===
+function f() {
+>f : () => boolean
+
+    class C {}
+>C : C
+
+    var c1 = C;
+>c1 : typeof C
+>C : typeof C
+    {
+        class C {}
+>C : C
+
+        var c2 = C;
+>c2 : typeof C
+>C : typeof C
+    }
+    return C === c1;
+>C === c1 : boolean
+>C : typeof C
+>c1 : typeof C
+}
diff --git a/tests/baselines/reference/classExpressionTest1.errors.txt b/tests/baselines/reference/classExpressionTest1.errors.txt
deleted file mode 100644
index 4d7e1cda63..0000000000
--- a/tests/baselines/reference/classExpressionTest1.errors.txt
+++ /dev/null
@@ -1,18 +0,0 @@
-tests/cases/compiler/classExpressionTest1.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-
-
-==== tests/cases/compiler/classExpressionTest1.ts (1 errors) ====
-    function M() {
-        class C<X> {
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-            f<T>() {
-                var t: T;
-                var x: X;
-                return { t, x };
-            }
-        }
-    
-        var v = new C<number>();
-        return v.f<string>();
-    }
\ No newline at end of file
diff --git a/tests/baselines/reference/classExpressionTest1.symbols b/tests/baselines/reference/classExpressionTest1.symbols
new file mode 100644
index 0000000000..684ee30289
--- /dev/null
+++ b/tests/baselines/reference/classExpressionTest1.symbols
@@ -0,0 +1,35 @@
+=== tests/cases/compiler/classExpressionTest1.ts ===
+function M() {
+>M : Symbol(M, Decl(classExpressionTest1.ts, 0, 0))
+
+    class C<X> {
+>C : Symbol(C, Decl(classExpressionTest1.ts, 0, 14))
+>X : Symbol(X, Decl(classExpressionTest1.ts, 1, 12))
+
+        f<T>() {
+>f : Symbol(f, Decl(classExpressionTest1.ts, 1, 16))
+>T : Symbol(T, Decl(classExpressionTest1.ts, 2, 10))
+
+            var t: T;
+>t : Symbol(t, Decl(classExpressionTest1.ts, 3, 15))
+>T : Symbol(T, Decl(classExpressionTest1.ts, 2, 10))
+
+            var x: X;
+>x : Symbol(x, Decl(classExpressionTest1.ts, 4, 15))
+>X : Symbol(X, Decl(classExpressionTest1.ts, 1, 12))
+
+            return { t, x };
+>t : Symbol(t, Decl(classExpressionTest1.ts, 5, 20))
+>x : Symbol(x, Decl(classExpressionTest1.ts, 5, 23))
+        }
+    }
+
+    var v = new C<number>();
+>v : Symbol(v, Decl(classExpressionTest1.ts, 9, 7))
+>C : Symbol(C, Decl(classExpressionTest1.ts, 0, 14))
+
+    return v.f<string>();
+>v.f : Symbol(C.f, Decl(classExpressionTest1.ts, 1, 16))
+>v : Symbol(v, Decl(classExpressionTest1.ts, 9, 7))
+>f : Symbol(C.f, Decl(classExpressionTest1.ts, 1, 16))
+}
diff --git a/tests/baselines/reference/classExpressionTest1.types b/tests/baselines/reference/classExpressionTest1.types
new file mode 100644
index 0000000000..bf1ae0f2f7
--- /dev/null
+++ b/tests/baselines/reference/classExpressionTest1.types
@@ -0,0 +1,38 @@
+=== tests/cases/compiler/classExpressionTest1.ts ===
+function M() {
+>M : () => { t: string; x: number; }
+
+    class C<X> {
+>C : C<X>
+>X : X
+
+        f<T>() {
+>f : <T>() => { t: T; x: X; }
+>T : T
+
+            var t: T;
+>t : T
+>T : T
+
+            var x: X;
+>x : X
+>X : X
+
+            return { t, x };
+>{ t, x } : { t: T; x: X; }
+>t : T
+>x : X
+        }
+    }
+
+    var v = new C<number>();
+>v : C<number>
+>new C<number>() : C<number>
+>C : typeof C
+
+    return v.f<string>();
+>v.f<string>() : { t: string; x: number; }
+>v.f : <T>() => { t: T; x: number; }
+>v : C<number>
+>f : <T>() => { t: T; x: number; }
+}
diff --git a/tests/baselines/reference/classInsideBlock.errors.txt b/tests/baselines/reference/classInsideBlock.errors.txt
deleted file mode 100644
index 369e77735e..0000000000
--- a/tests/baselines/reference/classInsideBlock.errors.txt
+++ /dev/null
@@ -1,9 +0,0 @@
-tests/cases/conformance/classes/classDeclarations/classInsideBlock.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-
-
-==== tests/cases/conformance/classes/classDeclarations/classInsideBlock.ts (1 errors) ====
-    function foo() {
-        class C { }
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
-    }
\ No newline at end of file
diff --git a/tests/baselines/reference/classInsideBlock.symbols b/tests/baselines/reference/classInsideBlock.symbols
new file mode 100644
index 0000000000..5f96dd1b75
--- /dev/null
+++ b/tests/baselines/reference/classInsideBlock.symbols
@@ -0,0 +1,7 @@
+=== tests/cases/conformance/classes/classDeclarations/classInsideBlock.ts ===
+function foo() {
+>foo : Symbol(foo, Decl(classInsideBlock.ts, 0, 0))
+
+    class C { }
+>C : Symbol(C, Decl(classInsideBlock.ts, 0, 16))
+}
diff --git a/tests/baselines/reference/classInsideBlock.types b/tests/baselines/reference/classInsideBlock.types
new file mode 100644
index 0000000000..7db5653c47
--- /dev/null
+++ b/tests/baselines/reference/classInsideBlock.types
@@ -0,0 +1,7 @@
+=== tests/cases/conformance/classes/classDeclarations/classInsideBlock.ts ===
+function foo() {
+>foo : () => void
+
+    class C { }
+>C : C
+}
diff --git a/tests/baselines/reference/functionsWithModifiersInBlocks1.errors.txt b/tests/baselines/reference/functionsWithModifiersInBlocks1.errors.txt
index 94e246f897..f6240f5e69 100644
--- a/tests/baselines/reference/functionsWithModifiersInBlocks1.errors.txt
+++ b/tests/baselines/reference/functionsWithModifiersInBlocks1.errors.txt
@@ -4,12 +4,11 @@ tests/cases/compiler/functionsWithModifiersInBlocks1.ts(2,25): error TS1184: An
 tests/cases/compiler/functionsWithModifiersInBlocks1.ts(3,4): error TS1184: Modifiers cannot appear here.
 tests/cases/compiler/functionsWithModifiersInBlocks1.ts(3,20): error TS2393: Duplicate function implementation.
 tests/cases/compiler/functionsWithModifiersInBlocks1.ts(4,4): error TS1184: Modifiers cannot appear here.
-tests/cases/compiler/functionsWithModifiersInBlocks1.ts(4,12): error TS1029: 'export' modifier must precede 'declare' modifier.
 tests/cases/compiler/functionsWithModifiersInBlocks1.ts(4,28): error TS2393: Duplicate function implementation.
 tests/cases/compiler/functionsWithModifiersInBlocks1.ts(4,32): error TS1184: An implementation cannot be declared in ambient contexts.
 
 
-==== tests/cases/compiler/functionsWithModifiersInBlocks1.ts (9 errors) ====
+==== tests/cases/compiler/functionsWithModifiersInBlocks1.ts (8 errors) ====
     {
        declare function f() { }
        ~~~~~~~
@@ -26,8 +25,6 @@ tests/cases/compiler/functionsWithModifiersInBlocks1.ts(4,32): error TS1184: An
        declare export function f() { }
        ~~~~~~~
 !!! error TS1184: Modifiers cannot appear here.
-               ~~~~~~
-!!! error TS1029: 'export' modifier must precede 'declare' modifier.
                                ~
 !!! error TS2393: Duplicate function implementation.
                                    ~
diff --git a/tests/baselines/reference/generatorTypeCheck39.errors.txt b/tests/baselines/reference/generatorTypeCheck39.errors.txt
index e44812cef0..eb89fa2329 100644
--- a/tests/baselines/reference/generatorTypeCheck39.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck39.errors.txt
@@ -1,27 +1,18 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(5,5): error TS1129: Statement expected.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(5,6): error TS2346: Supplied parameters do not match any signature of call target.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(5,16): error TS2304: Cannot find name 'yield'.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(5,22): error TS1005: ',' expected.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(9,1): error TS1128: Declaration or statement expected.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(5,16): error TS1163: A 'yield' expression is only allowed in a generator body.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts(7,13): error TS1163: A 'yield' expression is only allowed in a generator body.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts (5 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck39.ts (2 errors) ====
     function decorator(x: any) {
         return y => { };
     }
     function* g() {
         @decorator(yield 0)
-        ~
-!!! error TS1129: Statement expected.
-         ~~~~~~~~~~~~~~~~~~
-!!! error TS2346: Supplied parameters do not match any signature of call target.
                    ~~~~~
-!!! error TS2304: Cannot find name 'yield'.
-                         ~
-!!! error TS1005: ',' expected.
+!!! error TS1163: A 'yield' expression is only allowed in a generator body.
         class C {
             x = yield 0;
+                ~~~~~
+!!! error TS1163: A 'yield' expression is only allowed in a generator body.
         }
-    }
-    ~
-!!! error TS1128: Declaration or statement expected.
