diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index df9ee17f32d9f..57cd2f3c3091c 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -3509,7 +3509,7 @@ namespace ts {
                     ? WatchDirectoryFlags.Recursive : WatchDirectoryFlags.None
             };
         }
-        if (isImplicitGlob(spec)) {
+        if (isImplicitGlob(spec.substring(spec.lastIndexOf(directorySeparator) + 1))) {
             return {
                 key: useCaseSensitiveFileNames ? spec : toFileNameLowerCase(spec),
                 flags: WatchDirectoryFlags.Recursive
diff --git a/src/testRunner/unittests/config/tsconfigParsing.ts b/src/testRunner/unittests/config/tsconfigParsing.ts
index 3c6dfb6a53636..de793bffa4e05 100644
--- a/src/testRunner/unittests/config/tsconfigParsing.ts
+++ b/src/testRunner/unittests/config/tsconfigParsing.ts
@@ -412,5 +412,14 @@ namespace ts {
                 Diagnostics.Compiler_option_0_requires_a_value_of_type_1.code,
                 /*noLocation*/ true);
         });
+
+        it("parses wildcard directories even when parent directories have dots", () => {
+            const parsed = parseConfigFileTextToJson("/foo.bar/tsconfig.json", JSON.stringify({
+                include: ["src"]
+            }));
+
+            const parsedCommand = parseJsonConfigFileContent(parsed.config, sys, "/foo.bar");
+            assert.deepEqual(parsedCommand.wildcardDirectories, { "/foo.bar/src": WatchDirectoryFlags.Recursive });
+        });
     });
 }