diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index e8784e7d1f26d..101b584ca1352 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -655,7 +655,7 @@
         "category": "Error",
         "code": 1207
     },
-    "Cannot compile namespaces when the '--isolatedModules' flag is provided.": {
+    "All files must be modules when the '--isolatedModules' flag is provided.": {
         "category": "Error",
         "code": 1208
     },
diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index 6313cc19902b1..8e4cd48b5bad9 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -2858,10 +2858,10 @@ namespace ts {
                     createDiagnosticForOptionName(Diagnostics.Option_isolatedModules_can_only_be_used_when_either_option_module_is_provided_or_option_target_is_ES2015_or_higher, "isolatedModules", "target");
                 }
 
-                const firstNonExternalModuleSourceFile = find(files, f => !isExternalModule(f) && !f.isDeclarationFile && f.scriptKind !== ScriptKind.JSON);
+                const firstNonExternalModuleSourceFile = find(files, f => !isExternalModule(f) && !isSourceFileJS(f) && !f.isDeclarationFile && f.scriptKind !== ScriptKind.JSON);
                 if (firstNonExternalModuleSourceFile) {
                     const span = getErrorSpanForNode(firstNonExternalModuleSourceFile, firstNonExternalModuleSourceFile);
-                    programDiagnostics.add(createFileDiagnostic(firstNonExternalModuleSourceFile, span.start, span.length, Diagnostics.Cannot_compile_namespaces_when_the_isolatedModules_flag_is_provided));
+                    programDiagnostics.add(createFileDiagnostic(firstNonExternalModuleSourceFile, span.start, span.length, Diagnostics.All_files_must_be_modules_when_the_isolatedModules_flag_is_provided));
                 }
             }
             else if (firstNonAmbientExternalModuleSourceFile && languageVersion < ScriptTarget.ES2015 && options.module === ModuleKind.None) {
diff --git a/tests/baselines/reference/commonJsIsolatedModules.js b/tests/baselines/reference/commonJsIsolatedModules.js
new file mode 100644
index 0000000000000..fe983eec37ad8
--- /dev/null
+++ b/tests/baselines/reference/commonJsIsolatedModules.js
@@ -0,0 +1,8 @@
+//// [index.js]
+module.exports = {}
+var x = 1
+
+
+//// [index.js]
+module.exports = {};
+var x = 1;
diff --git a/tests/baselines/reference/commonJsIsolatedModules.symbols b/tests/baselines/reference/commonJsIsolatedModules.symbols
new file mode 100644
index 0000000000000..f0f9d0d785553
--- /dev/null
+++ b/tests/baselines/reference/commonJsIsolatedModules.symbols
@@ -0,0 +1,9 @@
+=== tests/cases/compiler/index.js ===
+module.exports = {}
+>module.exports : Symbol("tests/cases/compiler/index", Decl(index.js, 0, 0))
+>module : Symbol(module, Decl(index.js, 0, 0))
+>exports : Symbol("tests/cases/compiler/index", Decl(index.js, 0, 0))
+
+var x = 1
+>x : Symbol(x, Decl(index.js, 1, 3))
+
diff --git a/tests/baselines/reference/commonJsIsolatedModules.types b/tests/baselines/reference/commonJsIsolatedModules.types
new file mode 100644
index 0000000000000..363b450cef94a
--- /dev/null
+++ b/tests/baselines/reference/commonJsIsolatedModules.types
@@ -0,0 +1,12 @@
+=== tests/cases/compiler/index.js ===
+module.exports = {}
+>module.exports = {} : typeof import("tests/cases/compiler/index")
+>module.exports : typeof import("tests/cases/compiler/index")
+>module : { "tests/cases/compiler/index": typeof import("tests/cases/compiler/index"); }
+>exports : typeof import("tests/cases/compiler/index")
+>{} : {}
+
+var x = 1
+>x : number
+>1 : 1
+
diff --git a/tests/baselines/reference/importHelpersInIsolatedModules.errors.txt b/tests/baselines/reference/importHelpersInIsolatedModules.errors.txt
index 7a53c1c8c9954..9655daa3325b5 100644
--- a/tests/baselines/reference/importHelpersInIsolatedModules.errors.txt
+++ b/tests/baselines/reference/importHelpersInIsolatedModules.errors.txt
@@ -1,4 +1,4 @@
-tests/cases/compiler/script.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/script.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/external.ts (0 errors) ====
@@ -16,7 +16,7 @@ tests/cases/compiler/script.ts(1,1): error TS1208: Cannot compile namespaces whe
 ==== tests/cases/compiler/script.ts (1 errors) ====
     class A { }
     ~~~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
     class B extends A { }
     