\ No newline at end of file
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck39.js b/tests/baselines/reference/generatorTypeCheck39.js
index 0fbf5e2cfe..e6d25045a7 100644
--- a/tests/baselines/reference/generatorTypeCheck39.js
+++ b/tests/baselines/reference/generatorTypeCheck39.js
@@ -21,12 +21,13 @@ var __decorate = (this && this.__decorate) || function (decorators, target, key,
 function decorator(x) {
     return y => { };
 }
-function* g() { }
-let C = class {
-    constructor() {
-        this.x = yield 0;
-    }
-};
-C = __decorate([
-    decorator(yield, 0)
-], C);
+function* g() {
+    let C = class {
+        constructor() {
+            this.x = yield 0;
+        }
+    };
+    C = __decorate([
+        decorator(yield 0)
+    ], C);
+}
diff --git a/tests/baselines/reference/generatorTypeCheck40.errors.txt b/tests/baselines/reference/generatorTypeCheck40.errors.txt
index 4d3880ad4a..9d9676e5d2 100644
--- a/tests/baselines/reference/generatorTypeCheck40.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck40.errors.txt
@@ -1,12 +1,9 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck40.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
 tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck40.ts(2,21): error TS9002: Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck40.ts (2 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck40.ts (1 errors) ====
     function* g() {
         class C extends (yield 0) { }
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
                         ~~~~~~~~~
 !!! error TS9002: Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses.
     }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck57.errors.txt b/tests/baselines/reference/generatorTypeCheck57.errors.txt
index c2fe00d736..aa39e534d6 100644
--- a/tests/baselines/reference/generatorTypeCheck57.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck57.errors.txt
@@ -1,12 +1,9 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
 tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts(3,13): error TS1163: A 'yield' expression is only allowed in a generator body.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts (2 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck57.ts (1 errors) ====
     function* g() {
         class C {
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
             x = yield 0;
                 ~~~~~
 !!! error TS1163: A 'yield' expression is only allowed in a generator body.
diff --git a/tests/baselines/reference/generatorTypeCheck58.errors.txt b/tests/baselines/reference/generatorTypeCheck58.errors.txt
index bc8ed76941..7407c83b34 100644
--- a/tests/baselines/reference/generatorTypeCheck58.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck58.errors.txt
@@ -1,12 +1,9 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
 tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts(3,20): error TS1163: A 'yield' expression is only allowed in a generator body.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts (2 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck58.ts (1 errors) ====
     function* g() {
         class C {
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
             static x = yield 0;
                        ~~~~~
 !!! error TS1163: A 'yield' expression is only allowed in a generator body.
diff --git a/tests/baselines/reference/generatorTypeCheck59.errors.txt b/tests/baselines/reference/generatorTypeCheck59.errors.txt
index 3368b79d99..7f2c9b8752 100644
--- a/tests/baselines/reference/generatorTypeCheck59.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck59.errors.txt
@@ -1,12 +1,9 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
 tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts(3,11): error TS1163: A 'yield' expression is only allowed in a generator body.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts (2 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck59.ts (1 errors) ====
     function* g() {
         class C {
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
             @(yield "")
               ~~~~~
 !!! error TS1163: A 'yield' expression is only allowed in a generator body.
diff --git a/tests/baselines/reference/generatorTypeCheck60.errors.txt b/tests/baselines/reference/generatorTypeCheck60.errors.txt
index 39724d9ac6..d8e5d640bb 100644
--- a/tests/baselines/reference/generatorTypeCheck60.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck60.errors.txt
@@ -1,12 +1,9 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts(2,11): error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
 tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts(2,21): error TS9002: Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts (2 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck60.ts (1 errors) ====
     function* g() {
         class C extends (yield) {};
-              ~
-!!! error TS9004: 'class' declarations are only supported directly inside a module or as a top level declaration.
                         ~~~~~~~
 !!! error TS9002: Only identifiers/qualified-names with optional type arguments are currently supported in a class 'extends' clauses.
     }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck61.errors.txt b/tests/baselines/reference/generatorTypeCheck61.errors.txt
index 3c9f3819d6..87e844dbfb 100644
--- a/tests/baselines/reference/generatorTypeCheck61.errors.txt
+++ b/tests/baselines/reference/generatorTypeCheck61.errors.txt
@@ -1,22 +1,10 @@
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,5): error TS1129: Statement expected.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,12): error TS1146: Declaration expected.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,13): error TS1005: ')' expected.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,14): error TS1005: ';' expected.
-tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(4,1): error TS1128: Declaration or statement expected.
+tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts(2,7): error TS1163: A 'yield' expression is only allowed in a generator body.
 
 
-==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts (5 errors) ====
+==== tests/cases/conformance/es6/yieldExpressions/generatorTypeCheck61.ts (1 errors) ====
     function * g() {
         @(yield 0)
-        ~
-!!! error TS1129: Statement expected.
-               
-!!! error TS1146: Declaration expected.
-                ~
-!!! error TS1005: ')' expected.
-                 ~
-!!! error TS1005: ';' expected.
+          ~~~~~
+!!! error TS1163: A 'yield' expression is only allowed in a generator body.
         class C {};
-    }
-    ~
-!!! error TS1128: Declaration or statement expected.
\ No newline at end of file
+    }
\ No newline at end of file
diff --git a/tests/baselines/reference/generatorTypeCheck61.js b/tests/baselines/reference/generatorTypeCheck61.js
index 591e52f269..9e2f067f9f 100644
--- a/tests/baselines/reference/generatorTypeCheck61.js
+++ b/tests/baselines/reference/generatorTypeCheck61.js
@@ -5,8 +5,19 @@ function * g() {
 }
 
 //// [generatorTypeCheck61.js]
-function* g() { }
-0;
-class C {
+var __decorate = (this && this.__decorate) || function (decorators, target, key, desc) {
+    if (typeof Reflect === "object" && typeof Reflect.decorate === "function") return Reflect.decorate(decorators, target, key, desc);
+    switch (arguments.length) {
+        case 2: return decorators.reduceRight(function(o, d) { return (d && d(o)) || o; }, target);
+        case 3: return decorators.reduceRight(function(o, d) { return (d && d(target, key)), void 0; }, void 0);
+        case 4: return decorators.reduceRight(function(o, d) { return (d && d(target, key, o)) || o; }, desc);
+    }
+};
+function* g() {
+    let C = class {
+    };
+    C = __decorate([
+        (yield 0)
+    ], C);
+    ;
 }
-;
diff --git a/tests/baselines/reference/localTypes1.js b/tests/baselines/reference/localTypes1.js
new file mode 100644
index 0000000000..d1c3758920
--- /dev/null
+++ b/tests/baselines/reference/localTypes1.js
@@ -0,0 +1,325 @@
+//// [localTypes1.ts]
+
+function f1() {
+    enum E {
+        A, B, C
+    }
+    class C {
+        x: E;
+    }
+    interface I {
+        x: E;
+    }
+    type A = I[];
+    let a: A = [new C()];
+    a[0].x = E.B;
+    return a;
+}
+
+function f2() {
+    function g() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        interface I {
+            x: E;
+        }
+        type A = I[];
+        let a: A = [new C()];
+        a[0].x = E.B;
+        return a;
+    }
+    return g();
+}
+
+function f3(b: boolean) {
+    if (true) {
+        enum E {
+            A, B, C
+        }
+        if (b) {
+            class C {
+                x: E;
+            }
+            interface I {
+                x: E;
+            }
+            type A = I[];
+            let a: A = [new C()];
+            a[0].x = E.B;
+            return a;
+        }
+        else {
+            class A {
+                x: E;
+            }
+            interface J {
+                x: E;
+            }
+            type C = J[];
+            let c: C = [new A()];
