diff --git a/compiler/cli/cli-common/src/org/jetbrains/jet/cli/common/arguments/K2JVMCompilerArguments.java b/compiler/cli/cli-common/src/org/jetbrains/jet/cli/common/arguments/K2JVMCompilerArguments.java
index 05129b028e8..239c7461da2 100644
--- a/compiler/cli/cli-common/src/org/jetbrains/jet/cli/common/arguments/K2JVMCompilerArguments.java
+++ b/compiler/cli/cli-common/src/org/jetbrains/jet/cli/common/arguments/K2JVMCompilerArguments.java
@@ -24,6 +24,10 @@ import org.jetbrains.annotations.NotNull;
  */
 @SuppressWarnings("UnusedDeclaration")
 public class K2JVMCompilerArguments extends CommonCompilerArguments {
+    @Argument(value = "d", description = "Destination for generated class files")
+    @ValueDescription("<directory|jar>")
+    public String destination;
+
     @Argument(value = "jar", description = "Resulting .jar file path")
     @ValueDescription("<path>")
     public String jar;
diff --git a/compiler/cli/src/org/jetbrains/jet/cli/jvm/K2JVMCompiler.java b/compiler/cli/src/org/jetbrains/jet/cli/jvm/K2JVMCompiler.java
index 709c20898e9..fddc961ef28 100644
--- a/compiler/cli/src/org/jetbrains/jet/cli/jvm/K2JVMCompiler.java
+++ b/compiler/cli/src/org/jetbrains/jet/cli/jvm/K2JVMCompiler.java
@@ -117,8 +117,19 @@ public class K2JVMCompiler extends CLICompiler<K2JVMCompilerArguments> {
         try {
             configureEnvironment(configuration, arguments);
 
-            File jar = arguments.jar != null ? new File(arguments.jar) : null;
-            File outputDir = arguments.outputDir != null ? new File(arguments.outputDir) : null;
+            String destination = arguments.destination;
+
+            File jar;
+            File outputDir;
+            if (destination != null) {
+                boolean isJar = destination.endsWith(".jar");
+                jar = isJar ? new File(destination) : null;
+                outputDir = isJar ? null : new File(destination);
+            }
+            else {
+                jar = arguments.jar != null ? new File(arguments.jar) : null;
+                outputDir = arguments.outputDir != null ? new File(arguments.outputDir) : null;
+            }
 
             if (arguments.module != null) {
                 MessageCollector sanitizedCollector = new FilteringMessageCollector(messageCollector, in(CompilerMessageSeverity.VERBOSE));
@@ -129,14 +140,15 @@ public class K2JVMCompiler extends CLICompiler<K2JVMCompilerArguments> {
                 }
 
                 if (outputDir != null) {
-                    messageCollector.report(CompilerMessageSeverity.WARNING, "The '-output' option is ignored because '-module' is specified",
+                    messageCollector.report(CompilerMessageSeverity.WARNING,
+                                            "The '-d' option with a directory destination is ignored because '-module' is specified",
                                             CompilerMessageLocation.NO_LOCATION);
                 }
 
                 File directory = new File(arguments.module).getAbsoluteFile().getParentFile();
-                KotlinToJVMBytecodeCompiler.compileModules(configuration, moduleScript.getModules(),
-                                                                      directory, jar,
-                                                                      arguments.includeRuntime);
+                KotlinToJVMBytecodeCompiler.compileModules(
+                        configuration, moduleScript.getModules(), directory, jar, arguments.includeRuntime
+                );
             }
             else if (arguments.script) {
                 List<String> scriptArgs = arguments.freeArgs.subList(1, arguments.freeArgs.size());
diff --git a/compiler/integration-tests/src/org/jetbrains/kotlin/CompilerSmokeTest.java b/compiler/integration-tests/src/org/jetbrains/kotlin/CompilerSmokeTest.java
index 519c2994d6b..891f431f2b6 100644
--- a/compiler/integration-tests/src/org/jetbrains/kotlin/CompilerSmokeTest.java
+++ b/compiler/integration-tests/src/org/jetbrains/kotlin/CompilerSmokeTest.java
@@ -27,7 +27,7 @@ public class CompilerSmokeTest extends KotlinIntegrationTestBase {
     public void compileAndRunHelloApp() throws Exception {
         String jar = tmpdir.getTmpDir().getAbsolutePath() + File.separator + "hello.jar";
 