     declare var dec: any;
diff --git a/tests/baselines/reference/isolatedModulesNoExternalModule.errors.txt b/tests/baselines/reference/isolatedModulesNoExternalModule.errors.txt
index 6d0f12bb1aba3..2ca0a1139fb53 100644
--- a/tests/baselines/reference/isolatedModulesNoExternalModule.errors.txt
+++ b/tests/baselines/reference/isolatedModulesNoExternalModule.errors.txt
@@ -1,7 +1,7 @@
-tests/cases/compiler/file1.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/file1.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/file1.ts (1 errors) ====
     var x;
     ~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
\ No newline at end of file
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
\ No newline at end of file
diff --git a/tests/baselines/reference/isolatedModulesOut.errors.txt b/tests/baselines/reference/isolatedModulesOut.errors.txt
index 5581ece62e689..ef9455189d088 100644
--- a/tests/baselines/reference/isolatedModulesOut.errors.txt
+++ b/tests/baselines/reference/isolatedModulesOut.errors.txt
@@ -1,6 +1,6 @@
 error TS5053: Option 'out' cannot be specified with option 'isolatedModules'.
 tests/cases/compiler/file1.ts(1,1): error TS6131: Cannot compile modules using option 'out' unless the '--module' flag is 'amd' or 'system'.
-tests/cases/compiler/file2.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/file2.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 !!! error TS5053: Option 'out' cannot be specified with option 'isolatedModules'.
@@ -11,4 +11,4 @@ tests/cases/compiler/file2.ts(1,1): error TS1208: Cannot compile namespaces when
 ==== tests/cases/compiler/file2.ts (1 errors) ====
     var y;
     ~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
\ No newline at end of file
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
\ No newline at end of file
diff --git a/tests/baselines/reference/isolatedModulesPlainFile-AMD.errors.txt b/tests/baselines/reference/isolatedModulesPlainFile-AMD.errors.txt
index d24da5e09ccfc..6c34c9953f03b 100644
--- a/tests/baselines/reference/isolatedModulesPlainFile-AMD.errors.txt
+++ b/tests/baselines/reference/isolatedModulesPlainFile-AMD.errors.txt
@@ -1,9 +1,9 @@
-tests/cases/compiler/isolatedModulesPlainFile-AMD.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/isolatedModulesPlainFile-AMD.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/isolatedModulesPlainFile-AMD.ts (1 errors) ====
     declare function run(a: number): void;
     ~~~~~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
     run(1);
     
\ No newline at end of file
diff --git a/tests/baselines/reference/isolatedModulesPlainFile-CommonJS.errors.txt b/tests/baselines/reference/isolatedModulesPlainFile-CommonJS.errors.txt
index 43d18c54eb957..61a6021bf7343 100644
--- a/tests/baselines/reference/isolatedModulesPlainFile-CommonJS.errors.txt
+++ b/tests/baselines/reference/isolatedModulesPlainFile-CommonJS.errors.txt
@@ -1,9 +1,9 @@
-tests/cases/compiler/isolatedModulesPlainFile-CommonJS.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/isolatedModulesPlainFile-CommonJS.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/isolatedModulesPlainFile-CommonJS.ts (1 errors) ====
     declare function run(a: number): void;
     ~~~~~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
     run(1);
     
\ No newline at end of file
diff --git a/tests/baselines/reference/isolatedModulesPlainFile-ES6.errors.txt b/tests/baselines/reference/isolatedModulesPlainFile-ES6.errors.txt
index 56316072aff36..d1f9d635b0e93 100644
--- a/tests/baselines/reference/isolatedModulesPlainFile-ES6.errors.txt
+++ b/tests/baselines/reference/isolatedModulesPlainFile-ES6.errors.txt
@@ -1,9 +1,9 @@
-tests/cases/compiler/isolatedModulesPlainFile-ES6.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/isolatedModulesPlainFile-ES6.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/isolatedModulesPlainFile-ES6.ts (1 errors) ====
     declare function run(a: number): void;
     ~~~~~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
     run(1);
     
\ No newline at end of file
diff --git a/tests/baselines/reference/isolatedModulesPlainFile-System.errors.txt b/tests/baselines/reference/isolatedModulesPlainFile-System.errors.txt
index b1e2ba643fa5e..e955549d754b9 100644
--- a/tests/baselines/reference/isolatedModulesPlainFile-System.errors.txt
+++ b/tests/baselines/reference/isolatedModulesPlainFile-System.errors.txt
@@ -1,9 +1,9 @@
-tests/cases/compiler/isolatedModulesPlainFile-System.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/isolatedModulesPlainFile-System.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/isolatedModulesPlainFile-System.ts (1 errors) ====
     declare function run(a: number): void;
     ~~~~~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
     run(1);
     
\ No newline at end of file
diff --git a/tests/baselines/reference/isolatedModulesPlainFile-UMD.errors.txt b/tests/baselines/reference/isolatedModulesPlainFile-UMD.errors.txt
index 29dfe4f67fbcf..1b7a01dd5bca8 100644
--- a/tests/baselines/reference/isolatedModulesPlainFile-UMD.errors.txt
+++ b/tests/baselines/reference/isolatedModulesPlainFile-UMD.errors.txt
@@ -1,9 +1,9 @@
-tests/cases/compiler/isolatedModulesPlainFile-UMD.ts(1,1): error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+tests/cases/compiler/isolatedModulesPlainFile-UMD.ts(1,1): error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
 
 
 ==== tests/cases/compiler/isolatedModulesPlainFile-UMD.ts (1 errors) ====
     declare function run(a: number): void;
     ~~~~~~~
-!!! error TS1208: Cannot compile namespaces when the '--isolatedModules' flag is provided.
+!!! error TS1208: All files must be modules when the '--isolatedModules' flag is provided.
     run(1);
     
\ No newline at end of file
diff --git a/tests/cases/compiler/commonJsIsolatedModules.ts b/tests/cases/compiler/commonJsIsolatedModules.ts
new file mode 100644
index 0000000000000..a75a5ec96d289
--- /dev/null
+++ b/tests/cases/compiler/commonJsIsolatedModules.ts
@@ -0,0 +1,12 @@
+// @Filename: tsconfig.json
+{
+  "compilerOptions": {
+    "allowJs": true,
+    "outDir": "foo",
+    "isolatedModules": true,
+  }
+}
+
+// @Filename: index.js
+module.exports = {}
+var x = 1