diff --git a/aio/content/guide/aot-compiler.md b/aio/content/guide/aot-compiler.md
index 83295a7f18..8a46e61d92 100644
--- a/aio/content/guide/aot-compiler.md
+++ b/aio/content/guide/aot-compiler.md
@@ -1308,6 +1308,28 @@ Chuck: After reviewing your PR comment I'm still at a loss. See [comment there](
   }
   ```
 
+{@a tsconfig-extends}
+## Configuration inheritance with extends
+Similar to TypeScript Compiler, Angular Compiler also supports `extends` in the `tsconfig.json` on `angularCompilerOptions`. A tsconfig file can inherit configurations from another file using the `extends` property.
+ The `extends` is a top level property parallel to `compilerOptions` and `angularCompilerOptions`. 
+ The configuration from the base file are loaded first, then overridden by those in the inheriting config file.
+ Example:
+```json
+{
+  "extends": "../tsconfig.base.json",
+  "compilerOptions": {
+    "experimentalDecorators": true,
+    ...
+  },
+  "angularCompilerOptions": {
+    "fullTemplateTypeCheck": true,
+    "preserveWhitespaces": true,
+    ...
+  }
+}
+```
+ More information about tsconfig extends can be found in the [TypeScript Handbook](https://www.typescriptlang.org/docs/handbook/tsconfig-json.html).
+
 {@a compiler-options}
 ## Angular template compiler options
 
diff --git a/packages/compiler-cli/src/perform_compile.ts b/packages/compiler-cli/src/perform_compile.ts
index 9335dc525b..e62950cdc4 100644
--- a/packages/compiler-cli/src/perform_compile.ts
+++ b/packages/compiler-cli/src/perform_compile.ts
@@ -128,7 +128,37 @@ export function readConfiguration(
   try {
     const {projectFile, basePath} = calcProjectFileAndBasePath(project);
 
-    let {config, error} = ts.readConfigFile(projectFile, ts.sys.readFile);
+    const readExtendedConfigFile =
+        (configFile: string, existingConfig?: any): {config?: any, error?: ts.Diagnostic} => {
+          const {config, error} = ts.readConfigFile(configFile, ts.sys.readFile);
+
+          if (error) {
+            return {error};
+          }
+
+          // we are only interested into merging 'angularCompilerOptions' as
+          // other options like 'compilerOptions' are merged by TS
+          const baseConfig = existingConfig || config;
+          if (existingConfig) {
+            baseConfig.angularCompilerOptions = {...config.angularCompilerOptions,
+                                                 ...baseConfig.angularCompilerOptions};
+          }
+
+          if (config.extends) {
+            let extendedConfigPath = path.resolve(path.dirname(configFile), config.extends);
+            extendedConfigPath = path.extname(extendedConfigPath) ? extendedConfigPath :
+                                                                    `${extendedConfigPath}.json`;
+
+            if (fs.existsSync(extendedConfigPath)) {
+              // Call read config recursively as TypeScript only merges CompilerOptions
+              return readExtendedConfigFile(extendedConfigPath, baseConfig);
+            }
+          }
+
+          return {config: baseConfig};
+        };
+
+    const {config, error} = readExtendedConfigFile(projectFile);
 
     if (error) {
       return {
diff --git a/packages/compiler-cli/test/BUILD.bazel b/packages/compiler-cli/test/BUILD.bazel
index 75cacf05ed..8ace3a7195 100644
--- a/packages/compiler-cli/test/BUILD.bazel
+++ b/packages/compiler-cli/test/BUILD.bazel
@@ -133,3 +133,30 @@ jasmine_node_test(
         "//tools/testing:node",
     ],
 )
+
+# perform_compile_spec
+ts_library(
+    name = "perform_compile_lib",
+    testonly = 1,
+    srcs = [
+        "perform_compile_spec.ts",
+    ],
+    deps = [
+        ":test_utils",
+        "//packages/compiler",
+        "//packages/compiler-cli",
+    ],
+)
+
+jasmine_node_test(
+    name = "perform_compile",
+    bootstrap = ["angular/tools/testing/init_node_spec.js"],
+    data = [
+        "//packages/core:npm_package",
+    ],
+    deps = [
+        ":perform_compile_lib",
+        "//packages/core",
+        "//tools/testing:node",
+    ],
+)
diff --git a/packages/compiler-cli/test/perform_compile_spec.ts b/packages/compiler-cli/test/perform_compile_spec.ts
new file mode 100644
index 0000000000..9c838783e0
--- /dev/null
+++ b/packages/compiler-cli/test/perform_compile_spec.ts
@@ -0,0 +1,58 @@
+/**
+ * @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 path from 'path';
+
+import {readConfiguration} from '../src/perform_compile';
+
+import {TestSupport, setup} from './test_support';
+
+describe('perform_compile', () => {
+  let support: TestSupport;
+  let basePath: string;
+
+  beforeEach(() => {
+    support = setup();
+    basePath = support.basePath;
+  });
+
+  function writeSomeConfigs() {
+    support.writeFiles({
+      'tsconfig-level-1.json': `{
+          "extends": "./tsconfig-level-2.json",
+          "angularCompilerOptions": {
+            "annotateForClosureCompiler": true
+          }
+        }
+      `,
+      'tsconfig-level-2.json': `{
+          "extends": "./tsconfig-level-3.json",
+          "angularCompilerOptions": {
+            "skipMetadataEmit": true
+          }
+        }
+      `,
+      'tsconfig-level-3.json': `{
+          "angularCompilerOptions": {
+            "annotateForClosureCompiler": false,
+            "annotationsAs": "decorators"
+          }
+        }
+      `,
+    });
+  }
+
+  it('should merge tsconfig "angularCompilerOptions"', () => {
+    writeSomeConfigs();
+    const {options} = readConfiguration(path.resolve(basePath, 'tsconfig-level-1.json'));
+    expect(options.annotateForClosureCompiler).toBe(true);
+    expect(options.annotationsAs).toBe('decorators');
+    expect(options.skipMetadataEmit).toBe(true);
+  });
+
+});