diff --git a/packages/language-service/ivy/test/BUILD.bazel b/packages/language-service/ivy/test/BUILD.bazel
new file mode 100644
index 0000000000..2c70a5e70c
--- /dev/null
+++ b/packages/language-service/ivy/test/BUILD.bazel
@@ -0,0 +1,28 @@
+load("//tools:defaults.bzl", "jasmine_node_test", "ts_library")
+
+ts_library(
+    name = "test_lib",
+    testonly = True,
+    srcs = glob(["*.ts"]),
+    deps = [
+        "@npm//typescript",
+    ],
+)
+
+jasmine_node_test(
+    name = "test",
+    data = [
+        # Note that we used to depend on the npm_package of common, core, and
+        # forms, but this is no longer the case. We did it for View Engine
+        # because we wanted to load the flat dts, which is only available in the
+        # npm_package. Ivy does not currently produce flat dts, so we might
+        # as well just depend on the outputs of ng_module.
+        "//packages/common",
+        "//packages/core",
+        "//packages/forms",
+        "//packages/language-service/test:project",
+    ],
+    deps = [
+        ":test_lib",
+    ],
+)
diff --git a/packages/language-service/ivy/test/mock_host.ts b/packages/language-service/ivy/test/mock_host.ts
new file mode 100644
index 0000000000..f9a39ff3c4
--- /dev/null
+++ b/packages/language-service/ivy/test/mock_host.ts
@@ -0,0 +1,77 @@
+/**
+ * @license
+ * Copyright Google Inc. All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.io/license
+ */
+
+import {join} from 'path';
+import * as ts from 'typescript/lib/tsserverlibrary';
+
+const logger: ts.server.Logger = {
+  close(): void{},
+  hasLevel(level: ts.server.LogLevel): boolean {
+    return false;
+  },
+  loggingEnabled(): boolean {
+    return false;
+  },
+  perftrc(s: string): void{},
+  info(s: string): void{},
+  startGroup(): void{},
+  endGroup(): void{},
+  msg(s: string, type?: ts.server.Msg): void{},
+  getLogFileName(): string |
+      undefined {
+        return;
+      },
+};
+
+export const TEST_SRCDIR = process.env.TEST_SRCDIR!;
+export const PROJECT_DIR =
+    join(TEST_SRCDIR, 'angular', 'packages', 'language-service', 'test', 'project');
+export const TSCONFIG = join(PROJECT_DIR, 'tsconfig.json');
+export const APP_COMPONENT = join(PROJECT_DIR, 'app', 'app.component.ts');
+export const APP_MAIN = join(PROJECT_DIR, 'app', 'main.ts');
+export const PARSING_CASES = join(PROJECT_DIR, 'app', 'parsing-cases.ts');
+
+export const host: ts.server.ServerHost = {
+  ...ts.sys,
+  readFile(absPath: string, encoding?: string): string |
+      undefined {
+        // TODO: Need to remove all annotations in templates like we do in
+        // MockTypescriptHost
+        return ts.sys.readFile(absPath, encoding);
+      },
+  // TODO: Need to cast as never because this is not a proper ServerHost interface.
+  // ts.sys lacks methods like watchFile() and watchDirectory(), but these are not
+  // needed for now.
+} as never;
+
+/**
+ * Create a ConfiguredProject and an actual program for the test project located
+ * in packages/language-service/test/project. Project creation exercises the
+ * actual code path, but a mock host is used for the filesystem to intercept
+ * and modify test files.
+ */
+export function setup() {
+  const projectService = new ts.server.ProjectService({
+    host,
+    logger,
+    cancellationToken: ts.server.nullCancellationToken,
+    useSingleInferredProject: true,
+    useInferredProjectPerProjectRoot: true,
+    typingsInstaller: ts.server.nullTypingsInstaller,
+  });
+  // Opening APP_COMPONENT forces a new ConfiguredProject to be created based
+  // on the tsconfig.json in the test project.
+  projectService.openClientFile(APP_COMPONENT);
+  const project = projectService.findProject(TSCONFIG);
+  if (!project) {
+    throw new Error(`Failed to create project for ${TSCONFIG}`);
+  }
+  // The following operation forces a ts.Program to be created.
+  const tsLS = project.getLanguageService();
+  return {projectService, project, tsLS};
+}
diff --git a/packages/language-service/ivy/test/mock_host_spec.ts b/packages/language-service/ivy/test/mock_host_spec.ts
new file mode 100644
index 0000000000..848b0db319
--- /dev/null
+++ b/packages/language-service/ivy/test/mock_host_spec.ts
@@ -0,0 +1,47 @@
+/**
+ * @license
+ * Copyright Google Inc. All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.io/license
+ */
+
+import * as ts from 'typescript/lib/tsserverlibrary';
+
+import {APP_MAIN, setup, TEST_SRCDIR} from './mock_host';
+
+describe('mock host', () => {
+  it('can load test project from Bazel runfiles', () => {
+    const {project, tsLS} = setup();
+    expect(project).toBeInstanceOf(ts.server.ConfiguredProject);
+    const program = tsLS.getProgram();
+    expect(program).toBeDefined();
+    const sourceFiles = program!.getSourceFiles().map(sf => {
+      const {fileName} = sf;
+      if (fileName.startsWith(TEST_SRCDIR)) {
+        return fileName.substring(TEST_SRCDIR.length);
+      }
+      return fileName;
+    });
+    expect(sourceFiles).toEqual(jasmine.arrayContaining([
+      // This shows that module resolution works
+      '/angular/packages/common/src/common.d.ts',
+      '/angular/packages/core/src/core.d.ts',
+      '/angular/packages/forms/src/forms.d.ts',
+      // This shows that project files are present
+      '/angular/packages/language-service/test/project/app/app.component.ts',
+      '/angular/packages/language-service/test/project/app/main.ts',
+      '/angular/packages/language-service/test/project/app/parsing-cases.ts',
+    ]));
+  });
+
+  it('produces no TS error for test project', () => {
+    const {project, tsLS} = setup();
+    const errors = project.getAllProjectErrors();
+    expect(errors).toEqual([]);
+    const globalErrors = project.getGlobalProjectErrors();
+    expect(globalErrors).toEqual([]);
+    const diags = tsLS.getSemanticDiagnostics(APP_MAIN);
+    expect(diags).toEqual([]);
+  });
+});
diff --git a/packages/language-service/test/project/tsconfig.json b/packages/language-service/test/project/tsconfig.json
index dca7200ff1..d2a130c87a 100644
--- a/packages/language-service/test/project/tsconfig.json
+++ b/packages/language-service/test/project/tsconfig.json
@@ -1,12 +1,18 @@
 {
-  "//00": "This file is used for IDE only, actual compilation options is in MockTypescriptHost in test_utils.ts",
+  "//00": "This file is used for both IDE and the actual Project creation in Ivy language service for testing purpose",
   "compilerOptions": {
-    "lib": ["es2015"],
+    "lib": ["es2015", "dom"],
     "strict": true,
     "experimentalDecorators": true,
+    "moduleResolution": "node",
+    "target": "es2015",
     "baseUrl": "../../../..",
     "paths": {
       "@angular/*": ["packages/*"]
     }
+  },
+  "angularCompilerOptions": {
+    "fullTemplateTypeCheck": true,
+    "strictInjectionParameters": true
   }
 }