diff --git a/_extension/package.json b/_extension/package.json
index b218b3496a..0635664c30 100644
--- a/_extension/package.json
+++ b/_extension/package.json
@@ -31,6 +31,11 @@
             {
                 "title": "TypeScript Native Preview",
                 "properties": {
+                    "typescript.native-preview.customConfigFileName": {
+                        "type": "string",
+                        "description": "Custom config file name to use, before defaulting to tsconfig.json/jsconfig.json.",
+                        "tags": ["experimental"]
+                    },
                     "typescript.native-preview.trace.server": {
                         "type": "string",
                         "enum": [
diff --git a/_extension/src/client.ts b/_extension/src/client.ts
index b759501e97..f785c45ce5 100644
--- a/_extension/src/client.ts
+++ b/_extension/src/client.ts
@@ -94,6 +94,7 @@ export class Client {
         const config = vscode.workspace.getConfiguration("typescript.native-preview");
         const pprofDir = config.get<string>("pprofDir");
         const pprofArgs = pprofDir ? ["--pprofDir", pprofDir] : [];
+        const customConfigFileName = config.get<string>("customConfigFileName") ?? "";
 
         const serverOptions: ServerOptions = {
             run: {
@@ -112,7 +113,12 @@ export class Client {
             "typescript.native-preview",
             "typescript.native-preview-lsp",
             serverOptions,
-            this.clientOptions,
+            {
+                ...this.clientOptions,
+                initializationOptions: {
+                    customConfigFileName,
+                },
+            },
         );
 
         this.outputChannel.appendLine(`Starting language server...`);
diff --git a/_extension/src/extension.ts b/_extension/src/extension.ts
index d1fe6036eb..fd109da65f 100644
--- a/_extension/src/extension.ts
+++ b/_extension/src/extension.ts
@@ -19,24 +19,28 @@ export async function activate(context: vscode.ExtensionContext) {
     let disposeLanguageFeatures: vscode.Disposable | undefined;
 
     context.subscriptions.push(vscode.workspace.onDidChangeConfiguration(async event => {
-        if (event.affectsConfiguration("typescript.experimental.useTsgo")) {
-            if (needsExtHostRestartOnChange()) {
+        if (event.affectsConfiguration("typescript.experimental.useTsgo") ||
+            event.affectsConfiguration("typescript.native-preview.configNames") ||
+            event.affectsConfiguration("typescript.native-preview.customConfigFileName")) {
+            // Always require restart if configNames changed, or if environment requires restart
+            if (event.affectsConfiguration("typescript.native-preview.configNames") ||
+                event.affectsConfiguration("typescript.native-preview.customConfigFileName") ||
+                needsExtHostRestartOnChange()) {
                 // Delay because the command to change the config setting will restart
                 // the extension host, so no need to show a message
                 setTimeout(async () => {
-                    const selected = await vscode.window.showInformationMessage("TypeScript Native Preview setting has changed. Restart extensions to apply changes.", "Restart Extensions");
+                    const selected = await vscode.window.showInformationMessage("TypeScript Native Preview settings have changed. Restart extensions to apply changes.", "Restart Extensions");
                     if (selected) {
                         vscode.commands.executeCommand("workbench.action.restartExtensionHost");
                     }
                 }, 100);
-            }
-            else {
+            } else {
+                // Toggle language features dynamically when useTsgo changes and restart not required
                 const useTsgo = vscode.workspace.getConfiguration("typescript").get<boolean>("experimental.useTsgo");
                 if (useTsgo) {
                     disposeLanguageFeatures = await activateLanguageFeatures(context, output, traceOutput);
                     context.subscriptions.push(disposeLanguageFeatures);
-                }
-                else {
+                } else {
                     disposeLanguageFeatures?.dispose();
                     disposeLanguageFeatures = undefined;
                 }
diff --git a/_submodules/TypeScript b/_submodules/TypeScript
index 9e8eaa1746..add6971195 160000
--- a/_submodules/TypeScript
+++ b/_submodules/TypeScript
@@ -1 +1 @@
-Subproject commit 9e8eaa1746b0d09c3cd29048126ef9cf24f29c03
+Subproject commit add697119549734b24d46b30b9f6d2e757c6d53a
diff --git a/internal/lsp/server.go b/internal/lsp/server.go
index cecd426747..6c8837bb9c 100644
--- a/internal/lsp/server.go
+++ b/internal/lsp/server.go
@@ -701,15 +701,26 @@ func (s *Server) handleInitialized(ctx context.Context, params *lsproto.Initiali
 		cwd = s.cwd
 	}
 
