diff --git a/cli/asc.js b/cli/asc.js
index 5a6a22dd7d..9d718d8bd0 100644
--- a/cli/asc.js
+++ b/cli/asc.js
@@ -207,20 +207,20 @@ exports.main = function main(argv, options, callback) {
   // Check for unknown arguments
   if (opts.unknown.length) {
     opts.unknown.forEach(arg => {
-      stderr.write(colorsUtil.stderr.yellow("WARN: ") + "Unknown option '" + arg + "'" + EOL);
+      stderr.write(colorsUtil.stderr.yellow("WARNING ") + "Unknown option '" + arg + "'" + EOL);
     });
   }
 
   // Check for trailing arguments
   if (opts.trailing.length) {
-    stderr.write(colorsUtil.stderr.yellow("WARN: ") + "Unsupported trailing arguments: " + opts.trailing.join(" ") + EOL);
+    stderr.write(colorsUtil.stderr.yellow("WARNING ") + "Unsupported trailing arguments: " + opts.trailing.join(" ") + EOL);
   }
 
   // Use default callback if none is provided
   if (!callback) callback = function defaultCallback(err) {
     var code = 0;
     if (err) {
-      stderr.write(colorsUtil.stderr.red("ERROR: ") + err.stack.replace(/^ERROR: /i, "") + EOL);
+      stderr.write(colorsUtil.stderr.red("FAILURE ") + err.stack.replace(/^ERROR: /i, "") + EOL);
       code = 1;
     }
     return code;
@@ -534,15 +534,20 @@ exports.main = function main(argv, options, callback) {
     var internalPath;
     while ((internalPath = assemblyscript.nextFile(program)) != null) {
       let file = getFile(internalPath, assemblyscript.getDependee(program, internalPath));
-      if (!file) return callback(Error("Import '" + internalPath + "' not found."));
-      stats.parseCount++;
-      stats.parseTime += measure(() => {
-        assemblyscript.parse(program, file.sourceText, file.sourcePath, false);
-      });
+      if (file) {
+        stats.parseCount++;
+        stats.parseTime += measure(() => {
+          assemblyscript.parse(program, file.sourceText, file.sourcePath, false);
+        });
+      } else {
+        assemblyscript.parse(program, null, internalPath + extension.ext, false);
+      }
     }
     var numErrors = checkDiagnostics(program, stderr);
     if (numErrors) {
-      return callback(Error(numErrors + " parse error(s)"));
+      const err = Error(numErrors + " parse error(s)");
+      err.stack = err.message; // omit stack
+      return callback(err);
     }
   }
 
@@ -577,8 +582,8 @@ exports.main = function main(argv, options, callback) {
     let sourceText = readFile(sourcePath + extension.ext, baseDir);
     if (sourceText == null) {
       sourceText = readFile(sourcePath + "/index" + extension.ext, baseDir);
-      if (sourceText == null) return callback(Error("Entry file '" + sourcePath + extension.ext + "' not found."));
-      sourcePath += "/index" + extension.ext;
+      if (sourceText != null) sourcePath += "/index" + extension.ext;
+      else sourcePath += extension.ext;
     } else {
       sourcePath += extension.ext;
     }
@@ -634,7 +639,9 @@ exports.main = function main(argv, options, callback) {
   var numErrors = checkDiagnostics(program, stderr);
   if (numErrors) {
     if (module) module.dispose();
-    return callback(Error(numErrors + " compile error(s)"));
+    const err = Error(numErrors + " compile error(s)");
+    err.stack = err.message; // omit stack
+    return callback(err);
   }
 
   // Call afterCompile transform hook
diff --git a/src/index.ts b/src/index.ts
index 653ef77257..48cf27960f 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -214,8 +214,8 @@ export function isError(message: DiagnosticMessage): bool {
 export function parse(
   /** Program reference. */
   program: Program,
-  /** Source text of the file. */
-  text: string,
+  /** Source text of the file, or `null` to indicate not found. */
+  text: string | null,
   /** Normalized path of the file. */
   path: string,
   /** Whether this is an entry file. */
diff --git a/src/parser.ts b/src/parser.ts
index 6374660079..7c2dc90c8e 100644
--- a/src/parser.ts
+++ b/src/parser.ts
@@ -89,6 +89,14 @@ import {
   mangleInternalPath
 } from "./ast";
 
+/** Represents a dependee. */
+class Dependee {
+  constructor(
+    public source: Source,
+    public reportNode: Node
+  ) {}
+}
+
 /** Parser interface. */
 export class Parser extends DiagnosticEmitter {
 
@@ -102,8 +110,8 @@ export class Parser extends DiagnosticEmitter {
   onComment: CommentHandler | null = null;
   /** Current file being parsed. */
   currentSource: Source | null = null;
-  /** Dependency map **/
-  dependees: Map<string, Source> = new Map();
+  /** Map of dependees being depended upon by a source, by path. */
+  dependees: Map<string, Dependee> = new Map();
   /** An array of parsed sources. */
   sources: Source[];
 
