diff --git a/src/vs/workbench/api/node/extHost.api.impl.ts b/src/vs/workbench/api/node/extHost.api.impl.ts
index d39add02215..f4c1b144ae0 100644
--- a/src/vs/workbench/api/node/extHost.api.impl.ts
+++ b/src/vs/workbench/api/node/extHost.api.impl.ts
@@ -102,7 +102,7 @@ export class ExtHostAPIImplementation {
 		const extHostDocuments = col.define(ExtHostContext.ExtHostDocuments).set<ExtHostDocuments>(new ExtHostDocuments(threadService));
 		const extHostEditors = col.define(ExtHostContext.ExtHostEditors).set<ExtHostEditors>(new ExtHostEditors(threadService, extHostDocuments));
 		const extHostCommands = col.define(ExtHostContext.ExtHostCommands).set<ExtHostCommands>(new ExtHostCommands(threadService, extHostEditors));
-		const extHostConfiguration = col.define(ExtHostContext.ExtHostConfiguration).set<ExtHostConfiguration>(new ExtHostConfiguration(threadService));
+		const extHostConfiguration = col.define(ExtHostContext.ExtHostConfiguration).set<ExtHostConfiguration>(new ExtHostConfiguration(threadService.get(MainContext.MainThreadConfiguration)));
 		const extHostDiagnostics = col.define(ExtHostContext.ExtHostDiagnostics).set<ExtHostDiagnostics>(new ExtHostDiagnostics(threadService));
 		const languageFeatures = col.define(ExtHostContext.ExtHostLanguageFeatures).set<ExtHostLanguageFeatures>(new ExtHostLanguageFeatures(threadService, extHostDocuments, extHostCommands, extHostDiagnostics));
 		const extHostFileSystemEvent = col.define(ExtHostContext.ExtHostFileSystemEventService).set<ExtHostFileSystemEventService>(new ExtHostFileSystemEventService());
diff --git a/src/vs/workbench/api/node/extHostConfiguration.ts b/src/vs/workbench/api/node/extHostConfiguration.ts
index e1d52fbfcd1..896f81c5a30 100644
--- a/src/vs/workbench/api/node/extHostConfiguration.ts
+++ b/src/vs/workbench/api/node/extHostConfiguration.ts
@@ -8,8 +8,7 @@ import {mixin} from 'vs/base/common/objects';
 import {illegalState} from 'vs/base/common/errors';
 import Event, {Emitter} from 'vs/base/common/event';
 import {WorkspaceConfiguration} from 'vscode';
-import {ExtHostConfigurationShape, MainContext, MainThreadConfigurationShape} from './extHost.protocol';
-import {IThreadService} from 'vs/workbench/services/thread/common/threadService';
+import {ExtHostConfigurationShape, MainThreadConfigurationShape} from './extHost.protocol';
 import {ConfigurationTarget, ConfigurationEditingResult} from 'vs/workbench/services/configuration/common/configurationEditing';
 
 export class ExtHostConfiguration extends ExtHostConfigurationShape {
@@ -17,12 +16,11 @@ export class ExtHostConfiguration extends ExtHostConfigurationShape {
 	private _proxy: MainThreadConfigurationShape;
 	private _hasConfig: boolean;
 	private _config: any;
-	private _onDidChangeConfiguration: Emitter<void>;
+	private _onDidChangeConfiguration = new Emitter<void>();
 
-	constructor(threadService: IThreadService) {
+	constructor(proxy: MainThreadConfigurationShape) {
 		super();
-		this._proxy = threadService.get(MainContext.MainThreadConfiguration);
-		this._onDidChangeConfiguration = new Emitter<void>();
+		this._proxy = proxy;
 	}
 
 	get onDidChangeConfiguration(): Event<void> {
@@ -56,6 +54,7 @@ export class ExtHostConfiguration extends ExtHostConfigurationShape {
 				return result;
 			},
 			update: (key: string, value: any, global: boolean) => {
+				key = section ? `${section}.${key}` : key;
 				const target = global ? ConfigurationTarget.USER : ConfigurationTarget.WORKSPACE;
 				return this._proxy.$updateConfigurationOption(target, key, value).then(value => {
 					if (value !== ConfigurationEditingResult.OK) {
diff --git a/src/vs/workbench/test/node/api/extHostConfiguration.test.ts b/src/vs/workbench/test/node/api/extHostConfiguration.test.ts
new file mode 100644
index 00000000000..c44d719e003
--- /dev/null
+++ b/src/vs/workbench/test/node/api/extHostConfiguration.test.ts
@@ -0,0 +1,70 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+'use strict';
+
+import * as assert from 'assert';
+import {ExtHostConfiguration} from 'vs/workbench/api/node/extHostConfiguration';
+import {MainThreadConfigurationShape} from 'vs/workbench/api/node/extHost.protocol';
+import {TPromise} from 'vs/base/common/winjs.base';
+import {ConfigurationTarget, ConfigurationEditingResult} from 'vs/workbench/services/configuration/common/configurationEditing';
+
+suite('ExtHostConfiguration', function () {
+
+	class RecordingShape extends MainThreadConfigurationShape {
+		lastArgs: [ConfigurationTarget, string, any];
+		$updateConfigurationOption(target: ConfigurationTarget, key: string, value: any): TPromise<ConfigurationEditingResult> {
+			this.lastArgs = [target, key, value];
+			return TPromise.as(ConfigurationEditingResult.OK);
+		}
+	};
+
+	function createExtHostConfiguration(data: any = {}, shape?: MainThreadConfigurationShape) {
+		if (!shape) {
+			shape = new class extends MainThreadConfigurationShape { };
+		}
+		const result = new ExtHostConfiguration(shape);
+		result.$acceptConfigurationChanged(data);
+		return result;
+	}
+
+	test('check illegal state', function () {
+		assert.throws(() => new ExtHostConfiguration(new class extends MainThreadConfigurationShape { }).getConfiguration('foo'));
+	});
+
+	test('udate / section to key', function () {
+
+		const shape = new RecordingShape();
+		const allConfig = createExtHostConfiguration({ foo: { bar: 1, far: 2 } }, shape);
+
+		let config = allConfig.getConfiguration('foo');
+		config.update('bar', 42, true);
+
+		assert.equal(shape.lastArgs[0], ConfigurationEditingResult.OK);
+		assert.equal(shape.lastArgs[1], 'foo.bar');
+		assert.equal(shape.lastArgs[2], 42);
+
+		config = allConfig.getConfiguration('');
+		config.update('bar', 42, true);
+		assert.equal(shape.lastArgs[1], 'bar');
+
+		config.update('foo.bar', 42, true);
+		assert.equal(shape.lastArgs[1], 'foo.bar');
+	});
+
+	test('update / error-state not OK', function () {
+
+		const shape = new class extends MainThreadConfigurationShape {
+			$updateConfigurationOption(target: ConfigurationTarget, key: string, value: any): TPromise<ConfigurationEditingResult> {
+				return TPromise.as(ConfigurationEditingResult.ERROR_UNKNOWN_KEY); // something !== OK
+			}
+		};
+
+		return createExtHostConfiguration({}, shape)
+			.getConfiguration('')
+			.update('', true, false)
+			.then(() => assert.ok(false), err => { /* expecting rejection */});
+	});
+});