diff --git a/packages/@angular/cli/blueprints/ng/files/__path__/tsconfig.spec.json b/packages/@angular/cli/blueprints/ng/files/__path__/tsconfig.spec.json
index 5dc8eeb57474..0bba9ea2069c 100644
--- a/packages/@angular/cli/blueprints/ng/files/__path__/tsconfig.spec.json
+++ b/packages/@angular/cli/blueprints/ng/files/__path__/tsconfig.spec.json
@@ -8,7 +8,8 @@
     "emitDecoratorMetadata": true,
     "experimentalDecorators": true,
     "lib": [
-      "es2016"
+      "es2016",
+      "dom"
     ],<% } %>
     "outDir": "<%= relativeRootPath %>/out-tsc/spec",
     "module": "commonjs",
@@ -23,6 +24,7 @@
     "test.ts"
   ],
   "include": [
-    "**/*.spec.ts"
+    "**/*.spec.ts",
+    "**/*.d.ts"
   ]
 }
diff --git a/packages/@angular/cli/models/webpack-configs/test.ts b/packages/@angular/cli/models/webpack-configs/test.ts
index 9c16aeb0925e..add32bd23cb0 100644
--- a/packages/@angular/cli/models/webpack-configs/test.ts
+++ b/packages/@angular/cli/models/webpack-configs/test.ts
@@ -4,6 +4,7 @@ import * as webpack from 'webpack';
 
 import { CliConfig } from '../config';
 import { WebpackTestOptions } from '../webpack-test-config';
+import { KarmaWebpackEmitlessError } from '../../plugins/karma-webpack-emitless-error';
 
 /**
  * Enumerate loaders and their dependencies from this file to let the dependency validator
@@ -57,7 +58,8 @@ export function getTestConfig(testConfig: WebpackTestOptions) {
       new webpack.SourceMapDevToolPlugin({
         filename: null, // if no value is provided the sourcemap is inlined
         test: /\.(ts|js)($|\?)/i // process .js and .ts files only
-      })
+      }),
+      new KarmaWebpackEmitlessError()
     ]
   };
 }
diff --git a/packages/@angular/cli/models/webpack-test-config.ts b/packages/@angular/cli/models/webpack-test-config.ts
index d7d3e81b7dd1..a5b9049f62db 100644
--- a/packages/@angular/cli/models/webpack-test-config.ts
+++ b/packages/@angular/cli/models/webpack-test-config.ts
@@ -28,6 +28,7 @@ export class WebpackTestConfig extends NgCliWebpackConfig {
     ];
 
     this.config = webpackMerge(webpackConfigs);
+    delete this.config.entry;
 
     // Remove any instance of CommonsChunkPlugin, not needed with karma-webpack.
     this.config.plugins = this.config.plugins.filter((plugin: any) =>
diff --git a/packages/@angular/cli/plugins/karma-webpack-emitless-error.ts b/packages/@angular/cli/plugins/karma-webpack-emitless-error.ts
new file mode 100644
index 000000000000..d028d22fc7f9
--- /dev/null
+++ b/packages/@angular/cli/plugins/karma-webpack-emitless-error.ts
@@ -0,0 +1,20 @@
+// Don't emit anything when there are compilation errors. This is useful for preventing Karma
+// from re-running tests when there is a compilation error.
+// Workaround for https://github.com/webpack-contrib/karma-webpack/issues/49
+
+export class KarmaWebpackEmitlessError {
+  constructor() { }
+
+  apply(compiler: any): void {
+    compiler.plugin('done', (stats: any) => {
+      if (stats.compilation.errors.length > 0) {
+        stats.stats = [{
+          toJson: function () {
+            return this;
+          },
+          assets: []
+        }];
+      }
+    });
+  }
+}
diff --git a/packages/@angular/cli/plugins/karma-webpack-throw-error.ts b/packages/@angular/cli/plugins/karma-webpack-throw-error.ts
new file mode 100644
index 000000000000..601e1ec4c79f
--- /dev/null
+++ b/packages/@angular/cli/plugins/karma-webpack-throw-error.ts
@@ -0,0 +1,14 @@
+// Force Webpack to throw compilation errors. Useful with karma-webpack when in single-run mode.
+// Workaround for https://github.com/webpack-contrib/karma-webpack/issues/66
+
+export class KarmaWebpackThrowError {
+  constructor() { }
+
+  apply(compiler: any): void {
+    compiler.plugin('done', (stats: any) => {
+      if (stats.compilation.errors.length > 0) {
+        throw new Error(stats.compilation.errors.map((err: any) => err.message || err));
+      }
+    });
+  }
+}
diff --git a/packages/@angular/cli/plugins/karma.ts b/packages/@angular/cli/plugins/karma.ts
index a16af88deab5..42303db5a9d8 100644
--- a/packages/@angular/cli/plugins/karma.ts
+++ b/packages/@angular/cli/plugins/karma.ts
@@ -5,6 +5,7 @@ import * as glob from 'glob';
 import { Pattern } from './glob-copy-webpack-plugin';
 import { extraEntryParser } from '../models/webpack-configs/utils';
 import { WebpackTestConfig, WebpackTestOptions } from '../models/webpack-test-config';
+import { KarmaWebpackThrowError } from './karma-webpack-throw-error';
 
 const getAppFromConfig = require('../utilities/app-utils').getAppFromConfig;
 
