diff --git a/build/gulpfile.extensions.js b/build/gulpfile.extensions.js
index af4b1cbf7e6..65667d707a2 100644
--- a/build/gulpfile.extensions.js
+++ b/build/gulpfile.extensions.js
@@ -31,11 +31,15 @@ var languages = ['chs', 'cht', 'jpn', 'kor', 'deu', 'fra', 'esn', 'rus', 'ita'];
 
 var tasks = compilations.map(function(tsconfigFile) {
 	var absolutePath = path.join(extensionsPath, tsconfigFile);
-	var options = require(absolutePath).compilerOptions;
-	options.verbose = !quiet;
+	var absoluteDirname = path.dirname(absolutePath);
+	var relativeDirname = path.dirname(tsconfigFile);
 
-	var globRelativeDirname = path.dirname(tsconfigFile);
-	var name = globRelativeDirname.replace(/\//g, '-');
+	var tsOptions = require(absolutePath).compilerOptions;
+	tsOptions.verbose = !quiet;
+	tsOptions.sourceMap = true;
+	tsOptions.sourceRoot = util.toFileUri(absoluteDirname);
+
+	var name = relativeDirname.replace(/\//g, '-');
 
 	// Tasks
 	var clean = 'clean-extension:' + name;
@@ -47,44 +51,38 @@ var tasks = compilations.map(function(tsconfigFile) {
 	var compileBuild = 'compile-extension-build:' + name;
 	var watchBuild = 'watch-extension-build:' + name;
 
-	var pipeline = (function () {
-		var reporter = quiet ? null : createReporter();
-		var compilation = tsb.create(options, null, null, quiet ? null : function (err) { reporter(err.toString()); });
-
-		return function (build) {
-			var input = es.through();
-			var tsFilter = filter(['**/*.ts', '!**/lib/lib*.d.ts', '!**/node_modules/**'], { restore: true });
-			var output;
-			if (build) {
-				output = input
-					.pipe(tsFilter)
-					.pipe(sourcemaps.init())
-						.pipe(compilation())
-						.pipe(nlsDev.rewriteLocalizeCalls())
-					.pipe(sourcemaps.write('.', {
-						addComment: false,
-						includeContent: false
-					}))
-					.pipe(tsFilter.restore)
-					.pipe(nlsDev.createAdditionalLanguageFiles(languages, path.join(__dirname, '..', 'i18n'), path.join('extensions', globRelativeDirname, 'out')))
-					.pipe(quiet ? es.through() : reporter.end());
-
-			} else {
-				output = input
-					.pipe(tsFilter)
-					.pipe(compilation())
-					.pipe(tsFilter.restore)
-					.pipe(quiet ? es.through() : reporter.end());
-			}
-
-			return es.duplex(input, output);
-		};
-	})();
-
-	var root = path.join('extensions', globRelativeDirname);
+	var root = path.join('extensions', relativeDirname);
 	var srcBase = path.join(root, 'src');
 	var src = path.join(srcBase, '**');
 	var out = path.join(root, 'out');
+	var i18n = path.join(__dirname, '..', 'i18n');
+
+	function createPipeline(build) {
+		var reporter = quiet ? null : createReporter();
+
+		tsOptions.inlineSources = !!build;
+		var compilation = tsb.create(tsOptions, null, null, quiet ? null : function (err) { reporter(err.toString()); });
+
+		return function () {
+			var input = es.through();
+			var tsFilter = filter(['**/*.ts', '!**/lib/lib*.d.ts', '!**/node_modules/**'], { restore: true });
+			var output = input
+				.pipe(tsFilter)
+				.pipe(util.loadSourcemaps())
+				.pipe(compilation())
+				.pipe(build ? nlsDev.rewriteLocalizeCalls() : es.through())
+				.pipe(sourcemaps.write('.', {
+					addComment: false,
+					includeContent: !!build,
+					sourceRoot: tsOptions.sourceRoot
+				}))
+				.pipe(tsFilter.restore)
+				.pipe(build ? nlsDev.createAdditionalLanguageFiles(languages, i18n, out) : es.through())
+				.pipe(quiet ? es.through() : reporter.end());
+
+			return es.duplex(input, output);
+		};
+	};
 
 	var srcOpts = { cwd: path.dirname(__dirname), base: srcBase };
 
@@ -93,14 +91,16 @@ var tasks = compilations.map(function(tsconfigFile) {
 	});
 
 	gulp.task(compile, [clean], function () {
+		var pipeline = createPipeline(false);
 		var input = gulp.src(src, srcOpts);
 
 		return input
-			.pipe(pipeline(false))
+			.pipe(pipeline())
 			.pipe(gulp.dest(out));
 	});
 
 	gulp.task(watch, [clean], function () {
+		var pipeline = createPipeline(false);
 		var input = gulp.src(src, srcOpts);
 		var watchInput = watcher(src, srcOpts);
 
@@ -114,10 +114,11 @@ var tasks = compilations.map(function(tsconfigFile) {
 	});
 
 	gulp.task(compileBuild, [clean], function () {
+		var pipeline = createPipeline(true);
 		var input = gulp.src(src, srcOpts);
 
 		return input
-			.pipe(pipeline(true))
+			.pipe(pipeline())
 			.pipe(gulp.dest(out));
 	});