diff --git a/source/runner/runners/utils/_tests/_fixtures/tsconfig.base.json b/source/runner/runners/utils/_tests/_fixtures/tsconfig.base.json
new file mode 100644
index 000000000..9bc1fe55d
--- /dev/null
+++ b/source/runner/runners/utils/_tests/_fixtures/tsconfig.base.json
@@ -0,0 +1,6 @@
+{
+  "compilerOptions": {
+    "target": "ES6",
+    "module": "ES2015"
+  }
+}
diff --git a/source/runner/runners/utils/_tests/_fixtures/tsconfig.json b/source/runner/runners/utils/_tests/_fixtures/tsconfig.json
new file mode 100644
index 000000000..ffcbb9477
--- /dev/null
+++ b/source/runner/runners/utils/_tests/_fixtures/tsconfig.json
@@ -0,0 +1,3 @@
+{
+  "extends": "./tsconfig.base.json"
+}
diff --git a/source/runner/runners/utils/_tests/_transpiler.test.ts b/source/runner/runners/utils/_tests/_transpiler.test.ts
index f50324c52..4d32ef86b 100644
--- a/source/runner/runners/utils/_tests/_transpiler.test.ts
+++ b/source/runner/runners/utils/_tests/_transpiler.test.ts
@@ -1,16 +1,12 @@
-jest.mock("fs", () => ({
-  readFileSync: jest.fn(),
-  realpathSync: {},
-  existsSync: jest.fn(),
-}))
 jest.mock("path", () => {
   const path = jest.requireActual("path")
   return { ...path, resolve: jest.fn(path.resolve) }
 })
 
 import { typescriptify, lookupTSConfig, dirContains } from "../transpiler"
-import * as fs from "fs"
+import fs from "fs"
 import * as path from "path"
+import ts from "typescript"
 
 describe("typescriptify", () => {
   it("removes the module option in a tsconfig", () => {
@@ -21,11 +17,25 @@ describe("typescriptify", () => {
         module: "es2015",
       },
     }
-    const fsMock = fs.readFileSync as jest.Mock
-    fsMock.mockImplementationOnce(() => JSON.stringify(fakeTSConfig))
-
+    jest.spyOn(ts.sys, "readFile").mockImplementationOnce(() => JSON.stringify(fakeTSConfig))
     expect(typescriptify(dangerfile, "/a/b")).not.toContain("import")
   })
+
+  it("resolves extended tsconfigs", () => {
+    const actualPath = jest.requireActual("path") as typeof path
+    const resolve = path.resolve as jest.Mock
+    resolve.mockImplementation((p: string = "") => actualPath.resolve(__dirname, p))
+
+    const dangerfile = `import { a } from 'lodash'; (() => a())()`
+
+    const transpiledCode = typescriptify(dangerfile, actualPath.resolve(__dirname, "./_fixtures"))
+    console.log(transpiledCode)
+    expect(transpiledCode).not.toContain("import")
+
+    // Arrow functions (=>) are not compiled to functions when the target is ES6.
+    // The ES6 target is defined in the base tsconfig so it must be inheriting from it.
+    expect(transpiledCode).toContain("=>")
+  })
 })
 
 /** Normalizes path to platform-specific */
@@ -45,9 +55,9 @@ describe("lookupTSConfig", () => {
     const resolve = path.resolve as jest.Mock
     resolve.mockImplementation((p: string = "") => actualPath.resolve(cwd, p))
 
-    const existsSync = fs.existsSync as jest.Mock
+    const existsSync = jest.spyOn(fs, "existsSync")
     const tsconfigPath = path.resolve(path.join(configDir, "tsconfig.json"))
-    existsSync.mockImplementation((f: string) => path.resolve(f) === tsconfigPath)
+    existsSync.mockImplementation((f: fs.PathLike) => path.resolve(f as string) === tsconfigPath)
   }
 
   it("can find in the same folder as dangerfile", () => {
diff --git a/source/runner/runners/utils/transpiler.ts b/source/runner/runners/utils/transpiler.ts
index ab4c434ce..c633dff2a 100644
--- a/source/runner/runners/utils/transpiler.ts
+++ b/source/runner/runners/utils/transpiler.ts
@@ -1,6 +1,6 @@
 import * as fs from "fs"
 import * as path from "path"
-import JSON5 from "json5"
+import ts from "typescript";
 import { debug } from "../../../debug"
 
 const enum BabelPackagePrefix {
@@ -120,40 +120,41 @@ export const lookupTSConfig = (dir: string): string | null => {
 }
 
 export const typescriptify = (content: string, dir: string): string => {
-  const ts = require("typescript")
-
   // Support custom TSC options, but also fallback to defaults
-  let compilerOptions: any
+  let compilerOptions: ts.CompilerOptions;
   const tsConfigPath = lookupTSConfig(dir)
   if (tsConfigPath) {
-    compilerOptions = JSON5.parse(fs.readFileSync(tsConfigPath, "utf8"))
+    compilerOptions = ts.parseJsonConfigFileContent(
+      ts.readConfigFile(tsConfigPath, ts.sys.readFile).config,
+      {
+        fileExists: ts.sys.fileExists,
+        readFile: ts.sys.readFile,
+        readDirectory: ts.sys.readDirectory,
+        useCaseSensitiveFileNames: ts.sys.useCaseSensitiveFileNames,
+      },
+      dir,
+    ).options;
   } else {
     compilerOptions = ts.getDefaultCompilerOptions()
   }
 
-  let result = ts.transpileModule(content, sanitizeTSConfig(compilerOptions))
+  let result = ts.transpileModule(content, { compilerOptions: sanitizeTSConfig(compilerOptions)})
   return result.outputText
 }
 
-const sanitizeTSConfig = (config: any) => {
-  if (!config.compilerOptions) {
-    return config
-  }
-
-  const safeConfig = config
-
-  // It can make sense to ship TS code with modules
-  // for `import`/`export` syntax, but as we're running
-  // the transpiled code on vanilla node - it'll need to
-  // be used with plain old commonjs
-  //
-  // @see https://github.com/apollographql/react-apollo/pull/1402#issuecomment-351810274
-  //
-  if (safeConfig.compilerOptions.module) {
-    safeConfig.compilerOptions.module = "commonjs"
+const sanitizeTSConfig = (config: ts.CompilerOptions) => {
+  if (config.module) {
+    // It can make sense to ship TS code with modules
+    // for `import`/`export` syntax, but as we're running
+    // the transpiled code on vanilla node - it'll need to
+    // be used with plain old commonjs
+    //
+    // @see https://github.com/apollographql/react-apollo/pull/1402#issuecomment-351810274
+    //
+    config.module = ts.ModuleKind.CommonJS;
   }
 
-  return safeConfig
+  return config
 }
 
 export const babelify = (content: string, filename: string, extraPlugins: string[]): string => {