-        assertEquals("compilation failed", 0, runCompiler("hello.compile", "-includeRuntime", "hello.kt", "-jar", jar));
+        assertEquals("compilation failed", 0, runCompiler("hello.compile", "-includeRuntime", "hello.kt", "-d", jar));
         runJava("hello.run", "-cp", jar, "Hello.HelloPackage");
     }
 
@@ -35,7 +35,7 @@ public class CompilerSmokeTest extends KotlinIntegrationTestBase {
     public void compileAndRunHelloAppFQMain() throws Exception {
         String jar = tmpdir.getTmpDir().getAbsolutePath() + File.separator + "hello.jar";
 
-        assertEquals("compilation failed", 0, runCompiler("hello.compile", "-includeRuntime", "hello.kt", "-jar", jar));
+        assertEquals("compilation failed", 0, runCompiler("hello.compile", "-includeRuntime", "hello.kt", "-d", jar));
         runJava("hello.run", "-cp", jar, "Hello.HelloPackage");
     }
 
@@ -43,7 +43,7 @@ public class CompilerSmokeTest extends KotlinIntegrationTestBase {
     public void compileAndRunHelloAppVarargMain() throws Exception {
         String jar = tmpdir.getTmpDir().getAbsolutePath() + File.separator + "hello.jar";
 
-        assertEquals("compilation failed", 0, runCompiler("hello.compile", "-includeRuntime", "hello.kt", "-jar", jar));
+        assertEquals("compilation failed", 0, runCompiler("hello.compile", "-includeRuntime", "hello.kt", "-d", jar));
         runJava("hello.run", "-cp", jar, "Hello.HelloPackage");
     }
 
@@ -51,7 +51,7 @@ public class CompilerSmokeTest extends KotlinIntegrationTestBase {
     public void compileAndRunModule() throws Exception {
         String jar = tmpdir.getTmpDir().getAbsolutePath() + File.separator + "smoke.jar";
 
-        assertEquals("compilation failed", 0, runCompiler("Smoke.compile", "-module", "Smoke.ktm", "-jar", jar));
+        assertEquals("compilation failed", 0, runCompiler("Smoke.compile", "-module", "Smoke.ktm", "-d", jar));
         runJava("Smoke.run", "-cp", jar + File.pathSeparator + getKotlinRuntimePath(), "Smoke.SmokePackage", "1", "2", "3");
     }
 
@@ -59,14 +59,14 @@ public class CompilerSmokeTest extends KotlinIntegrationTestBase {
     public void compilationFailed() throws Exception {
         String jar = tmpdir.getTmpDir().getAbsolutePath() + File.separator + "smoke.jar";
 
-        runCompiler("hello.compile", "hello.kt", "-jar", jar);
+        runCompiler("hello.compile", "hello.kt", "-d", jar);
     }
 
     @Test
     public void syntaxErrors() throws Exception {
         String jar = tmpdir.getTmpDir().getAbsolutePath() + File.separator + "smoke.jar";
 
-        runCompiler("test.compile", "test.kt", "-jar", jar);
+        runCompiler("test.compile", "test.kt", "-d", jar);
     }
 