+	// Read customConfigFileName from initializationOptions if provided
+	var customConfigFileName string
+	if init := s.initializeParams; init != nil && init.InitializationOptions != nil {
+		if m, ok := (*init.InitializationOptions).(map[string]any); ok {
+			if v, ok := m["customConfigFileName"].(string); ok {
+				customConfigFileName = v
+			}
+		}
+	}
+
 	s.session = project.NewSession(&project.SessionInit{
 		Options: &project.SessionOptions{
-			CurrentDirectory:   cwd,
-			DefaultLibraryPath: s.defaultLibraryPath,
-			TypingsLocation:    s.typingsLocation,
-			PositionEncoding:   s.positionEncoding,
-			WatchEnabled:       s.watchEnabled,
-			LoggingEnabled:     true,
-			DebounceDelay:      500 * time.Millisecond,
+			CurrentDirectory:     cwd,
+			DefaultLibraryPath:   s.defaultLibraryPath,
+			TypingsLocation:      s.typingsLocation,
+			PositionEncoding:     s.positionEncoding,
+			WatchEnabled:         s.watchEnabled,
+			LoggingEnabled:       true,
+			DebounceDelay:        500 * time.Millisecond,
+			CustomConfigFileName: customConfigFileName,
 		},
 		FS:          s.fs,
 		Logger:      s.logger,
diff --git a/internal/project/configfileregistrybuilder.go b/internal/project/configfileregistrybuilder.go
index 6dbb3c5f34..586a0b22c3 100644
--- a/internal/project/configfileregistrybuilder.go
+++ b/internal/project/configfileregistrybuilder.go
@@ -495,7 +495,27 @@ func (c *configFileRegistryBuilder) handleConfigChange(entry *dirty.SyncMapEntry
 
 func (c *configFileRegistryBuilder) computeConfigFileName(fileName string, skipSearchInDirectoryOfFile bool, logger *logging.LogTree) string {
 	searchPath := tspath.GetDirectoryPath(fileName)
-	result, _ := tspath.ForEachAncestorDirectory(searchPath, func(directory string) (result string, stop bool) {
+	skipSearchInDirectoryOfFileForCustomConfig := skipSearchInDirectoryOfFile
+	var result string
+	// If custom config file is provided, search for it in directory of file and its ancestors first.
+	// If a custom config file is provided and not found, default to tsconfig.json/jsconfig.json.
+	if c.sessionOptions.CustomConfigFileName != "" {
+		result, _ = tspath.ForEachAncestorDirectory(searchPath, func(directory string) (result string, stop bool) {
+			customConfigFilePath := tspath.CombinePaths(directory, c.sessionOptions.CustomConfigFileName)
+			if !skipSearchInDirectoryOfFileForCustomConfig && c.FS().FileExists(customConfigFilePath) {
+				return customConfigFilePath, true
+			}
+			skipSearchInDirectoryOfFileForCustomConfig = false
+			return "", false
+		})
+	}
+
+	if result != "" {
+		logger.Logf("computeConfigFileName:: File: %s:: Result: %s", fileName, result)
+		return result
+	}
+
+	result, _ = tspath.ForEachAncestorDirectory(searchPath, func(directory string) (result string, stop bool) {
 		tsconfigPath := tspath.CombinePaths(directory, "tsconfig.json")
 		if !skipSearchInDirectoryOfFile && c.FS().FileExists(tsconfigPath) {
 			return tsconfigPath, true
diff --git a/internal/project/session.go b/internal/project/session.go
index 0e2b2de6b1..e6d9174698 100644
--- a/internal/project/session.go
+++ b/internal/project/session.go
@@ -44,6 +44,7 @@ type SessionOptions struct {
 	WatchEnabled       bool
 	LoggingEnabled     bool
 	DebounceDelay      time.Duration
+	CustomConfigFileName string
 }
 
 type SessionInit struct {