diff --git a/src/compiler/sys.ts b/src/compiler/sys.ts
index 13bbfc2ab153f..9cf95d6de9b92 100644
--- a/src/compiler/sys.ts
+++ b/src/compiler/sys.ts
@@ -439,6 +439,7 @@ namespace ts {
                 return filter<string>(_fs.readdirSync(path), dir => fileSystemEntryExists(combinePaths(path, dir), FileSystemEntryKind.Directory));
             }
 
+            const noOpFileWatcher: FileWatcher = { close: noop };
             const nodeSystem: System = {
                 args: process.argv.slice(2),
                 newLine: _os.EOL,
@@ -475,7 +476,7 @@ namespace ts {
                     // (ref: https://github.com/nodejs/node/pull/2649 and https://github.com/Microsoft/TypeScript/issues/4643)
                     let options: any;
                     if (!directoryExists(directoryName)) {
-                        return;
+                        return noOpFileWatcher;
                     }
 
                     if (isNode4OrLater() && (process.platform === "win32" || process.platform === "darwin")) {
diff --git a/src/harness/unittests/tsserverProjectSystem.ts b/src/harness/unittests/tsserverProjectSystem.ts
index ee6139b1215c6..c3974f037728e 100644
--- a/src/harness/unittests/tsserverProjectSystem.ts
+++ b/src/harness/unittests/tsserverProjectSystem.ts
@@ -1964,6 +1964,33 @@ namespace ts.projectSystem {
             projectService.checkNumberOfProjects({ configuredProjects: 1 });
             checkProjectActualFiles(projectService.configuredProjects[0], [libES5.path, libES2015Promise.path, app.path]);
         });
+
+        it("should handle non-existing directories in config file", () => {
+            const f = {
+                path: "/a/src/app.ts",
+                content: "let x = 1;"
+            };
+            const config = {
+                path: "/a/tsconfig.json",
+                content: JSON.stringify({
+                    compilerOptions: {},
+                    include: [
+                        "src/**/*",
+                        "notexistingfolder/*"
+                    ]
+                })
+            };
+            const host = createServerHost([f, config]);
+            const projectService = createProjectService(host);
+            projectService.openClientFile(f.path);
+            projectService.checkNumberOfProjects({ configuredProjects: 1 });
+
+            projectService.closeClientFile(f.path);
+            projectService.checkNumberOfProjects({ configuredProjects: 0 });
+
+            projectService.openClientFile(f.path);
+            projectService.checkNumberOfProjects({ configuredProjects: 1 });
+        });
     });
 
     describe("prefer typings to js", () => {