     @Test
diff --git a/compiler/testData/cli/jvm/classpath.args b/compiler/testData/cli/jvm/classpath.args
index 76f5eeb4053..80f62e61324 100644
--- a/compiler/testData/cli/jvm/classpath.args
+++ b/compiler/testData/cli/jvm/classpath.args
@@ -1,3 +1,3 @@
 $TESTDATA_DIR$/classpath.kt
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/conflictingOverloads.args b/compiler/testData/cli/jvm/conflictingOverloads.args
index 7e9dfcea5a3..7a88a051805 100644
--- a/compiler/testData/cli/jvm/conflictingOverloads.args
+++ b/compiler/testData/cli/jvm/conflictingOverloads.args
@@ -1,3 +1,3 @@
 $TESTDATA_DIR$/conflictingOverloads.kt
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/diagnosticsOrder.args b/compiler/testData/cli/jvm/diagnosticsOrder.args
index 539695486ca..1d9c2d3c909 100644
--- a/compiler/testData/cli/jvm/diagnosticsOrder.args
+++ b/compiler/testData/cli/jvm/diagnosticsOrder.args
@@ -1,4 +1,4 @@
 $TESTDATA_DIR$/diagnosticsOrder1.kt
 $TESTDATA_DIR$/diagnosticsOrder2.kt
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/help.args b/compiler/testData/cli/jvm/help.args
index e4e7bd57105..97f455ac44e 100644
--- a/compiler/testData/cli/jvm/help.args
+++ b/compiler/testData/cli/jvm/help.args
@@ -1 +1 @@
--help
\ No newline at end of file
+-help
diff --git a/compiler/testData/cli/jvm/help.out b/compiler/testData/cli/jvm/help.out
index 07b188b8a5e..b9015b7214c 100644
--- a/compiler/testData/cli/jvm/help.out
+++ b/compiler/testData/cli/jvm/help.out
@@ -1,5 +1,6 @@
 Usage: kotlinc-jvm <options> <source files>
 where possible options include:
+  -d <directory|jar>         Destination for generated class files
   -jar <path>                Resulting .jar file path
   -output <path>             Output directory path for .class files
   -classpath <path>          Paths where to find user class files
diff --git a/compiler/testData/cli/jvm/inline/off.args b/compiler/testData/cli/jvm/inline/off.args
index 51777fa3cd4..e903efa52a7 100644
--- a/compiler/testData/cli/jvm/inline/off.args
+++ b/compiler/testData/cli/jvm/inline/off.args
@@ -1,3 +1,3 @@
 -inline
 off
--help
\ No newline at end of file
+-help
diff --git a/compiler/testData/cli/jvm/inline/off.out b/compiler/testData/cli/jvm/inline/off.out
index 07b188b8a5e..b9015b7214c 100644
--- a/compiler/testData/cli/jvm/inline/off.out
+++ b/compiler/testData/cli/jvm/inline/off.out
@@ -1,5 +1,6 @@
 Usage: kotlinc-jvm <options> <source files>
 where possible options include:
+  -d <directory|jar>         Destination for generated class files
   -jar <path>                Resulting .jar file path
   -output <path>             Output directory path for .class files
   -classpath <path>          Paths where to find user class files
diff --git a/compiler/testData/cli/jvm/inline/on.args b/compiler/testData/cli/jvm/inline/on.args
index e08990757fc..e9f8ee4a108 100644
--- a/compiler/testData/cli/jvm/inline/on.args
+++ b/compiler/testData/cli/jvm/inline/on.args
@@ -1,3 +1,3 @@
 -inline
 on
--help
\ No newline at end of file
+-help
diff --git a/compiler/testData/cli/jvm/inline/on.out b/compiler/testData/cli/jvm/inline/on.out