+            c[0].x = E.B;
+            return c;
+        }
+    }
+}
+
+function f5() {
+    var z1 = function () {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+    var z2 = () => {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+}
+
+class A {
+    constructor() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+    }
+    m() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+    get p() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+}
+
+function f6() {
+    class A {
+        a: string;
+    }
+    function g() {
+        class B extends A {
+            b: string;
+        }
+        function h() {
+            class C extends B {
+                c: string;
+            }
+            var x = new C();
+            x.a = "a";
+            x.b = "b";
+            x.c = "c";
+            return x;
+        }
+        return h();
+    }
+    return g();
+}
+
+
+//// [localTypes1.js]
+var __extends = (this && this.__extends) || function (d, b) {
+    for (var p in b) if (b.hasOwnProperty(p)) d[p] = b[p];
+    function __() { this.constructor = d; }
+    __.prototype = b.prototype;
+    d.prototype = new __();
+};
+function f1() {
+    var E;
+    (function (E) {
+        E[E["A"] = 0] = "A";
+        E[E["B"] = 1] = "B";
+        E[E["C"] = 2] = "C";
+    })(E || (E = {}));
+    var C = (function () {
+        function C() {
+        }
+        return C;
+    })();
+    var a = [new C()];
+    a[0].x = E.B;
+    return a;
+}
+function f2() {
+    function g() {
+        var E;
+        (function (E) {
+            E[E["A"] = 0] = "A";
+            E[E["B"] = 1] = "B";
+            E[E["C"] = 2] = "C";
+        })(E || (E = {}));
+        var C = (function () {
+            function C() {
+            }
+            return C;
+        })();
+        var a = [new C()];
+        a[0].x = E.B;
+        return a;
+    }
+    return g();
+}
+function f3(b) {
+    if (true) {
+        var E;
+        (function (E) {
+            E[E["A"] = 0] = "A";
+            E[E["B"] = 1] = "B";
+            E[E["C"] = 2] = "C";
+        })(E || (E = {}));
+        if (b) {
+            var C = (function () {
+                function C() {
+                }
+                return C;
+            })();
+            var a = [new C()];
+            a[0].x = E.B;
+            return a;
+        }
+        else {
+            var A = (function () {
+                function A() {
+                }
+                return A;
+            })();
+            var c = [new A()];
+            c[0].x = E.B;
+            return c;
+        }
+    }
+}
+function f5() {
+    var z1 = function () {
+        var E;
+        (function (E) {
+            E[E["A"] = 0] = "A";
+            E[E["B"] = 1] = "B";
+            E[E["C"] = 2] = "C";
+        })(E || (E = {}));
+        var C = (function () {
+            function C() {
+            }
+            return C;
+        })();
+        return new C();
+    };
+    var z2 = function () {
+        var E;
+        (function (E) {
+            E[E["A"] = 0] = "A";
+            E[E["B"] = 1] = "B";
+            E[E["C"] = 2] = "C";
+        })(E || (E = {}));
+        var C = (function () {
+            function C() {
+            }
+            return C;
+        })();
+        return new C();
+    };
+}
+var A = (function () {
+    function A() {
+        var E;
+        (function (E) {
+            E[E["A"] = 0] = "A";
+            E[E["B"] = 1] = "B";
+            E[E["C"] = 2] = "C";
+        })(E || (E = {}));
+        var C = (function () {
+            function C() {
+            }
+            return C;
+        })();
+    }
+    A.prototype.m = function () {
+        var E;
+        (function (E) {
+            E[E["A"] = 0] = "A";
+            E[E["B"] = 1] = "B";
+            E[E["C"] = 2] = "C";
+        })(E || (E = {}));
+        var C = (function () {
+            function C() {
+            }
+            return C;
+        })();
+        return new C();
+    };
+    Object.defineProperty(A.prototype, "p", {
+        get: function () {
+            var E;
+            (function (E) {
+                E[E["A"] = 0] = "A";
+                E[E["B"] = 1] = "B";
+                E[E["C"] = 2] = "C";
+            })(E || (E = {}));
+            var C = (function () {
+                function C() {
+                }
+                return C;
+            })();
+            return new C();
+        },
+        enumerable: true,
+        configurable: true
+    });
+    return A;
+})();
+function f6() {
+    var A = (function () {
+        function A() {
+        }
+        return A;
+    })();
+    function g() {
+        var B = (function (_super) {
+            __extends(B, _super);
+            function B() {
+                _super.apply(this, arguments);
+            }
+            return B;
+        })(A);
+        function h() {
+            var C = (function (_super) {
+                __extends(C, _super);
+                function C() {
+                    _super.apply(this, arguments);
+                }
+                return C;
+            })(B);
+            var x = new C();
+            x.a = "a";
+            x.b = "b";
+            x.c = "c";
+            return x;
+        }
+        return h();
+    }
+    return g();
+}
diff --git a/tests/baselines/reference/localTypes1.symbols b/tests/baselines/reference/localTypes1.symbols
new file mode 100644
index 0000000000..53d4191ae6
--- /dev/null
+++ b/tests/baselines/reference/localTypes1.symbols
@@ -0,0 +1,357 @@
+=== tests/cases/conformance/types/localTypes/localTypes1.ts ===
+
+function f1() {
+>f1 : Symbol(f1, Decl(localTypes1.ts, 0, 0))
+
+    enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 1, 15))
+
+        A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 2, 12))
+>B : Symbol(E.B, Decl(localTypes1.ts, 3, 10))
+>C : Symbol(E.C, Decl(localTypes1.ts, 3, 13))
+    }
+    class C {
+>C : Symbol(C, Decl(localTypes1.ts, 4, 5))
+
+        x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 5, 13))
+>E : Symbol(E, Decl(localTypes1.ts, 1, 15))
+    }
+    interface I {
+>I : Symbol(I, Decl(localTypes1.ts, 7, 5))
+
+        x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 8, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 1, 15))
+    }
+    type A = I[];
+>A : Symbol(A, Decl(localTypes1.ts, 10, 5))
+>I : Symbol(I, Decl(localTypes1.ts, 7, 5))
+
+    let a: A = [new C()];
+>a : Symbol(a, Decl(localTypes1.ts, 12, 7))
+>A : Symbol(A, Decl(localTypes1.ts, 10, 5))
+>C : Symbol(C, Decl(localTypes1.ts, 4, 5))
+
+    a[0].x = E.B;
+>a[0].x : Symbol(I.x, Decl(localTypes1.ts, 8, 17))
+>a : Symbol(a, Decl(localTypes1.ts, 12, 7))
+>x : Symbol(I.x, Decl(localTypes1.ts, 8, 17))
+>E.B : Symbol(E.B, Decl(localTypes1.ts, 3, 10))
+>E : Symbol(E, Decl(localTypes1.ts, 1, 15))
+>B : Symbol(E.B, Decl(localTypes1.ts, 3, 10))
+
+    return a;
+>a : Symbol(a, Decl(localTypes1.ts, 12, 7))
+}
+
+function f2() {
+>f2 : Symbol(f2, Decl(localTypes1.ts, 15, 1))
+
+    function g() {
+>g : Symbol(g, Decl(localTypes1.ts, 17, 15))
+
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 18, 18))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 19, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 20, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 20, 17))
+        }
+        class C {
+>C : Symbol(C, Decl(localTypes1.ts, 21, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 22, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 18, 18))
+        }
+        interface I {
+>I : Symbol(I, Decl(localTypes1.ts, 24, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 25, 21))
+>E : Symbol(E, Decl(localTypes1.ts, 18, 18))
+        }
+        type A = I[];
+>A : Symbol(A, Decl(localTypes1.ts, 27, 9))
+>I : Symbol(I, Decl(localTypes1.ts, 24, 9))
+
+        let a: A = [new C()];
+>a : Symbol(a, Decl(localTypes1.ts, 29, 11))
+>A : Symbol(A, Decl(localTypes1.ts, 27, 9))
+>C : Symbol(C, Decl(localTypes1.ts, 21, 9))
+
+        a[0].x = E.B;
+>a[0].x : Symbol(I.x, Decl(localTypes1.ts, 25, 21))
+>a : Symbol(a, Decl(localTypes1.ts, 29, 11))
+>x : Symbol(I.x, Decl(localTypes1.ts, 25, 21))
+>E.B : Symbol(E.B, Decl(localTypes1.ts, 20, 14))
+>E : Symbol(E, Decl(localTypes1.ts, 18, 18))
+>B : Symbol(E.B, Decl(localTypes1.ts, 20, 14))
+
+        return a;
+>a : Symbol(a, Decl(localTypes1.ts, 29, 11))
+    }
+    return g();
+>g : Symbol(g, Decl(localTypes1.ts, 17, 15))
+}
+
+function f3(b: boolean) {
+>f3 : Symbol(f3, Decl(localTypes1.ts, 34, 1))
+>b : Symbol(b, Decl(localTypes1.ts, 36, 12))
+
+    if (true) {
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 38, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 39, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 39, 17))
+        }
+        if (b) {
+>b : Symbol(b, Decl(localTypes1.ts, 36, 12))
+
+            class C {
+>C : Symbol(C, Decl(localTypes1.ts, 41, 16))
+
+                x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 42, 21))
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+            }
+            interface I {
+>I : Symbol(I, Decl(localTypes1.ts, 44, 13))
+
+                x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 45, 25))
