diff --git a/compiler/util/src/org/jetbrains/jet/utils/PathUtil.java b/compiler/util/src/org/jetbrains/jet/utils/PathUtil.java
index e17331e4f12..e895d7b83b8 100644
--- a/compiler/util/src/org/jetbrains/jet/utils/PathUtil.java
+++ b/compiler/util/src/org/jetbrains/jet/utils/PathUtil.java
@@ -49,6 +49,13 @@ public class PathUtil {
 
     @NotNull
     public static KotlinPaths getKotlinPathsForJpsPluginOrJpsTests() {
+        // When JPS is run on TeamCity, it can not rely on Kotlin plugin layout,
+        // so the path to Kotlin is specified in a system property
+        String jpsKotlinHome = System.getProperty("jps.kotlin.home");
+        if (jpsKotlinHome != null) {
+            return new KotlinPathsFromHomeDir(new File(jpsKotlinHome));
+        }
+
         if ("true".equalsIgnoreCase(System.getProperty("kotlin.jps.tests"))) {
             return getKotlinPathsForDistDirectory();
         }