diff --git a/src/fsharp/vs/service.fs b/src/fsharp/vs/service.fs
index 1e06270838..9b2dd7ea42 100755
--- a/src/fsharp/vs/service.fs
+++ b/src/fsharp/vs/service.fs
@@ -2762,6 +2762,9 @@ type FSharpProjectFileInfo (fsprojFileName:string, ?properties, ?enableLogging)
                 yield i.FinalItemSpec
               for i in project.GetEvaluatedItemsByName("ChildProjectReferences") do
                 yield i.FinalItemSpec ]
+            // Duplicate slashes sometimes appear in the output here, which prevents
+            // them from matching keys used in FSharpProjectOptions.ReferencedProjects
+            |> List.map (fun (s: string) -> s.Replace("//","/"))
 
         outFileOpt, directory, getItems, references, projectReferences, getProp project, project.FullFileName
 
@@ -3155,19 +3158,19 @@ type FSharpChecker(projectCacheSize, keepAssemblyContents, keepAllBackgroundReso
 #if SILVERLIGHT
 #else
 #if FX_ATLEAST_45
-    member ic.GetProjectOptionsFromProjectFile(projectFileName, ?properties : (string * string) list, ?loadedTimeStamp) = 
-        let parsedProject = FSharpProjectFileInfo(projectFileName, ?properties=properties)
-        let args = parsedProject.Options |> Array.ofList
-
-        let projectOptions = ic.GetProjectOptionsFromCommandLineArgs(projectFileName, args, ?loadedTimeStamp=loadedTimeStamp)
-        let referencedProjectOptions =
-          [| for file in parsedProject.ProjectReferences do
-                 if Path.GetExtension(file) = ".fsproj" then
-                     yield file, ic.GetProjectOptionsFromProjectFile(file, ?properties=properties, ?loadedTimeStamp=loadedTimeStamp) |]
-
-        { projectOptions
-          with ReferencedProjects = referencedProjectOptions }
-
+    member ic.GetProjectOptionsFromProjectFile(projectFileName, ?properties : (string * string) list, ?loadedTimeStamp) =
+        let rec getOptions file : Option<string> * FSharpProjectOptions =
+            let parsedProject = FSharpProjectFileInfo.Parse(file, ?properties=properties)
+            let projectOptions = ic.GetProjectOptionsFromCommandLineArgs(file, Array.ofList parsedProject.Options, ?loadedTimeStamp=loadedTimeStamp)
+            let referencedProjectOptions =
+                [| for file in parsedProject.ProjectReferences do
+                       if Path.GetExtension(file) = ".fsproj" then
+                           match getOptions file with
+                           | Some outFile, opts -> yield outFile, opts
+                           | None, _ -> () |]
+            parsedProject.OutputFile, { projectOptions with ReferencedProjects = referencedProjectOptions }
+
+        snd (getOptions projectFileName)
 #endif
 #endif
 
diff --git a/tests/service/ProjectOptionsTests.fs b/tests/service/ProjectOptionsTests.fs
index ba863292be..d00e41cace 100644
--- a/tests/service/ProjectOptionsTests.fs
+++ b/tests/service/ProjectOptionsTests.fs
@@ -207,7 +207,7 @@ let ``Project file parsing -- project references``() =
   let options = checker.GetProjectOptionsFromProjectFile(f2)
 
   options.ReferencedProjects |> should haveLength 1
-  fst options.ReferencedProjects.[0] |> should endWith "Test1.fsproj"
+  fst options.ReferencedProjects.[0] |> should endWith "Test1.dll"
   snd options.ReferencedProjects.[0] |> should equal (checker.GetProjectOptionsFromProjectFile(f1))
 
 [<Test>]
@@ -217,7 +217,7 @@ let ``Project file parsing -- multi language project``() =
   let options = checker.GetProjectOptionsFromProjectFile(f)
 
   options.ReferencedProjects |> should haveLength 1
-  options.ReferencedProjects.[0] |> fst |> should endWith "ConsoleApplication2.fsproj"
+  options.ReferencedProjects.[0] |> fst |> should endWith "ConsoleApplication2.exe"
 
   checkOption options.OtherOptions "ConsoleApplication2.exe"
   checkOption options.OtherOptions "ConsoleApplication3.exe"