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+            }
+            type A = I[];
+>A : Symbol(A, Decl(localTypes1.ts, 47, 13))
+>I : Symbol(I, Decl(localTypes1.ts, 44, 13))
+
+            let a: A = [new C()];
+>a : Symbol(a, Decl(localTypes1.ts, 49, 15))
+>A : Symbol(A, Decl(localTypes1.ts, 47, 13))
+>C : Symbol(C, Decl(localTypes1.ts, 41, 16))
+
+            a[0].x = E.B;
+>a[0].x : Symbol(I.x, Decl(localTypes1.ts, 45, 25))
+>a : Symbol(a, Decl(localTypes1.ts, 49, 15))
+>x : Symbol(I.x, Decl(localTypes1.ts, 45, 25))
+>E.B : Symbol(E.B, Decl(localTypes1.ts, 39, 14))
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+>B : Symbol(E.B, Decl(localTypes1.ts, 39, 14))
+
+            return a;
+>a : Symbol(a, Decl(localTypes1.ts, 49, 15))
+        }
+        else {
+            class A {
+>A : Symbol(A, Decl(localTypes1.ts, 53, 14))
+
+                x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 54, 21))
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+            }
+            interface J {
+>J : Symbol(J, Decl(localTypes1.ts, 56, 13))
+
+                x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 57, 25))
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+            }
+            type C = J[];
+>C : Symbol(C, Decl(localTypes1.ts, 59, 13))
+>J : Symbol(J, Decl(localTypes1.ts, 56, 13))
+
+            let c: C = [new A()];
+>c : Symbol(c, Decl(localTypes1.ts, 61, 15))
+>C : Symbol(C, Decl(localTypes1.ts, 59, 13))
+>A : Symbol(A, Decl(localTypes1.ts, 53, 14))
+
+            c[0].x = E.B;
+>c[0].x : Symbol(J.x, Decl(localTypes1.ts, 57, 25))
+>c : Symbol(c, Decl(localTypes1.ts, 61, 15))
+>x : Symbol(J.x, Decl(localTypes1.ts, 57, 25))
+>E.B : Symbol(E.B, Decl(localTypes1.ts, 39, 14))
+>E : Symbol(E, Decl(localTypes1.ts, 37, 15))
+>B : Symbol(E.B, Decl(localTypes1.ts, 39, 14))
+
+            return c;
+>c : Symbol(c, Decl(localTypes1.ts, 61, 15))
+        }
+    }
+}
+
+function f5() {
+>f5 : Symbol(f5, Decl(localTypes1.ts, 66, 1))
+
+    var z1 = function () {
+>z1 : Symbol(z1, Decl(localTypes1.ts, 69, 7))
+
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 69, 26))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 70, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 71, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 71, 17))
+        }
+        class C {
+>C : Symbol(C, Decl(localTypes1.ts, 72, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 73, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 69, 26))
+        }
+        return new C();
+>C : Symbol(C, Decl(localTypes1.ts, 72, 9))
+    }
+    var z2 = () => {
+>z2 : Symbol(z2, Decl(localTypes1.ts, 78, 7))
+
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 78, 20))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 79, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 80, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 80, 17))
+        }
+        class C {
+>C : Symbol(C, Decl(localTypes1.ts, 81, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 82, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 78, 20))
+        }
+        return new C();
+>C : Symbol(C, Decl(localTypes1.ts, 81, 9))
+    }
+}
+
+class A {
+>A : Symbol(A, Decl(localTypes1.ts, 87, 1))
+
+    constructor() {
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 90, 19))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 91, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 92, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 92, 17))
+        }
+        class C {
+>C : Symbol(C, Decl(localTypes1.ts, 93, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 94, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 90, 19))
+        }
+    }
+    m() {
+>m : Symbol(m, Decl(localTypes1.ts, 97, 5))
+
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 98, 9))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 99, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 100, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 100, 17))
+        }
+        class C {
+>C : Symbol(C, Decl(localTypes1.ts, 101, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 102, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 98, 9))
+        }
+        return new C();
+>C : Symbol(C, Decl(localTypes1.ts, 101, 9))
+    }
+    get p() {
+>p : Symbol(p, Decl(localTypes1.ts, 106, 5))
+
+        enum E {
+>E : Symbol(E, Decl(localTypes1.ts, 107, 13))
+
+            A, B, C
+>A : Symbol(E.A, Decl(localTypes1.ts, 108, 16))
+>B : Symbol(E.B, Decl(localTypes1.ts, 109, 14))
+>C : Symbol(E.C, Decl(localTypes1.ts, 109, 17))
+        }
+        class C {
+>C : Symbol(C, Decl(localTypes1.ts, 110, 9))
+
+            x: E;
+>x : Symbol(x, Decl(localTypes1.ts, 111, 17))
+>E : Symbol(E, Decl(localTypes1.ts, 107, 13))
+        }
+        return new C();
+>C : Symbol(C, Decl(localTypes1.ts, 110, 9))
+    }
+}
+
+function f6() {
+>f6 : Symbol(f6, Decl(localTypes1.ts, 116, 1))
+
+    class A {
+>A : Symbol(A, Decl(localTypes1.ts, 118, 15))
+
+        a: string;
+>a : Symbol(a, Decl(localTypes1.ts, 119, 13))
+    }
+    function g() {
+>g : Symbol(g, Decl(localTypes1.ts, 121, 5))
+
+        class B extends A {
+>B : Symbol(B, Decl(localTypes1.ts, 122, 18))
+>A : Symbol(A, Decl(localTypes1.ts, 118, 15))
+
+            b: string;
+>b : Symbol(b, Decl(localTypes1.ts, 123, 27))
+        }
+        function h() {
+>h : Symbol(h, Decl(localTypes1.ts, 125, 9))
+
+            class C extends B {
+>C : Symbol(C, Decl(localTypes1.ts, 126, 22))
+>B : Symbol(B, Decl(localTypes1.ts, 122, 18))
+
+                c: string;
+>c : Symbol(c, Decl(localTypes1.ts, 127, 31))
+            }
+            var x = new C();
+>x : Symbol(x, Decl(localTypes1.ts, 130, 15))
+>C : Symbol(C, Decl(localTypes1.ts, 126, 22))
+
+            x.a = "a";
+>x.a : Symbol(A.a, Decl(localTypes1.ts, 119, 13))
+>x : Symbol(x, Decl(localTypes1.ts, 130, 15))
+>a : Symbol(A.a, Decl(localTypes1.ts, 119, 13))
+
+            x.b = "b";
+>x.b : Symbol(B.b, Decl(localTypes1.ts, 123, 27))
+>x : Symbol(x, Decl(localTypes1.ts, 130, 15))
+>b : Symbol(B.b, Decl(localTypes1.ts, 123, 27))
+
+            x.c = "c";
+>x.c : Symbol(C.c, Decl(localTypes1.ts, 127, 31))
+>x : Symbol(x, Decl(localTypes1.ts, 130, 15))
+>c : Symbol(C.c, Decl(localTypes1.ts, 127, 31))
+
+            return x;
+>x : Symbol(x, Decl(localTypes1.ts, 130, 15))
+        }
+        return h();
+>h : Symbol(h, Decl(localTypes1.ts, 125, 9))
+    }
+    return g();
+>g : Symbol(g, Decl(localTypes1.ts, 121, 5))
+}
+
diff --git a/tests/baselines/reference/localTypes1.types b/tests/baselines/reference/localTypes1.types
new file mode 100644
index 0000000000..1770a36edb
--- /dev/null
+++ b/tests/baselines/reference/localTypes1.types
@@ -0,0 +1,395 @@
+=== tests/cases/conformance/types/localTypes/localTypes1.ts ===
+
+function f1() {
+>f1 : () => I[]
+
+    enum E {
+>E : E
+
+        A, B, C
+>A : E
+>B : E
+>C : E
+    }
+    class C {
+>C : C
+
+        x: E;
+>x : E
+>E : E
+    }
+    interface I {
+>I : I
+
+        x: E;
+>x : E
+>E : E
+    }
+    type A = I[];
+>A : I[]
+>I : I
+
+    let a: A = [new C()];
+>a : I[]
+>A : I[]
+>[new C()] : C[]
+>new C() : C
+>C : typeof C
+
+    a[0].x = E.B;
+>a[0].x = E.B : E
+>a[0].x : E
+>a[0] : I
+>a : I[]
+>0 : number
+>x : E
+>E.B : E
+>E : typeof E
+>B : E
+
+    return a;
+>a : I[]
+}
+
+function f2() {
+>f2 : () => I[]
+
+    function g() {
+>g : () => I[]
+
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        class C {
+>C : C
+
+            x: E;
+>x : E
+>E : E
+        }
+        interface I {
+>I : I
+
+            x: E;
+>x : E
+>E : E
+        }
+        type A = I[];
+>A : I[]
+>I : I
+
+        let a: A = [new C()];
+>a : I[]
+>A : I[]
+>[new C()] : C[]
+>new C() : C
+>C : typeof C
+
+        a[0].x = E.B;
+>a[0].x = E.B : E
+>a[0].x : E
+>a[0] : I
+>a : I[]
+>0 : number
+>x : E
+>E.B : E
+>E : typeof E
+>B : E
+
+        return a;
+>a : I[]
+    }
+    return g();
+>g() : I[]
+>g : () => I[]
+}
+
+function f3(b: boolean) {
+>f3 : (b: boolean) => I[]
+>b : boolean
+
+    if (true) {
+>true : boolean
+
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        if (b) {
+>b : boolean
+
+            class C {
+>C : C
+
+                x: E;
+>x : E
+>E : E
+            }
+            interface I {
+>I : I
+
+                x: E;
+>x : E
+>E : E
+            }
+            type A = I[];
+>A : I[]
+>I : I
+
+            let a: A = [new C()];
+>a : I[]
+>A : I[]
+>[new C()] : C[]
+>new C() : C
+>C : typeof C
+
+            a[0].x = E.B;
+>a[0].x = E.B : E
+>a[0].x : E
+>a[0] : I
+>a : I[]
+>0 : number
+>x : E
+>E.B : E
+>E : typeof E
+>B : E
+
+            return a;
+>a : I[]
+        }
+        else {
+            class A {
+>A : A
+
+                x: E;
+>x : E
+>E : E
+            }
+            interface J {
+>J : J
+
+                x: E;
+>x : E
+>E : E
+            }
+            type C = J[];
+>C : J[]
+>J : J
+
+            let c: C = [new A()];
+>c : J[]
+>C : J[]
+>[new A()] : A[]
+>new A() : A
+>A : typeof A
+
+            c[0].x = E.B;
+>c[0].x = E.B : E
+>c[0].x : E
+>c[0] : J
+>c : J[]
