diff --git a/src/esm.ts b/src/esm.ts
index ae08ada32..a00b2110e 100644
--- a/src/esm.ts
+++ b/src/esm.ts
@@ -72,7 +72,7 @@ export function registerAndCreateEsmHooks (opts?: RegisterOptions) {
 
     // If file has .ts, .tsx, or .jsx extension, then ask node how it would treat this file if it were .js
     const ext = extname(nativePath)
-    if (ext === '.ts' || ext === '.tsx' || ext === '.jsx') {
+    if (ext !== '.js' && !tsNodeInstance.ignored(nativePath)) {
       return defer(formatUrl(pathToFileURL(nativePath + '.js')))
     }
 
diff --git a/src/index.spec.ts b/src/index.spec.ts
index 88de298d1..d9085e4cf 100644
--- a/src/index.spec.ts
+++ b/src/index.spec.ts
@@ -728,11 +728,38 @@ describe('ts-node', function () {
     it('should create generic compiler instances', () => {
       const service = create({ compilerOptions: { target: 'es5' }, skipProject: true })
       const output = service.compile('const x = 10', 'test.ts')
-
       expect(output).to.contain('var x = 10;')
     })
   })
 
+  describe('issue #1098', () => {
+    function testIgnored (ignored: tsNodeTypes.Register['ignored'], allowed: string[], disallowed: string[]) {
+      for (const ext of allowed) {
+        expect(ignored(join(__dirname, `index${ext}`))).equal(false, `should accept ${ext} files`)
+      }
+      for (const ext of disallowed) {
+        expect(ignored(join(__dirname, `index${ext}`))).equal(true, `should ignore ${ext} files`)
+      }
+    }
+
+    it('correctly filters file extensions from the compiler when allowJs=false and jsx=false', () => {
+      const { ignored } = create({ compilerOptions: { }, skipProject: true })
+      testIgnored(ignored, ['.ts', '.d.ts'], ['.js', '.tsx', '.jsx', '.mjs', '.cjs', '.xyz', ''])
+    })
+    it('correctly filters file extensions from the compiler when allowJs=true and jsx=false', () => {
+      const { ignored } = create({ compilerOptions: { allowJs: true }, skipProject: true })
+      testIgnored(ignored, ['.ts', '.js', '.d.ts'], ['.tsx', '.jsx', '.mjs', '.cjs', '.xyz', ''])
+    })
+    it('correctly filters file extensions from the compiler when allowJs=false and jsx=true', () => {
+      const { ignored } = create({ compilerOptions: { allowJs: false, jsx: 'preserve' }, skipProject: true })
+      testIgnored(ignored, ['.ts', '.tsx', '.d.ts'], ['.js', '.jsx', '.mjs', '.cjs', '.xyz', ''])
+    })
+    it('correctly filters file extensions from the compiler when allowJs=true and jsx=true', () => {
+      const { ignored } = create({ compilerOptions: { allowJs: true, jsx: 'preserve' }, skipProject: true })
+      testIgnored(ignored, ['.ts', '.tsx', '.js', '.jsx', '.d.ts'], ['.mjs', '.cjs', '.xyz', ''])
+    })
+  })
+
   describe('esm', () => {
     this.slow(1000)
 
diff --git a/src/index.ts b/src/index.ts
index 5aa2ea23b..ac55811b2 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -834,14 +834,15 @@ export function create (rawOptions: CreateOptions = {}): Register {
 
   let active = true
   const enabled = (enabled?: boolean) => enabled === undefined ? active : (active = !!enabled)
+  const extensions = getExtensions(config)
   const ignored = (fileName: string) => {
     if (!active) return true
-    const relname = relative(cwd, fileName)
-    if (!config.options.allowJs) {
-      const ext = extname(fileName)
-      if (ext === '.js' || ext === '.jsx') return true
+    const ext = extname(fileName)
+    if (extensions.tsExtensions.includes(ext) || extensions.jsExtensions.includes(ext)) {
+      const relname = relative(cwd, fileName)
+      return !isScoped(relname) || shouldIgnore(relname)
     }
-    return !isScoped(relname) || shouldIgnore(relname)
+    return true
   }
 
   return { ts, config, compile, getTypeInfo, ignored, enabled, options }