index 07b188b8a5e..b9015b7214c 100644
--- a/compiler/testData/cli/jvm/inline/on.out
+++ b/compiler/testData/cli/jvm/inline/on.out
@@ -1,5 +1,6 @@
 Usage: kotlinc-jvm <options> <source files>
 where possible options include:
+  -d <directory|jar>         Destination for generated class files
   -jar <path>                Resulting .jar file path
   -output <path>             Output directory path for .class files
   -classpath <path>          Paths where to find user class files
diff --git a/compiler/testData/cli/jvm/inline/wrong.args b/compiler/testData/cli/jvm/inline/wrong.args
index 58a06826806..5b16e6872f1 100644
--- a/compiler/testData/cli/jvm/inline/wrong.args
+++ b/compiler/testData/cli/jvm/inline/wrong.args
@@ -1,2 +1,2 @@
 -inline
-wrong
\ No newline at end of file
+wrong
diff --git a/compiler/testData/cli/jvm/inline/wrong.out b/compiler/testData/cli/jvm/inline/wrong.out
index 86951a49e25..cd0cad5b6c1 100644
--- a/compiler/testData/cli/jvm/inline/wrong.out
+++ b/compiler/testData/cli/jvm/inline/wrong.out
@@ -1,6 +1,7 @@
 Wrong value for inline option: 'wrong'. Should be 'on'/'off' or 'true'/'false'
 Usage: kotlinc-jvm <options> <source files>
 where possible options include:
+  -d <directory|jar>         Destination for generated class files
   -jar <path>                Resulting .jar file path
   -output <path>             Output directory path for .class files
   -classpath <path>          Paths where to find user class files
diff --git a/compiler/testData/cli/jvm/multipleTextRangesInDiagnosticsOrder.args b/compiler/testData/cli/jvm/multipleTextRangesInDiagnosticsOrder.args
index 0e82a6f807c..55378d30b86 100644
--- a/compiler/testData/cli/jvm/multipleTextRangesInDiagnosticsOrder.args
+++ b/compiler/testData/cli/jvm/multipleTextRangesInDiagnosticsOrder.args
@@ -1,3 +1,3 @@
 $TESTDATA_DIR$/multipleTextRangesInDiagnosticsOrder.kt
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/nonExistingClassPathAndAnnotationsPath.args b/compiler/testData/cli/jvm/nonExistingClassPathAndAnnotationsPath.args
index 327c77342f4..a9acdc9d834 100644
--- a/compiler/testData/cli/jvm/nonExistingClassPathAndAnnotationsPath.args
+++ b/compiler/testData/cli/jvm/nonExistingClassPathAndAnnotationsPath.args
@@ -3,5 +3,5 @@ $TESTDATA_DIR$/simple.kt
 not/existing/path
 -annotations
 yet/another/not/existing/path
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/nonExistingSourcePath.args b/compiler/testData/cli/jvm/nonExistingSourcePath.args
index 22686fad711..6508f5f88cd 100644
--- a/compiler/testData/cli/jvm/nonExistingSourcePath.args
+++ b/compiler/testData/cli/jvm/nonExistingSourcePath.args
@@ -1,3 +1,3 @@
 not/existing/path
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/signatureClash.args b/compiler/testData/cli/jvm/signatureClash.args
index aff3e8edf91..209627d7b7b 100644
--- a/compiler/testData/cli/jvm/signatureClash.args
+++ b/compiler/testData/cli/jvm/signatureClash.args
@@ -1,3 +1,3 @@
 $TESTDATA_DIR$/signatureClash.kt
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/simple.args b/compiler/testData/cli/jvm/simple.args