+>0 : number
+>x : E
+>E.B : E
+>E : typeof E
+>B : E
+
+            return c;
+>c : J[]
+        }
+    }
+}
+
+function f5() {
+>f5 : () => void
+
+    var z1 = function () {
+>z1 : () => C
+>function () {        enum E {            A, B, C        }        class C {            x: E;        }        return new C();    } : () => C
+
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        class C {
+>C : C
+
+            x: E;
+>x : E
+>E : E
+        }
+        return new C();
+>new C() : C
+>C : typeof C
+    }
+    var z2 = () => {
+>z2 : () => C
+>() => {        enum E {            A, B, C        }        class C {            x: E;        }        return new C();    } : () => C
+
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        class C {
+>C : C
+
+            x: E;
+>x : E
+>E : E
+        }
+        return new C();
+>new C() : C
+>C : typeof C
+    }
+}
+
+class A {
+>A : A
+
+    constructor() {
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        class C {
+>C : C
+
+            x: E;
+>x : E
+>E : E
+        }
+    }
+    m() {
+>m : () => C
+
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        class C {
+>C : C
+
+            x: E;
+>x : E
+>E : E
+        }
+        return new C();
+>new C() : C
+>C : typeof C
+    }
+    get p() {
+>p : C
+
+        enum E {
+>E : E
+
+            A, B, C
+>A : E
+>B : E
+>C : E
+        }
+        class C {
+>C : C
+
+            x: E;
+>x : E
+>E : E
+        }
+        return new C();
+>new C() : C
+>C : typeof C
+    }
+}
+
+function f6() {
+>f6 : () => C
+
+    class A {
+>A : A
+
+        a: string;
+>a : string
+    }
+    function g() {
+>g : () => C
+
+        class B extends A {
+>B : B
+>A : A
+
+            b: string;
+>b : string
+        }
+        function h() {
+>h : () => C
+
+            class C extends B {
+>C : C
+>B : B
+
+                c: string;
+>c : string
+            }
+            var x = new C();
+>x : C
+>new C() : C
+>C : typeof C
+
+            x.a = "a";
+>x.a = "a" : string
+>x.a : string
+>x : C
+>a : string
+>"a" : string
+
+            x.b = "b";
+>x.b = "b" : string
+>x.b : string
+>x : C
+>b : string
+>"b" : string
+
+            x.c = "c";
+>x.c = "c" : string
+>x.c : string
+>x : C
+>c : string
+>"c" : string
+
+            return x;
+>x : C
+        }
+        return h();
+>h() : C
+>h : () => C
+    }
+    return g();
+>g() : C
+>g : () => C
+}
+
diff --git a/tests/baselines/reference/localTypes2.js b/tests/baselines/reference/localTypes2.js
new file mode 100644
index 0000000000..a95844f079
--- /dev/null
+++ b/tests/baselines/reference/localTypes2.js
@@ -0,0 +1,92 @@
+//// [localTypes2.ts]
+function f1() {
+    function f() {
+        class C {
+            constructor(public x: number, public y: number) { }
+        }
+        return C;
+    }
+    let C = f();
+    let v = new C(10, 20);
+    let x = v.x;
+    let y = v.y;
+}
+
+function f2() {
+    function f(x: number) {
+        class C {
+            public x = x;
+            constructor(public y: number) { }
+        }
+        return C;
+    }
+    let C = f(10);
+    let v = new C(20);
+    let x = v.x;
+    let y = v.y;
+}
+
+function f3() {
+    function f(x: number, y: number) {
+        class C {
+            public x = x;
+            public y = y;
+        }
+        return C;
+    }
+    let C = f(10, 20);
+    let v = new C();
+    let x = v.x;
+    let y = v.y;
+}
+
+
+//// [localTypes2.js]
+function f1() {
+    function f() {
+        var C = (function () {
+            function C(x, y) {
+                this.x = x;
+                this.y = y;
+            }
+            return C;
+        })();
+        return C;
+    }
+    var C = f();
+    var v = new C(10, 20);
+    var x = v.x;
+    var y = v.y;
+}
+function f2() {
+    function f(x) {
+        var C = (function () {
+            function C(y) {
+                this.y = y;
+                this.x = x;
+            }
+            return C;
+        })();
+        return C;
+    }
+    var C = f(10);
+    var v = new C(20);
+    var x = v.x;
+    var y = v.y;
+}
+function f3() {
+    function f(x, y) {
+        var C = (function () {
+            function C() {
+                this.x = x;
+                this.y = y;
+            }
+            return C;
+        })();
+        return C;
+    }
+    var C = f(10, 20);
+    var v = new C();
+    var x = v.x;
+    var y = v.y;
+}
diff --git a/tests/baselines/reference/localTypes2.symbols b/tests/baselines/reference/localTypes2.symbols
new file mode 100644
index 0000000000..3054c6f552
--- /dev/null
+++ b/tests/baselines/reference/localTypes2.symbols
@@ -0,0 +1,122 @@
+=== tests/cases/conformance/types/localTypes/localTypes2.ts ===
+function f1() {
+>f1 : Symbol(f1, Decl(localTypes2.ts, 0, 0))
+
+    function f() {
+>f : Symbol(f, Decl(localTypes2.ts, 0, 15))
+
+        class C {
+>C : Symbol(C, Decl(localTypes2.ts, 1, 18))
+
+            constructor(public x: number, public y: number) { }
+>x : Symbol(x, Decl(localTypes2.ts, 3, 24))
+>y : Symbol(y, Decl(localTypes2.ts, 3, 41))
+        }
+        return C;
+>C : Symbol(C, Decl(localTypes2.ts, 1, 18))
+    }
+    let C = f();
+>C : Symbol(C, Decl(localTypes2.ts, 7, 7))
+>f : Symbol(f, Decl(localTypes2.ts, 0, 15))
+
+    let v = new C(10, 20);
+>v : Symbol(v, Decl(localTypes2.ts, 8, 7))
+>C : Symbol(C, Decl(localTypes2.ts, 7, 7))
+
+    let x = v.x;
+>x : Symbol(x, Decl(localTypes2.ts, 9, 7))
+>v.x : Symbol(C.x, Decl(localTypes2.ts, 3, 24))
+>v : Symbol(v, Decl(localTypes2.ts, 8, 7))
+>x : Symbol(C.x, Decl(localTypes2.ts, 3, 24))
+
+    let y = v.y;
+>y : Symbol(y, Decl(localTypes2.ts, 10, 7))
+>v.y : Symbol(C.y, Decl(localTypes2.ts, 3, 41))
+>v : Symbol(v, Decl(localTypes2.ts, 8, 7))
+>y : Symbol(C.y, Decl(localTypes2.ts, 3, 41))
+}
+
+function f2() {
+>f2 : Symbol(f2, Decl(localTypes2.ts, 11, 1))
+
+    function f(x: number) {
+>f : Symbol(f, Decl(localTypes2.ts, 13, 15))
+>x : Symbol(x, Decl(localTypes2.ts, 14, 15))
+
+        class C {
+>C : Symbol(C, Decl(localTypes2.ts, 14, 27))
+
+            public x = x;
+>x : Symbol(x, Decl(localTypes2.ts, 15, 17))
+>x : Symbol(x, Decl(localTypes2.ts, 14, 15))
+
+            constructor(public y: number) { }
+>y : Symbol(y, Decl(localTypes2.ts, 17, 24))
+        }
+        return C;
+>C : Symbol(C, Decl(localTypes2.ts, 14, 27))
+    }
+    let C = f(10);
+>C : Symbol(C, Decl(localTypes2.ts, 21, 7))
+>f : Symbol(f, Decl(localTypes2.ts, 13, 15))
+
+    let v = new C(20);
+>v : Symbol(v, Decl(localTypes2.ts, 22, 7))
+>C : Symbol(C, Decl(localTypes2.ts, 21, 7))
+
+    let x = v.x;
+>x : Symbol(x, Decl(localTypes2.ts, 23, 7))
+>v.x : Symbol(C.x, Decl(localTypes2.ts, 15, 17))
+>v : Symbol(v, Decl(localTypes2.ts, 22, 7))
+>x : Symbol(C.x, Decl(localTypes2.ts, 15, 17))
+
+    let y = v.y;
+>y : Symbol(y, Decl(localTypes2.ts, 24, 7))
+>v.y : Symbol(C.y, Decl(localTypes2.ts, 17, 24))
+>v : Symbol(v, Decl(localTypes2.ts, 22, 7))
+>y : Symbol(C.y, Decl(localTypes2.ts, 17, 24))
+}
+
+function f3() {
+>f3 : Symbol(f3, Decl(localTypes2.ts, 25, 1))
+
+    function f(x: number, y: number) {
+>f : Symbol(f, Decl(localTypes2.ts, 27, 15))
+>x : Symbol(x, Decl(localTypes2.ts, 28, 15))
+>y : Symbol(y, Decl(localTypes2.ts, 28, 25))
+
+        class C {
+>C : Symbol(C, Decl(localTypes2.ts, 28, 38))
+
+            public x = x;
+>x : Symbol(x, Decl(localTypes2.ts, 29, 17))
+>x : Symbol(x, Decl(localTypes2.ts, 28, 15))
+
+            public y = y;
+>y : Symbol(y, Decl(localTypes2.ts, 30, 25))
+>y : Symbol(y, Decl(localTypes2.ts, 28, 25))
+        }
+        return C;
+>C : Symbol(C, Decl(localTypes2.ts, 28, 38))
+    }
+    let C = f(10, 20);
+>C : Symbol(C, Decl(localTypes2.ts, 35, 7))
+>f : Symbol(f, Decl(localTypes2.ts, 27, 15))
+
+    let v = new C();
+>v : Symbol(v, Decl(localTypes2.ts, 36, 7))
+>C : Symbol(C, Decl(localTypes2.ts, 35, 7))
+
+    let x = v.x;
+>x : Symbol(x, Decl(localTypes2.ts, 37, 7))
+>v.x : Symbol(C.x, Decl(localTypes2.ts, 29, 17))
+>v : Symbol(v, Decl(localTypes2.ts, 36, 7))
+>x : Symbol(C.x, Decl(localTypes2.ts, 29, 17))
+
+    let y = v.y;
+>y : Symbol(y, Decl(localTypes2.ts, 38, 7))
+>v.y : Symbol(C.y, Decl(localTypes2.ts, 30, 25))
+>v : Symbol(v, Decl(localTypes2.ts, 36, 7))
+>y : Symbol(C.y, Decl(localTypes2.ts, 30, 25))
+}
+
diff --git a/tests/baselines/reference/localTypes2.types b/tests/baselines/reference/localTypes2.types
new file mode 100644
index 0000000000..a6b85b7bb1
--- /dev/null
+++ b/tests/baselines/reference/localTypes2.types
@@ -0,0 +1,134 @@
+=== tests/cases/conformance/types/localTypes/localTypes2.ts ===
+function f1() {
+>f1 : () => void
+
+    function f() {
+>f : () => typeof C
+
+        class C {
+>C : C
+
+            constructor(public x: number, public y: number) { }
+>x : number
+>y : number
+        }
+        return C;
+>C : typeof C
+    }
+    let C = f();
+>C : typeof C
+>f() : typeof C
+>f : () => typeof C
+
+    let v = new C(10, 20);
+>v : C
+>new C(10, 20) : C
+>C : typeof C
+>10 : number
+>20 : number
+
+    let x = v.x;
+>x : number
+>v.x : number
+>v : C
+>x : number
+
+    let y = v.y;
+>y : number
+>v.y : number
+>v : C
+>y : number
+}
+
+function f2() {