@@ -118,8 +126,8 @@ export class Parser extends DiagnosticEmitter {
 
   /** Parses a file and adds its definitions to the program. */
   parseFile(
-    /** Source text of the file. */
-    text: string,
+    /** Source text of the file, or `null` to indicate not found. */
+    text: string | null,
     /** Normalized path of the file. */
     path: string,
     /** Whether this is an entry file. */
@@ -127,12 +135,28 @@ export class Parser extends DiagnosticEmitter {
   ): void {
     // the frontend gives us paths with file extensions
     var normalizedPath = normalizePath(path);
-    var internalPath = mangleInternalPath(normalizedPath);
+    var internalPath = mangleInternalPath(path);
+
     // check if already processed
     if (this.donelog.has(internalPath)) return;
     this.donelog.add(internalPath); // do not parse again
     this.seenlog.add(internalPath); // do not request again
 
+    // check if this is an error
+    if (text === null) {
+      let dependees = this.dependees;
+      let dependee: Dependee | null = null;
+      if (dependees.has(internalPath)) dependee = assert(dependees.get(internalPath));
+      this.error(
+        DiagnosticCode.File_0_not_found,
+        dependee
+          ? dependee.reportNode.range
+          : null,
+        path
+      );
+      return;
+    }
+
     // create the source element
     var source = new Source(
       isEntry
@@ -402,10 +426,13 @@ export class Parser extends DiagnosticEmitter {
     return backlog.length ? assert(backlog.shift()) : null;
   }
 
-  /** Obtains the dependee of the given imported file. */
+  /** Obtains the path of the dependee of the given imported file. */
   getDependee(dependent: string): string | null {
-    var source = this.dependees.get(dependent);
-    if (source) return source.internalPath;
+    var dependees = this.dependees;
+    if (dependees.has(dependent)) {
+      let dependee = assert(dependees.get(dependent));
+      return dependee.source.internalPath;
+    }
     return null;
   }
 
@@ -2447,11 +2474,13 @@ export class Parser extends DiagnosticEmitter {
         }
       }
       let ret = Node.createExportStatement(members, path, isDeclare, tn.range(startPos, tn.pos));
-      let internalPath = ret.internalPath;
-      if (internalPath !== null && !this.seenlog.has(internalPath)) {
-        this.dependees.set(internalPath, currentSource);
-        this.backlog.push(internalPath);
-        this.seenlog.add(internalPath);
+      if (path !== null) {
+        let internalPath = assert(ret.internalPath);
+        if (!this.seenlog.has(internalPath)) {
+          this.dependees.set(internalPath, new Dependee(currentSource, path));
+          this.backlog.push(internalPath);
+          this.seenlog.add(internalPath);
+        }
       }
       tn.skip(Token.SEMICOLON);
       return ret;
@@ -2466,7 +2495,7 @@ export class Parser extends DiagnosticEmitter {
           if (!exportPaths) source.exportPaths = [ internalPath ];
           else if (!exportPaths.includes(internalPath)) exportPaths.push(internalPath);
           if (!this.seenlog.has(internalPath)) {
-            this.dependees.set(internalPath, currentSource);
+            this.dependees.set(internalPath, new Dependee(currentSource, path));
             this.backlog.push(internalPath);
           }
           tn.skip(Token.SEMICOLON);
@@ -2638,7 +2667,7 @@ export class Parser extends DiagnosticEmitter {
         }
         let internalPath = ret.internalPath;
         if (!this.seenlog.has(internalPath)) {
-          this.dependees.set(internalPath, assert(this.currentSource));
+          this.dependees.set(internalPath, new Dependee(assert(this.currentSource), path));
           this.backlog.push(internalPath);
         }
         tn.skip(Token.SEMICOLON);
diff --git a/tests/packages/packages/g/test.js b/tests/packages/packages/g/test.js
index 9d8d35b972..677082bdbb 100644
--- a/tests/packages/packages/g/test.js
+++ b/tests/packages/packages/g/test.js
@@ -1,17 +1,16 @@
 #!/usr/bin/env node
-let asc = require("../../../../cli/asc");
+const asc = require("../../../../cli/asc");
 
-let argv = [
+const stderr = asc.createMemoryStream();
+asc.main([
   "assembly/index.ts",
   "--noEmit",
   "--runtime", "stub",
   "--traceResolution"
-];
-
-asc.main(argv, error => {
-  if (/Import .*lib\/a.* not found/g.test(error.message)) {
+], { stderr }, err => {
+  if (stderr.toString().includes("File '~lib/a.ts' not found.")) {
     process.exit(0);
   }
-  console.error("Failed!\n" + error);
+  console.error("Failed!\n" + err);
   process.exit(1);
 });