index dcd428eee26..8b185ce8136 100644
--- a/compiler/testData/cli/jvm/simple.args
+++ b/compiler/testData/cli/jvm/simple.args
@@ -1,3 +1,3 @@
 $TESTDATA_DIR$/simple.kt
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/suppressAllWarningsLowercase.args b/compiler/testData/cli/jvm/suppressAllWarningsLowercase.args
index 4939309f3d7..ce6db8c95ce 100644
--- a/compiler/testData/cli/jvm/suppressAllWarningsLowercase.args
+++ b/compiler/testData/cli/jvm/suppressAllWarningsLowercase.args
@@ -1,5 +1,5 @@
 $TESTDATA_DIR$/../warnings.kt
 -suppress
 warnings
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/suppressAllWarningsMixedCase.args b/compiler/testData/cli/jvm/suppressAllWarningsMixedCase.args
index da78a29e104..d10a31176c5 100644
--- a/compiler/testData/cli/jvm/suppressAllWarningsMixedCase.args
+++ b/compiler/testData/cli/jvm/suppressAllWarningsMixedCase.args
@@ -1,5 +1,5 @@
 $TESTDATA_DIR$/../warnings.kt
 -suppress
 WaRnInGs
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/wrongAbiVersion.args b/compiler/testData/cli/jvm/wrongAbiVersion.args
index c6220651a44..0cc655dfe8c 100644
--- a/compiler/testData/cli/jvm/wrongAbiVersion.args
+++ b/compiler/testData/cli/jvm/wrongAbiVersion.args
@@ -1,5 +1,5 @@
 $TESTDATA_DIR$/wrongAbiVersion.kt
 -classpath
 $TESTDATA_DIR$/wrongAbiVersionLib
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/testData/cli/jvm/wrongArgument.args b/compiler/testData/cli/jvm/wrongArgument.args
index 432b203f156..e327439d84d 100644
--- a/compiler/testData/cli/jvm/wrongArgument.args
+++ b/compiler/testData/cli/jvm/wrongArgument.args
@@ -1 +1 @@
--wrongArgument
\ No newline at end of file
+-wrongArgument
diff --git a/compiler/testData/cli/jvm/wrongArgument.out b/compiler/testData/cli/jvm/wrongArgument.out
index abd6e5c9793..dd11745c274 100644
--- a/compiler/testData/cli/jvm/wrongArgument.out
+++ b/compiler/testData/cli/jvm/wrongArgument.out
@@ -1,6 +1,7 @@
 Invalid argument: -wrongArgument
 Usage: kotlinc-jvm <options> <source files>
 where possible options include:
+  -d <directory|jar>         Destination for generated class files
   -jar <path>                Resulting .jar file path
   -output <path>             Output directory path for .class files
   -classpath <path>          Paths where to find user class files
diff --git a/compiler/testData/cli/jvm/wrongKotlinSignature.args b/compiler/testData/cli/jvm/wrongKotlinSignature.args
index e9d7639ff43..05eebd95c7b 100644
--- a/compiler/testData/cli/jvm/wrongKotlinSignature.args
+++ b/compiler/testData/cli/jvm/wrongKotlinSignature.args
@@ -1,5 +1,5 @@
 $TESTDATA_DIR$/wrongKotlinSignature.kt
 -classpath
 $TESTDATA_DIR$/wrongKotlinSignatureLib
--output
+-d
 $TEMP_DIR$
diff --git a/compiler/tests/org/jetbrains/jet/MockLibraryUtil.java b/compiler/tests/org/jetbrains/jet/MockLibraryUtil.java
index 1df01ad5bea..c24d2c435af 100644
--- a/compiler/tests/org/jetbrains/jet/MockLibraryUtil.java
+++ b/compiler/tests/org/jetbrains/jet/MockLibraryUtil.java
@@ -37,7 +37,7 @@ import java.util.List;
 import java.util.regex.Pattern;
 import java.util.zip.ZipOutputStream;
 