+>f2 : () => void
+
+    function f(x: number) {
+>f : (x: number) => typeof C
+>x : number
+
+        class C {
+>C : C
+
+            public x = x;
+>x : number
+>x : number
+
+            constructor(public y: number) { }
+>y : number
+        }
+        return C;
+>C : typeof C
+    }
+    let C = f(10);
+>C : typeof C
+>f(10) : typeof C
+>f : (x: number) => typeof C
+>10 : number
+
+    let v = new C(20);
+>v : C
+>new C(20) : C
+>C : typeof C
+>20 : number
+
+    let x = v.x;
+>x : number
+>v.x : number
+>v : C
+>x : number
+
+    let y = v.y;
+>y : number
+>v.y : number
+>v : C
+>y : number
+}
+
+function f3() {
+>f3 : () => void
+
+    function f(x: number, y: number) {
+>f : (x: number, y: number) => typeof C
+>x : number
+>y : number
+
+        class C {
+>C : C
+
+            public x = x;
+>x : number
+>x : number
+
+            public y = y;
+>y : number
+>y : number
+        }
+        return C;
+>C : typeof C
+    }
+    let C = f(10, 20);
+>C : typeof C
+>f(10, 20) : typeof C
+>f : (x: number, y: number) => typeof C
+>10 : number
+>20 : number
+
+    let v = new C();
+>v : C
+>new C() : C
+>C : typeof C
+
+    let x = v.x;
+>x : number
+>v.x : number
+>v : C
+>x : number
+
+    let y = v.y;
+>y : number
+>v.y : number
+>v : C
+>y : number
+}
+
diff --git a/tests/baselines/reference/localTypes3.js b/tests/baselines/reference/localTypes3.js
new file mode 100644
index 0000000000..2d40bc922b
--- /dev/null
+++ b/tests/baselines/reference/localTypes3.js
@@ -0,0 +1,92 @@
+//// [localTypes3.ts]
+function f1() {
+    function f() {
+        class C<X, Y> {
+            constructor(public x: X, public y: Y) { }
+        }
+        return C;
+    }
+    let C = f();
+    let v = new C(10, "hello");
+    let x = v.x;
+    let y = v.y;
+}
+
+function f2() {
+    function f<X>(x: X) {
+        class C<Y> {
+            public x = x;
+            constructor(public y: Y) { }
+        }
+        return C;
+    }
+    let C = f(10);
+    let v = new C("hello");
+    let x = v.x;
+    let y = v.y;
+}
+
+function f3() {
+    function f<X, Y>(x: X, y: Y) {
+        class C {
+            public x = x;
+            public y = y;
+        }
+        return C;
+    }
+    let C = f(10, "hello");
+    let v = new C();
+    let x = v.x;
+    let y = v.y;
+}
+
+
+//// [localTypes3.js]
+function f1() {
+    function f() {
+        var C = (function () {
+            function C(x, y) {
+                this.x = x;
+                this.y = y;
+            }
+            return C;
+        })();
+        return C;
+    }
+    var C = f();
+    var v = new C(10, "hello");
+    var x = v.x;
+    var y = v.y;
+}
+function f2() {
+    function f(x) {
+        var C = (function () {
+            function C(y) {
+                this.y = y;
+                this.x = x;
+            }
+            return C;
+        })();
+        return C;
+    }
+    var C = f(10);
+    var v = new C("hello");
+    var x = v.x;
+    var y = v.y;
+}
+function f3() {
+    function f(x, y) {
+        var C = (function () {
+            function C() {
+                this.x = x;
+                this.y = y;
+            }
+            return C;
+        })();
+        return C;
+    }
+    var C = f(10, "hello");
+    var v = new C();
+    var x = v.x;
+    var y = v.y;
+}
diff --git a/tests/baselines/reference/localTypes3.symbols b/tests/baselines/reference/localTypes3.symbols
new file mode 100644
index 0000000000..fe7082e457
--- /dev/null
+++ b/tests/baselines/reference/localTypes3.symbols
@@ -0,0 +1,134 @@
+=== tests/cases/conformance/types/localTypes/localTypes3.ts ===
+function f1() {
+>f1 : Symbol(f1, Decl(localTypes3.ts, 0, 0))
+
+    function f() {
+>f : Symbol(f, Decl(localTypes3.ts, 0, 15))
+
+        class C<X, Y> {
+>C : Symbol(C, Decl(localTypes3.ts, 1, 18))
+>X : Symbol(X, Decl(localTypes3.ts, 2, 16))
+>Y : Symbol(Y, Decl(localTypes3.ts, 2, 18))
+
+            constructor(public x: X, public y: Y) { }
+>x : Symbol(x, Decl(localTypes3.ts, 3, 24))
+>X : Symbol(X, Decl(localTypes3.ts, 2, 16))
+>y : Symbol(y, Decl(localTypes3.ts, 3, 36))
+>Y : Symbol(Y, Decl(localTypes3.ts, 2, 18))
+        }
+        return C;
+>C : Symbol(C, Decl(localTypes3.ts, 1, 18))
+    }
+    let C = f();
+>C : Symbol(C, Decl(localTypes3.ts, 7, 7))
+>f : Symbol(f, Decl(localTypes3.ts, 0, 15))
+
+    let v = new C(10, "hello");
+>v : Symbol(v, Decl(localTypes3.ts, 8, 7))
+>C : Symbol(C, Decl(localTypes3.ts, 7, 7))
+
+    let x = v.x;
+>x : Symbol(x, Decl(localTypes3.ts, 9, 7))
+>v.x : Symbol(C.x, Decl(localTypes3.ts, 3, 24))
+>v : Symbol(v, Decl(localTypes3.ts, 8, 7))
+>x : Symbol(C.x, Decl(localTypes3.ts, 3, 24))
+
+    let y = v.y;
+>y : Symbol(y, Decl(localTypes3.ts, 10, 7))
+>v.y : Symbol(C.y, Decl(localTypes3.ts, 3, 36))
+>v : Symbol(v, Decl(localTypes3.ts, 8, 7))
+>y : Symbol(C.y, Decl(localTypes3.ts, 3, 36))
+}
+
+function f2() {
+>f2 : Symbol(f2, Decl(localTypes3.ts, 11, 1))
+
+    function f<X>(x: X) {
+>f : Symbol(f, Decl(localTypes3.ts, 13, 15))
+>X : Symbol(X, Decl(localTypes3.ts, 14, 15))
+>x : Symbol(x, Decl(localTypes3.ts, 14, 18))
+>X : Symbol(X, Decl(localTypes3.ts, 14, 15))
+
+        class C<Y> {
+>C : Symbol(C, Decl(localTypes3.ts, 14, 25))
+>Y : Symbol(Y, Decl(localTypes3.ts, 15, 16))
+
+            public x = x;
+>x : Symbol(x, Decl(localTypes3.ts, 15, 20))
+>x : Symbol(x, Decl(localTypes3.ts, 14, 18))
+
+            constructor(public y: Y) { }
+>y : Symbol(y, Decl(localTypes3.ts, 17, 24))
+>Y : Symbol(Y, Decl(localTypes3.ts, 15, 16))
+        }
+        return C;
+>C : Symbol(C, Decl(localTypes3.ts, 14, 25))
+    }
+    let C = f(10);
+>C : Symbol(C, Decl(localTypes3.ts, 21, 7))
+>f : Symbol(f, Decl(localTypes3.ts, 13, 15))
+
+    let v = new C("hello");
+>v : Symbol(v, Decl(localTypes3.ts, 22, 7))
+>C : Symbol(C, Decl(localTypes3.ts, 21, 7))
+
+    let x = v.x;
+>x : Symbol(x, Decl(localTypes3.ts, 23, 7))
+>v.x : Symbol(C.x, Decl(localTypes3.ts, 15, 20))
+>v : Symbol(v, Decl(localTypes3.ts, 22, 7))
+>x : Symbol(C.x, Decl(localTypes3.ts, 15, 20))
+
+    let y = v.y;
+>y : Symbol(y, Decl(localTypes3.ts, 24, 7))
+>v.y : Symbol(C.y, Decl(localTypes3.ts, 17, 24))
+>v : Symbol(v, Decl(localTypes3.ts, 22, 7))
+>y : Symbol(C.y, Decl(localTypes3.ts, 17, 24))
+}
+
+function f3() {
+>f3 : Symbol(f3, Decl(localTypes3.ts, 25, 1))
+
+    function f<X, Y>(x: X, y: Y) {
+>f : Symbol(f, Decl(localTypes3.ts, 27, 15))
+>X : Symbol(X, Decl(localTypes3.ts, 28, 15))
+>Y : Symbol(Y, Decl(localTypes3.ts, 28, 17))
+>x : Symbol(x, Decl(localTypes3.ts, 28, 21))
+>X : Symbol(X, Decl(localTypes3.ts, 28, 15))
+>y : Symbol(y, Decl(localTypes3.ts, 28, 26))
+>Y : Symbol(Y, Decl(localTypes3.ts, 28, 17))
+
+        class C {
+>C : Symbol(C, Decl(localTypes3.ts, 28, 34))
+
+            public x = x;
+>x : Symbol(x, Decl(localTypes3.ts, 29, 17))
+>x : Symbol(x, Decl(localTypes3.ts, 28, 21))
+
+            public y = y;
+>y : Symbol(y, Decl(localTypes3.ts, 30, 25))
+>y : Symbol(y, Decl(localTypes3.ts, 28, 26))
+        }
+        return C;
+>C : Symbol(C, Decl(localTypes3.ts, 28, 34))
+    }
+    let C = f(10, "hello");
+>C : Symbol(C, Decl(localTypes3.ts, 35, 7))
+>f : Symbol(f, Decl(localTypes3.ts, 27, 15))
+
+    let v = new C();
+>v : Symbol(v, Decl(localTypes3.ts, 36, 7))
+>C : Symbol(C, Decl(localTypes3.ts, 35, 7))
+
+    let x = v.x;
+>x : Symbol(x, Decl(localTypes3.ts, 37, 7))
+>v.x : Symbol(C.x, Decl(localTypes3.ts, 29, 17))
+>v : Symbol(v, Decl(localTypes3.ts, 36, 7))
+>x : Symbol(C.x, Decl(localTypes3.ts, 29, 17))
+
+    let y = v.y;
+>y : Symbol(y, Decl(localTypes3.ts, 38, 7))
+>v.y : Symbol(C.y, Decl(localTypes3.ts, 30, 25))
+>v : Symbol(v, Decl(localTypes3.ts, 36, 7))
+>y : Symbol(C.y, Decl(localTypes3.ts, 30, 25))
+}
+
diff --git a/tests/baselines/reference/localTypes3.types b/tests/baselines/reference/localTypes3.types
new file mode 100644
index 0000000000..551096468c
--- /dev/null
+++ b/tests/baselines/reference/localTypes3.types
@@ -0,0 +1,146 @@
+=== tests/cases/conformance/types/localTypes/localTypes3.ts ===
+function f1() {
+>f1 : () => void
+
+    function f() {
+>f : () => typeof C
+
+        class C<X, Y> {
+>C : C<X, Y>
+>X : X
+>Y : Y
+
+            constructor(public x: X, public y: Y) { }
+>x : X
+>X : X
+>y : Y
+>Y : Y
+        }
+        return C;
+>C : typeof C
+    }
+    let C = f();
+>C : typeof C
+>f() : typeof C
+>f : () => typeof C
+
+    let v = new C(10, "hello");
+>v : C<number, string>
+>new C(10, "hello") : C<number, string>
+>C : typeof C
+>10 : number
+>"hello" : string
+
+    let x = v.x;
+>x : number
+>v.x : number
+>v : C<number, string>
+>x : number
+
+    let y = v.y;
+>y : string
+>v.y : string
+>v : C<number, string>
+>y : string
+}
+
+function f2() {
+>f2 : () => void
+
+    function f<X>(x: X) {
+>f : <X>(x: X) => typeof C
+>X : X
+>x : X
+>X : X
+
+        class C<Y> {
+>C : C<Y>
+>Y : Y
+
+            public x = x;
+>x : X
+>x : X
+
+            constructor(public y: Y) { }
+>y : Y
+>Y : Y
+        }
+        return C;
+>C : typeof C
+    }
+    let C = f(10);
+>C : typeof C
+>f(10) : typeof C
+>f : <X>(x: X) => typeof C
+>10 : number
+
+    let v = new C("hello");
+>v : f<number>.C<string>