@@ -102,6 +103,11 @@ const init: any = (config: any) => {
     }
   };
 
+  // If Karma is being ran in single run mode, throw errors.
+  if (config.singleRun) {
+    webpackConfig.plugins.push(new KarmaWebpackThrowError());
+  }
+
   config.webpack = Object.assign(webpackConfig, config.webpack);
   config.webpackMiddleware = Object.assign(webpackMiddlewareConfig, config.webpackMiddleware);
 
diff --git a/packages/@ngtools/webpack/src/extract_i18n_plugin.ts b/packages/@ngtools/webpack/src/extract_i18n_plugin.ts
index 06168b9b3f24..be7ec112beb3 100644
--- a/packages/@ngtools/webpack/src/extract_i18n_plugin.ts
+++ b/packages/@ngtools/webpack/src/extract_i18n_plugin.ts
@@ -46,7 +46,8 @@ export class ExtractI18nPlugin implements Tapable {
     if (!options.hasOwnProperty('tsConfigPath')) {
       throw new Error('Must specify "tsConfigPath" in the configuration of @ngtools/webpack.');
     }
-    this._tsConfigPath = options.tsConfigPath;
+    // TS represents paths internally with '/' and expects the tsconfig path to be in this format
+    this._tsConfigPath = options.tsConfigPath.replace(/\\/g, '/');
 
     // Check the base path.
     const maybeBasePath = path.resolve(process.cwd(), this._tsConfigPath);
diff --git a/packages/@ngtools/webpack/src/plugin.ts b/packages/@ngtools/webpack/src/plugin.ts
index 2addb6a29018..055c675ccee3 100644
--- a/packages/@ngtools/webpack/src/plugin.ts
+++ b/packages/@ngtools/webpack/src/plugin.ts
@@ -96,7 +96,8 @@ export class AotPlugin implements Tapable {
     if (!options.hasOwnProperty('tsConfigPath')) {
       throw new Error('Must specify "tsConfigPath" in the configuration of @ngtools/webpack.');
     }
-    this._tsConfigPath = options.tsConfigPath;
+    // TS represents paths internally with '/' and expects the tsconfig path to be in this format
+    this._tsConfigPath = options.tsConfigPath.replace(/\\/g, '/');
 
     // Check the base path.
     const maybeBasePath = path.resolve(process.cwd(), this._tsConfigPath);
diff --git a/tests/e2e/tests/build/aot/exclude.ts b/tests/e2e/tests/build/aot/exclude.ts
index 6f1518e9302c..98904d0f9f22 100644
--- a/tests/e2e/tests/build/aot/exclude.ts
+++ b/tests/e2e/tests/build/aot/exclude.ts
@@ -23,6 +23,7 @@ export default function () {
     }))
     .then(() => updateJsonFile('src/tsconfig.json', tsconfigJson => {
       delete tsconfigJson['exclude'];
+      delete tsconfigJson['compilerOptions']['types'];
     }))
     .then(() => ng('build', '--aot'))
     .then(() => !ejected && ng('test', '--single-run'));
diff --git a/tests/e2e/tests/test/test-fail-single-run.ts b/tests/e2e/tests/test/test-fail-single-run.ts
new file mode 100644
index 000000000000..bdcbb14604df
--- /dev/null
+++ b/tests/e2e/tests/test/test-fail-single-run.ts
@@ -0,0 +1,10 @@
+import { ng } from '../../utils/process';
+import { writeFile } from '../../utils/fs';
+import { expectToFail } from '../../utils/utils';
+
+
+export default function () {
+  // Fails on single run with broken compilation.
+  return writeFile('src/app.component.spec.ts', '<p> definitely not typescript </p>')
+    .then(() => expectToFail(() => ng('test', '--single-run')));
+}
diff --git a/tests/e2e/tests/test/test-fail-watch.ts b/tests/e2e/tests/test/test-fail-watch.ts
new file mode 100644
index 000000000000..207588351ef8
--- /dev/null
+++ b/tests/e2e/tests/test/test-fail-watch.ts
@@ -0,0 +1,28 @@
+import {
+  killAllProcesses,
+  waitForAnyProcessOutputToMatch,
+  silentExecAndWaitForOutputToMatch
+} from '../../utils/process';
+import { expectToFail } from '../../utils/utils';
+import { readFile, writeFile } from '../../utils/fs';
+
+
+// Karma is only really finished with a run when it shows a non-zero total time in the first slot.
+const karmaGoodRegEx = /Executed 3 of 3 SUCCESS \(\d+\.\d+ secs/;
+
+export default function () {
+  let originalSpec: string;
+  return silentExecAndWaitForOutputToMatch('ng', ['test', '--no-progress'], karmaGoodRegEx)
+    .then(() => readFile('src/app/app.component.spec.ts'))
+    .then((data) => originalSpec = data)
+    // Trigger a failed rebuild, which shouldn't run tests again.
+    .then(() => writeFile('src/app/app.component.spec.ts', '<p> definitely not typescript </p>'))
+    .then(() => expectToFail(() => waitForAnyProcessOutputToMatch(karmaGoodRegEx, 10000)))
+    // Restore working spec.
+    .then(() => writeFile('src/app/app.component.spec.ts', originalSpec))
+    .then(() => waitForAnyProcessOutputToMatch(karmaGoodRegEx, 10000))
+    .then(() => killAllProcesses(), (err: any) => {
+      killAllProcesses();
+      throw err;
+    });
+}