diff --git a/src/compiler/parser.ts b/src/compiler/parser.ts
index a1dc0ef7b1d90..06db869ad54f4 100644
--- a/src/compiler/parser.ts
+++ b/src/compiler/parser.ts
@@ -736,6 +736,16 @@ module ts {
             return parseSourceFile(sourceFile.fileName, newText, sourceFile.languageVersion, /*syntaxCursor*/ undefined, /*setNodeParents*/ true)
         }
 
+        // Make sure we're not trying to incrementally update a source file more than once.  Once
+        // we do an update the original source file is considered unusbale from that point onwards. 
+        //
+        // This is because we do incremental parsing in-place.  i.e. we take nodes from the old
+        // tree and give them new positions and parents.  From that point on, trusting the old
+        // tree at all is not possible as far too much of it may violate invariants.
+        var incrementalSourceFile = <IncrementalNode><Node>sourceFile;
+        Debug.assert(!incrementalSourceFile.hasBeenIncrementallyParsed);
+        incrementalSourceFile.hasBeenIncrementallyParsed = true;
+
         var oldText = sourceFile.text;
         var syntaxCursor = createSyntaxCursor(sourceFile);
 
@@ -774,7 +784,7 @@ module ts {
         //
         // Also, mark any syntax elements that intersect the changed span.  We know, up front,
         // that we cannot reuse these elements.
-        updateTokenPositionsAndMarkElements(<IncrementalNode><Node>sourceFile,
+        updateTokenPositionsAndMarkElements(incrementalSourceFile,
             changeRange.span.start, textSpanEnd(changeRange.span), textSpanEnd(textChangeRangeNewSpan(changeRange)), delta, oldText, newText, aggressiveChecks);
 
         // Now that we've set up our internal incremental state just proceed and parse the
@@ -815,6 +825,7 @@ module ts {
     }
 
     interface IncrementalNode extends Node, IncrementalElement {
+        hasBeenIncrementallyParsed: boolean
     }
 
     interface IncrementalNodeArray extends NodeArray<IncrementalNode>, IncrementalElement {
diff --git a/src/services/services.ts b/src/services/services.ts
index 56e68b2f5a138..eda3a4aeff656 100644
--- a/src/services/services.ts
+++ b/src/services/services.ts
@@ -2022,6 +2022,12 @@ module ts {
                 return;
             }
 
+            // IMPORTANT - It is critical from this moment onward that we do not check 
+            // cancellation tokens.  We are about to mutate source files from a previous program
+            // instance.  If we cancel midway through, we may end up in an inconsistent state where
+            // the program points to old source files that have been invalidated because of 
+            // incremental parsing.
+
             var oldSettings = program && program.getCompilerOptions();
             var newSettings = hostCache.compilationSettings();
             var changesInCompilationSettingsAffectSyntax = oldSettings && oldSettings.target !== newSettings.target;
@@ -2056,8 +2062,6 @@ module ts {
             return;
 
             function getOrCreateSourceFile(fileName: string): SourceFile {
-                cancellationToken.throwIfCancellationRequested();
-
                 // The program is asking for this file, check first if the host can locate it.
                 // If the host can not locate the file, then it does not exist. return undefined
                 // to the program to allow reporting of errors for missing files.
@@ -5363,9 +5367,6 @@ module ts {
             cancellationToken.throwIfCancellationRequested();
 
             var fileContents = sourceFile.text;
-
-            cancellationToken.throwIfCancellationRequested();
-
             var result: TodoComment[] = [];
 
             if (descriptors.length > 0) {