+>new C("hello") : f<number>.C<string>
+>C : typeof C
+>"hello" : string
+
+    let x = v.x;
+>x : number
+>v.x : number
+>v : f<number>.C<string>
+>x : number
+
+    let y = v.y;
+>y : string
+>v.y : string
+>v : f<number>.C<string>
+>y : string
+}
+
+function f3() {
+>f3 : () => void
+
+    function f<X, Y>(x: X, y: Y) {
+>f : <X, Y>(x: X, y: Y) => typeof C
+>X : X
+>Y : Y
+>x : X
+>X : X
+>y : Y
+>Y : Y
+
+        class C {
+>C : C
+
+            public x = x;
+>x : X
+>x : X
+
+            public y = y;
+>y : Y
+>y : Y
+        }
+        return C;
+>C : typeof C
+    }
+    let C = f(10, "hello");
+>C : typeof C
+>f(10, "hello") : typeof C
+>f : <X, Y>(x: X, y: Y) => typeof C
+>10 : number
+>"hello" : string
+
+    let v = new C();
+>v : f<number, string>.C
+>new C() : f<number, string>.C
+>C : typeof C
+
+    let x = v.x;
+>x : number
+>v.x : number
+>v : f<number, string>.C
+>x : number
+
+    let y = v.y;
+>y : string
+>v.y : string
+>v : f<number, string>.C
+>y : string
+}
+
diff --git a/tests/baselines/reference/localTypes4.errors.txt b/tests/baselines/reference/localTypes4.errors.txt
new file mode 100644
index 0000000000..cad9d30c93
--- /dev/null
+++ b/tests/baselines/reference/localTypes4.errors.txt
@@ -0,0 +1,53 @@
+tests/cases/conformance/types/localTypes/localTypes4.ts(10,19): error TS2304: Cannot find name 'T'.
+tests/cases/conformance/types/localTypes/localTypes4.ts(10,23): error TS2304: Cannot find name 'T'.
+tests/cases/conformance/types/localTypes/localTypes4.ts(18,16): error TS2300: Duplicate identifier 'T'.
+tests/cases/conformance/types/localTypes/localTypes4.ts(19,19): error TS2300: Duplicate identifier 'T'.
+
+
+==== tests/cases/conformance/types/localTypes/localTypes4.ts (4 errors) ====
+    function f1() {
+        // Type parameters are in scope in parameters and return types
+        function f<T>(x: T): T {
+            return undefined;
+        }
+    }
+    
+    function f2() {
+        // Local types are not in scope in parameters and return types
+        function f(x: T): T {
+                      ~
+!!! error TS2304: Cannot find name 'T'.
+                          ~
+!!! error TS2304: Cannot find name 'T'.
+            interface T { }
+            return undefined;
+        }
+    }
+    
+    function f3() {
+        // Type parameters and top-level local types are in same declaration space
+        function f<T>() {
+                   ~
+!!! error TS2300: Duplicate identifier 'T'.
+            interface T { }
+                      ~
+!!! error TS2300: Duplicate identifier 'T'.
+            return undefined;
+        }
+    }
+    
+    function f4() {
+        // Local types are block scoped
+        interface T { x: number }
+        let v: T;
+        v.x = 10;
+        if (true) {
+            interface T { x: string }
+            let v: T;
+            v.x = "hello";
+        }
+        else {
+            v.x = 20;
+        }
+    }
+    
\ No newline at end of file
diff --git a/tests/baselines/reference/localTypes4.js b/tests/baselines/reference/localTypes4.js
new file mode 100644
index 0000000000..8f51761a65
--- /dev/null
+++ b/tests/baselines/reference/localTypes4.js
@@ -0,0 +1,70 @@
+//// [localTypes4.ts]
+function f1() {
+    // Type parameters are in scope in parameters and return types
+    function f<T>(x: T): T {
+        return undefined;
+    }
+}
+
+function f2() {
+    // Local types are not in scope in parameters and return types
+    function f(x: T): T {
+        interface T { }
+        return undefined;
+    }
+}
+
+function f3() {
+    // Type parameters and top-level local types are in same declaration space
+    function f<T>() {
+        interface T { }
+        return undefined;
+    }
+}
+
+function f4() {
+    // Local types are block scoped
+    interface T { x: number }
+    let v: T;
+    v.x = 10;
+    if (true) {
+        interface T { x: string }
+        let v: T;
+        v.x = "hello";
+    }
+    else {
+        v.x = 20;
+    }
+}
+
+
+//// [localTypes4.js]
+function f1() {
+    // Type parameters are in scope in parameters and return types
+    function f(x) {
+        return undefined;
+    }
+}
+function f2() {
+    // Local types are not in scope in parameters and return types
+    function f(x) {
+        return undefined;
+    }
+}
+function f3() {
+    // Type parameters and top-level local types are in same declaration space
+    function f() {
+        return undefined;
+    }
+}
+function f4() {
+    var v;
+    v.x = 10;
+    if (true) {
+        var v_1;
+        v_1.x = "hello";
+    }
+    else {
+        v.x = 20;
+    }
+}
diff --git a/tests/baselines/reference/localTypes5.js b/tests/baselines/reference/localTypes5.js
new file mode 100644
index 0000000000..872629276d
--- /dev/null
+++ b/tests/baselines/reference/localTypes5.js
@@ -0,0 +1,38 @@
+//// [localTypes5.ts]
+function foo<A>() {
+    class X {
+        m<B, C>() {
+            return (function <D>() {
+                class Y<E> {
+                }
+                return new Y<string>();
+            })<Date>();
+        }
+    }
+    var x = new X();
+    return x.m<number, boolean>();
+}
+var x = foo<void>();
+
+
+//// [localTypes5.js]
+function foo() {
+    var X = (function () {
+        function X() {
+        }
+        X.prototype.m = function () {
+            return (function () {
+                var Y = (function () {
+                    function Y() {
+                    }
+                    return Y;
+                })();
+                return new Y();
+            })();
+        };
+        return X;
+    })();
+    var x = new X();
+    return x.m();
+}
+var x = foo();
diff --git a/tests/baselines/reference/localTypes5.symbols b/tests/baselines/reference/localTypes5.symbols
new file mode 100644
index 0000000000..4ffe53b3e5
--- /dev/null
+++ b/tests/baselines/reference/localTypes5.symbols
@@ -0,0 +1,40 @@
+=== tests/cases/conformance/types/localTypes/localTypes5.ts ===
+function foo<A>() {
+>foo : Symbol(foo, Decl(localTypes5.ts, 0, 0))
+>A : Symbol(A, Decl(localTypes5.ts, 0, 13))
+
+    class X {
+>X : Symbol(X, Decl(localTypes5.ts, 0, 19))
+
+        m<B, C>() {
+>m : Symbol(m, Decl(localTypes5.ts, 1, 13))
+>B : Symbol(B, Decl(localTypes5.ts, 2, 10))
+>C : Symbol(C, Decl(localTypes5.ts, 2, 12))
+
+            return (function <D>() {
+>D : Symbol(D, Decl(localTypes5.ts, 3, 30))
+
+                class Y<E> {
+>Y : Symbol(Y, Decl(localTypes5.ts, 3, 36))
+>E : Symbol(E, Decl(localTypes5.ts, 4, 24))
+                }
+                return new Y<string>();
+>Y : Symbol(Y, Decl(localTypes5.ts, 3, 36))
+
+            })<Date>();
+>Date : Symbol(Date, Decl(lib.d.ts, 633, 23), Decl(lib.d.ts, 815, 11))
+        }
+    }
+    var x = new X();
+>x : Symbol(x, Decl(localTypes5.ts, 10, 7))
+>X : Symbol(X, Decl(localTypes5.ts, 0, 19))
+
+    return x.m<number, boolean>();
+>x.m : Symbol(X.m, Decl(localTypes5.ts, 1, 13))
+>x : Symbol(x, Decl(localTypes5.ts, 10, 7))
+>m : Symbol(X.m, Decl(localTypes5.ts, 1, 13))
+}
+var x = foo<void>();
+>x : Symbol(x, Decl(localTypes5.ts, 13, 3))
+>foo : Symbol(foo, Decl(localTypes5.ts, 0, 0))
+
diff --git a/tests/baselines/reference/localTypes5.types b/tests/baselines/reference/localTypes5.types
new file mode 100644
index 0000000000..b12e362f75
--- /dev/null
+++ b/tests/baselines/reference/localTypes5.types
@@ -0,0 +1,47 @@
+=== tests/cases/conformance/types/localTypes/localTypes5.ts ===
+function foo<A>() {
+>foo : <A>() => X.m<number, boolean>.<Date>.Y<string>
+>A : A
+
+    class X {
+>X : X
+
+        m<B, C>() {
+>m : <B, C>() => <Date>.Y<string>
+>B : B
+>C : C
+
+            return (function <D>() {
+>(function <D>() {                class Y<E> {                }                return new Y<string>();            })<Date>() : <Date>.Y<string>
+>(function <D>() {                class Y<E> {                }                return new Y<string>();            }) : <D>() => Y<string>
+>function <D>() {                class Y<E> {                }                return new Y<string>();            } : <D>() => Y<string>
+>D : D
+
+                class Y<E> {
+>Y : Y<E>
+>E : E
+                }
+                return new Y<string>();
+>new Y<string>() : Y<string>
+>Y : typeof Y
+
+            })<Date>();
+>Date : Date
+        }
+    }
+    var x = new X();
+>x : X
+>new X() : X
+>X : typeof X
+
+    return x.m<number, boolean>();
+>x.m<number, boolean>() : X.m<number, boolean>.<Date>.Y<string>
+>x.m : <B, C>() => <Date>.Y<string>
+>x : X
+>m : <B, C>() => <Date>.Y<string>
+}
+var x = foo<void>();
+>x : foo<void>.X.m<number, boolean>.<Date>.Y<string>
+>foo<void>() : foo<void>.X.m<number, boolean>.<Date>.Y<string>
+>foo : <A>() => X.m<number, boolean>.<Date>.Y<string>
+
diff --git a/tests/baselines/reference/withStatementErrors.errors.txt b/tests/baselines/reference/withStatementErrors.errors.txt
index ba399f5119..bfea39b542 100644
--- a/tests/baselines/reference/withStatementErrors.errors.txt
+++ b/tests/baselines/reference/withStatementErrors.errors.txt
@@ -1,5 +1,5 @@
 tests/cases/compiler/withStatementErrors.ts(3,7): error TS2410: All symbols within a 'with' block will be resolved to 'any'.