-import static junit.framework.Assert.assertEquals;
+import static org.junit.Assert.assertEquals;
 
 public class MockLibraryUtil {
 
@@ -98,7 +98,7 @@ public class MockLibraryUtil {
             //noinspection IOResourceOpenedButNotSafelyClosed
             Enum<?> invocationResult = (Enum<?>) execMethod.invoke(
                     compilerObject, new PrintStream(outStream),
-                    new String[] {sourcesPath, "-output", outDir.getAbsolutePath(), "-classpath", sourcesPath}
+                    new String[] {sourcesPath, "-d", outDir.getAbsolutePath(), "-classpath", sourcesPath}
             );
 
             assertEquals(new String(outStream.toByteArray()), ExitCode.OK.name(), invocationResult.name());
diff --git a/compiler/tests/org/jetbrains/jet/codegen/forTestCompile/ForTestCompileRuntime.java b/compiler/tests/org/jetbrains/jet/codegen/forTestCompile/ForTestCompileRuntime.java
index 84a44315ffc..9cf40b5a16d 100644
--- a/compiler/tests/org/jetbrains/jet/codegen/forTestCompile/ForTestCompileRuntime.java
+++ b/compiler/tests/org/jetbrains/jet/codegen/forTestCompile/ForTestCompileRuntime.java
@@ -88,7 +88,7 @@ public class ForTestCompileRuntime {
             @NotNull String... src
     ) {
         List<String> args = KotlinPackage.arrayListOf(
-                "-output", destDir.getPath(),
+                "-d", destDir.getPath(),
                 "-noStdlib",
                 "-noJdkAnnotations",
                 "-suppress", "warnings",
diff --git a/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileEnvironmentTest.java b/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileEnvironmentTest.java
index 37614329756..ee2e3171c11 100644
--- a/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileEnvironmentTest.java
+++ b/compiler/tests/org/jetbrains/jet/jvm/compiler/CompileEnvironmentTest.java
@@ -44,13 +44,15 @@ public class CompileEnvironmentTest extends TestCase {
             File stdlib = ForTestCompileRuntime.runtimeJarForTests();
             File jdkAnnotations = JetTestUtils.getJdkAnnotationsJar();
             File resultJar = new File(tempDir, "result.jar");
-            ExitCode rv = new K2JVMCompiler().exec(System.out,
-                                                   "-module", JetTestCaseBuilder.getTestDataPathBase() + "/compiler/smoke/Smoke.ktm",
-                                                   "-jar", resultJar.getAbsolutePath(),
-                                                   "-noStdlib",
-                                                   "-classpath", stdlib.getAbsolutePath(),
-                                                   "-noJdkAnnotations",
-                                                   "-annotations", jdkAnnotations.getAbsolutePath());
+            ExitCode rv = new K2JVMCompiler().exec(
+                    System.out,
+                    "-module", JetTestCaseBuilder.getTestDataPathBase() + "/compiler/smoke/Smoke.ktm",
+                    "-d", resultJar.getAbsolutePath(),
+                    "-noStdlib",
+                    "-classpath", stdlib.getAbsolutePath(),
+                    "-noJdkAnnotations",
+                    "-annotations", jdkAnnotations.getAbsolutePath()
+            );
             Assert.assertEquals("compilation completed with non-zero code", ExitCode.OK, rv);
             FileInputStream fileInputStream = new FileInputStream(resultJar);
             try {
@@ -81,9 +83,8 @@ public class CompileEnvironmentTest extends TestCase {
             File jdkAnnotations = JetTestUtils.getJdkAnnotationsJar();
             ExitCode exitCode = new K2JVMCompiler().exec(
                     System.out,
-                    JetTestCaseBuilder.getTestDataPathBase() +
-                    "/compiler/smoke/Smoke.kt",
-                    "-output", out.getAbsolutePath(),
+                    JetTestCaseBuilder.getTestDataPathBase() + "/compiler/smoke/Smoke.kt",
+                    "-d", out.getAbsolutePath(),
                     "-noStdlib",
                     "-classpath", stdlib.getAbsolutePath(),
                     "-noJdkAnnotations",
diff --git a/libraries/tools/kdoc/src/main/kotlin/org/jetbrains/kotlin/doc/KDocCompiler.kt b/libraries/tools/kdoc/src/main/kotlin/org/jetbrains/kotlin/doc/KDocCompiler.kt
index ec4148c4472..a29b8d52893 100644
--- a/libraries/tools/kdoc/src/main/kotlin/org/jetbrains/kotlin/doc/KDocCompiler.kt
+++ b/libraries/tools/kdoc/src/main/kotlin/org/jetbrains/kotlin/doc/KDocCompiler.kt
@@ -34,7 +34,7 @@ class KDocCompiler() : K2JVMCompiler() {
     }
 
     protected override fun usage(target : PrintStream) {
-        target.println("Usage: KDocCompiler -docOutput <docOutputDir> [-output <outputDir>|-jar <jarFileName>] [-stdlib <path to runtime.jar>] [<filename or dirname>|-module <module file>] [-includeRuntime]");
+        target.println("Usage: KDocCompiler -docOutput <docOutputDir> -d [<outputDir>|<jarFileName>] [-stdlib <path to runtime.jar>] [<filename or dirname>|-module <module file>] [-includeRuntime]");
     }
 }