diff --git a/source/lib/config.ts b/source/lib/config.ts
index eefb39cd..8e9e19b7 100644
--- a/source/lib/config.ts
+++ b/source/lib/config.ts
@@ -56,7 +56,9 @@ function getOptionsFromTsConfig(cwd: string): CompilerOptions {
 	return parseJsonSourceFileConfigFileContent(
 		readJsonConfigFile(configPath, sys.readFile),
 		sys,
-		path.basename(configPath)
+		path.basename(configPath),
+		undefined,
+		configPath,
 	).options;
 }
 
diff --git a/source/test/fixtures/ts-config-extends/config/base-config.json b/source/test/fixtures/ts-config-extends/config/base-config.json
new file mode 100644
index 00000000..d1819f05
--- /dev/null
+++ b/source/test/fixtures/ts-config-extends/config/base-config.json
@@ -0,0 +1,5 @@
+{
+	"compilerOptions": {
+		"strict": false
+	}
+}
diff --git a/source/test/fixtures/ts-config-extends/index.d.ts b/source/test/fixtures/ts-config-extends/index.d.ts
new file mode 100644
index 00000000..6f3a1c51
--- /dev/null
+++ b/source/test/fixtures/ts-config-extends/index.d.ts
@@ -0,0 +1 @@
+export default function (foo: number): number | null;
diff --git a/source/test/fixtures/ts-config-extends/index.js b/source/test/fixtures/ts-config-extends/index.js
new file mode 100644
index 00000000..0d06f8dd
--- /dev/null
+++ b/source/test/fixtures/ts-config-extends/index.js
@@ -0,0 +1,3 @@
+module.exports.default = foo => {
+	return foo > 0 ? foo : null;
+};
diff --git a/source/test/fixtures/ts-config-extends/index.test-d.ts b/source/test/fixtures/ts-config-extends/index.test-d.ts
new file mode 100644
index 00000000..58042641
--- /dev/null
+++ b/source/test/fixtures/ts-config-extends/index.test-d.ts
@@ -0,0 +1,12 @@
+import {expectType} from '../../..';
+import aboveZero from '.';
+
+expectType<number>(aboveZero(1));
+
+function lookupHeadphonesManufacturer(color: 'blue' | 'black'): string {
+	if (color === 'blue') {
+		return 'beats';
+	} else {
+		'bose';
+	}
+}
diff --git a/source/test/fixtures/ts-config-extends/package.json b/source/test/fixtures/ts-config-extends/package.json
new file mode 100644
index 00000000..de6dc1db
--- /dev/null
+++ b/source/test/fixtures/ts-config-extends/package.json
@@ -0,0 +1,3 @@
+{
+	"name": "foo"
+}
diff --git a/source/test/fixtures/ts-config-extends/tsconfig.json b/source/test/fixtures/ts-config-extends/tsconfig.json
new file mode 100644
index 00000000..d8776207
--- /dev/null
+++ b/source/test/fixtures/ts-config-extends/tsconfig.json
@@ -0,0 +1,6 @@
+{
+	"extends": "./config/base-config",
+	"compilerOptions": {
+		"noImplicitReturns": true
+	}
+}
diff --git a/source/test/fixtures/utils.ts b/source/test/fixtures/utils.ts
index cab9e6e7..0f05d31f 100644
--- a/source/test/fixtures/utils.ts
+++ b/source/test/fixtures/utils.ts
@@ -11,20 +11,20 @@ type Expectation = [number, number, 'error' | 'warning', string, (string | RegEx
  * @param expectations - Expected diagnostics.
  */
 export const verify = (t: ExecutionContext, diagnostics: Diagnostic[], expectations: Expectation[]) => {
-	t.true(diagnostics.length === expectations.length);
+	t.deepEqual(diagnostics.length, expectations.length, 'Received different count of diagnostics than expected!');
 
 	for (const [index, diagnostic] of diagnostics.entries()) {
-		t.is(diagnostic.line, expectations[index][0]);
-		t.is(diagnostic.column, expectations[index][1]);
-		t.is(diagnostic.severity, expectations[index][2]);
-		t.is(diagnostic.message, expectations[index][3]);
+		t.is(diagnostic.line, expectations[index][0], `"line" for diagnostic ${index} doesn't match!`);
+		t.is(diagnostic.column, expectations[index][1], `"column" for diagnostic ${index} doesn't match!`);
+		t.is(diagnostic.severity, expectations[index][2], `"severity" for diagnostic ${index} doesn't match!`);
+		t.is(diagnostic.message, expectations[index][3], `"message" for diagnostic ${index} doesn't match!`);
 
 		const filename = expectations[index][4];
 
 		if (typeof filename === 'string') {
-			t.is(diagnostic.fileName, filename);
+			t.is(diagnostic.fileName, filename, `"fileName" for diagnostic ${index} doesn't match!`);
 		} else if (typeof filename === 'object') {
-			t.regex(diagnostic.fileName, filename);
+			t.regex(diagnostic.fileName, filename, `"fileName" for diagnostic ${index} doesn't match!`);
 		}
 	}
 };
diff --git a/source/test/test.ts b/source/test/test.ts
index 7a837805..d949c146 100644
--- a/source/test/test.ts
+++ b/source/test/test.ts
@@ -305,3 +305,11 @@ test('fails if typings file is not found in the specified path', async t => {
 
 	t.is(error.message, 'The type definition `unknown.d.ts` does not exist. Create one and try again.');
 });
+
+test('includes extended config files along with found ones', async t => {
+	const diagnostics = await tsd({cwd: path.join(__dirname, 'fixtures/ts-config-extends')});
+
+	verify(t, diagnostics, [
+		[6, 64, 'error', 'Not all code paths return a value.'],
+	]);
+});