-tests/cases/compiler/withStatementErrors.ts(13,5): error TS1129: Statement expected.
+tests/cases/compiler/withStatementErrors.ts(15,5): error TS1129: Statement expected.
 tests/cases/compiler/withStatementErrors.ts(17,1): error TS1128: Declaration or statement expected.
 
 
@@ -19,10 +19,10 @@ tests/cases/compiler/withStatementErrors.ts(17,1): error TS1128: Declaration or
         class C {} // error   
         
         interface I {} // error
-        ~~~~~~~~~
-!!! error TS1129: Statement expected.
         
         module M {} // error
+        ~~~~~~
+!!! error TS1129: Statement expected.
             
     }
     ~
diff --git a/tests/baselines/reference/withStatementErrors.js b/tests/baselines/reference/withStatementErrors.js
index 43236c94d8..65b4599946 100644
--- a/tests/baselines/reference/withStatementErrors.js
+++ b/tests/baselines/reference/withStatementErrors.js
@@ -28,5 +28,5 @@ with (ooo.eee.oo.ah_ah.ting.tang.walla.walla) {
         function C() {
         }
         return C;
-    })();
-} // error   
+    })(); // error   
+} // error
diff --git a/tests/cases/conformance/types/localTypes/localTypes1.ts b/tests/cases/conformance/types/localTypes/localTypes1.ts
new file mode 100644
index 0000000000..bceb9ad32c
--- /dev/null
+++ b/tests/cases/conformance/types/localTypes/localTypes1.ts
@@ -0,0 +1,141 @@
+// @target: es5
+
+function f1() {
+    enum E {
+        A, B, C
+    }
+    class C {
+        x: E;
+    }
+    interface I {
+        x: E;
+    }
+    type A = I[];
+    let a: A = [new C()];
+    a[0].x = E.B;
+    return a;
+}
+
+function f2() {
+    function g() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        interface I {
+            x: E;
+        }
+        type A = I[];
+        let a: A = [new C()];
+        a[0].x = E.B;
+        return a;
+    }
+    return g();
+}
+
+function f3(b: boolean) {
+    if (true) {
+        enum E {
+            A, B, C
+        }
+        if (b) {
+            class C {
+                x: E;
+            }
+            interface I {
+                x: E;
+            }
+            type A = I[];
+            let a: A = [new C()];
+            a[0].x = E.B;
+            return a;
+        }
+        else {
+            class A {
+                x: E;
+            }
+            interface J {
+                x: E;
+            }
+            type C = J[];
+            let c: C = [new A()];
+            c[0].x = E.B;
+            return c;
+        }
+    }
+}
+
+function f5() {
+    var z1 = function () {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+    var z2 = () => {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+}
+
+class A {
+    constructor() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+    }
+    m() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+    get p() {
+        enum E {
+            A, B, C
+        }
+        class C {
+            x: E;
+        }
+        return new C();
+    }
+}
+
+function f6() {
+    class A {
+        a: string;
+    }
+    function g() {
+        class B extends A {
+            b: string;
+        }
+        function h() {
+            class C extends B {
+                c: string;
+            }
+            var x = new C();
+            x.a = "a";
+            x.b = "b";
+            x.c = "c";
+            return x;
+        }
+        return h();
+    }
+    return g();
+}
diff --git a/tests/cases/conformance/types/localTypes/localTypes2.ts b/tests/cases/conformance/types/localTypes/localTypes2.ts
new file mode 100644
index 0000000000..79f1402c70
--- /dev/null
+++ b/tests/cases/conformance/types/localTypes/localTypes2.ts
@@ -0,0 +1,40 @@
+function f1() {
+    function f() {
+        class C {
+            constructor(public x: number, public y: number) { }
+        }
+        return C;
+    }
+    let C = f();
+    let v = new C(10, 20);
+    let x = v.x;
+    let y = v.y;
+}
+
+function f2() {
+    function f(x: number) {
+        class C {
+            public x = x;
+            constructor(public y: number) { }
+        }
+        return C;
+    }
+    let C = f(10);
+    let v = new C(20);
+    let x = v.x;
+    let y = v.y;
+}
+
+function f3() {
+    function f(x: number, y: number) {
+        class C {
+            public x = x;
+            public y = y;
+        }
+        return C;
+    }
+    let C = f(10, 20);
+    let v = new C();
+    let x = v.x;
+    let y = v.y;
+}
diff --git a/tests/cases/conformance/types/localTypes/localTypes3.ts b/tests/cases/conformance/types/localTypes/localTypes3.ts
new file mode 100644
index 0000000000..5eb3cf2850
--- /dev/null
+++ b/tests/cases/conformance/types/localTypes/localTypes3.ts
@@ -0,0 +1,40 @@
+function f1() {
+    function f() {
+        class C<X, Y> {
+            constructor(public x: X, public y: Y) { }
+        }
+        return C;
+    }
+    let C = f();
+    let v = new C(10, "hello");
+    let x = v.x;
+    let y = v.y;
+}
+
+function f2() {
+    function f<X>(x: X) {
+        class C<Y> {
+            public x = x;
+            constructor(public y: Y) { }
+        }
+        return C;
+    }
+    let C = f(10);
+    let v = new C("hello");
+    let x = v.x;
+    let y = v.y;
+}
+
+function f3() {
+    function f<X, Y>(x: X, y: Y) {
+        class C {
+            public x = x;
+            public y = y;
+        }
+        return C;
+    }
+    let C = f(10, "hello");
+    let v = new C();
+    let x = v.x;
+    let y = v.y;
+}
diff --git a/tests/cases/conformance/types/localTypes/localTypes4.ts b/tests/cases/conformance/types/localTypes/localTypes4.ts
new file mode 100644
index 0000000000..bd31e76a80
--- /dev/null
+++ b/tests/cases/conformance/types/localTypes/localTypes4.ts
@@ -0,0 +1,37 @@
+function f1() {
+    // Type parameters are in scope in parameters and return types
+    function f<T>(x: T): T {
+        return undefined;
+    }
+}
+
+function f2() {
+    // Local types are not in scope in parameters and return types
+    function f(x: T): T {
+        interface T { }
+        return undefined;
+    }
+}
+
+function f3() {
+    // Type parameters and top-level local types are in same declaration space
+    function f<T>() {
+        interface T { }
+        return undefined;
+    }
+}
+
+function f4() {
+    // Local types are block scoped
+    interface T { x: number }
+    let v: T;
+    v.x = 10;
+    if (true) {
+        interface T { x: string }
+        let v: T;
+        v.x = "hello";
+    }
+    else {
+        v.x = 20;
+    }
+}
diff --git a/tests/cases/conformance/types/localTypes/localTypes5.ts b/tests/cases/conformance/types/localTypes/localTypes5.ts
new file mode 100644
index 0000000000..6aec24f183
--- /dev/null
+++ b/tests/cases/conformance/types/localTypes/localTypes5.ts
@@ -0,0 +1,14 @@
+function foo<A>() {
+    class X {
+        m<B, C>() {
+            return (function <D>() {
+                class Y<E> {
+                }
+                return new Y<string>();
+            })<Date>();
+        }
+    }
+    var x = new X();
+    return x.m<number, boolean>();
+}
+var x = foo<void>();