diff --git a/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/argumentUtils.kt b/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/argumentUtils.kt
index 46d1ca14de5..f7f4d240ccb 100644
--- a/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/argumentUtils.kt
+++ b/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/argumentUtils.kt
@@ -41,7 +41,7 @@ fun <T : Any> copyBean(bean: T) = copyFields(bean, bean::class.java.newInstance(
 
 fun <From : Any, To : From> mergeBeans(from: From, to: To): To {
     // TODO: rewrite when updated version of com.intellij.util.xmlb is available on TeamCity
-    return copyFields(from, XmlSerializerUtil.createCopy(to), false, collectFieldsToCopy(from::class.java, false))
+    return copyFields(from, to, false, collectFieldsToCopy(from::class.java, false))
 }
 
 fun <From : Any, To : Any> copyInheritedFields(from: From, to: To) = copyFields(from, to, true, collectFieldsToCopy(from::class.java, true))
diff --git a/idea/src/org/jetbrains/kotlin/idea/facet/facetUtils.kt b/idea/src/org/jetbrains/kotlin/idea/facet/facetUtils.kt
index 9166242434b..1608f12dd4d 100644
--- a/idea/src/org/jetbrains/kotlin/idea/facet/facetUtils.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/facet/facetUtils.kt
@@ -66,8 +66,8 @@ fun KotlinFacetSettings.initializeIfNeeded(
     if (compilerArguments == null) {
         val targetPlatformKind = platformKind ?: getDefaultTargetPlatform(module, rootModel)
         compilerArguments = targetPlatformKind.createCompilerArguments().apply {
-            mergeBeans(commonArguments, this)
             targetPlatformKind.getPlatformCompilerArgumentsByProject(module.project)?.let { mergeBeans(it, this) }
+            mergeBeans(commonArguments, this)
         }
     }
 
diff --git a/idea/testData/configuration/facetWithProjectSettings/.idea/compiler.xml b/idea/testData/configuration/facetWithProjectSettings/.idea/compiler.xml
new file mode 100644
index 00000000000..1c358218b27
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/.idea/compiler.xml
@@ -0,0 +1,22 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+    <component name="CompilerConfiguration">
+        <resourceExtensions />
+        <wildcardResourcePatterns>
+            <entry name="!?*.java" />
+            <entry name="!?*.form" />
+            <entry name="!?*.class" />
+            <entry name="!?*.groovy" />
+            <entry name="!?*.scala" />
+            <entry name="!?*.flex" />
+            <entry name="!?*.kt" />
+            <entry name="!?*.clj" />
+            <entry name="!?*.aj" />
+        </wildcardResourcePatterns>
+        <annotationProcessing>
+            <profile default="true" name="Default" enabled="false">
+                <processorPath useClasspath="true" />
+            </profile>
+        </annotationProcessing>
+    </component>
+</project>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/.idea/copyright/profiles_settings.xml b/idea/testData/configuration/facetWithProjectSettings/.idea/copyright/profiles_settings.xml
new file mode 100644
index 00000000000..e7bedf3377d
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/.idea/copyright/profiles_settings.xml
@@ -0,0 +1,3 @@
+<component name="CopyrightManager">
+  <settings default="" />
+</component>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/.idea/kotlinc.xml b/idea/testData/configuration/facetWithProjectSettings/.idea/kotlinc.xml
new file mode 100644
index 00000000000..983760c4d74
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/.idea/kotlinc.xml
@@ -0,0 +1,10 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+    <component name="KotlinCommonCompilerArguments">
+        <option name="languageVersion" value="1.1" />
+        <option name="apiVersion" value="1.1" />
+    </component>
+    <component name="KotlinCompilerSettings">
+        <option name="additionalArguments" value="-version -Xallow-kotlin-package -Xskip-metadata-version-check" />
+    </component>
+</project>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/.idea/libraries/KotlinJavaRuntime.xml b/idea/testData/configuration/facetWithProjectSettings/.idea/libraries/KotlinJavaRuntime.xml
new file mode 100644
index 00000000000..bcc4ed94e22
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/.idea/libraries/KotlinJavaRuntime.xml
@@ -0,0 +1,10 @@
+<component name="libraryTable">
+    <library name="KotlinJavaRuntime">
+        <CLASSES>
+            <root url="jar://$PROJECT_DIR$/lib/kotlin-runtime.jar!/" />
+        </CLASSES>
+        <JAVADOC />
+        <SOURCES>
+        </SOURCES>
+    </library>
+</component>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/.idea/misc.xml b/idea/testData/configuration/facetWithProjectSettings/.idea/misc.xml
new file mode 100644
index 00000000000..5a967a62c8a
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/.idea/misc.xml
@@ -0,0 +1,6 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="ProjectRootManager" version="2" languageLevel="JDK_1_8" default="true" assert-keyword="true" jdk-15="true" project-jdk-name="1.8" project-jdk-type="JavaSDK">
+    <output url="file://$PROJECT_DIR$/out" />
+  </component>
+</project>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/.idea/modules.xml b/idea/testData/configuration/facetWithProjectSettings/.idea/modules.xml
new file mode 100644
index 00000000000..83db3b6328a
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/.idea/modules.xml
@@ -0,0 +1,8 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+    <component name="ProjectModuleManager">
+        <modules>
+            <module fileurl="file://$PROJECT_DIR$/module.iml" filepath="$PROJECT_DIR$/module.iml" />
+        </modules>
+    </component>
+</project>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/lib/kotlin-runtime.jar b/idea/testData/configuration/facetWithProjectSettings/lib/kotlin-runtime.jar
new file mode 100644
index 00000000000..24854eff673
Binary files /dev/null and b/idea/testData/configuration/facetWithProjectSettings/lib/kotlin-runtime.jar differ
diff --git a/idea/testData/configuration/facetWithProjectSettings/module.iml b/idea/testData/configuration/facetWithProjectSettings/module.iml
new file mode 100644
index 00000000000..155fe0c42bb
--- /dev/null
+++ b/idea/testData/configuration/facetWithProjectSettings/module.iml
@@ -0,0 +1,16 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<module type="JAVA_MODULE" version="4">
+  <component name="NewModuleRootManager" inherit-compiler-output="true">
+    <exclude-output />
+    <content url="file://$MODULE_DIR$">
+      <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
+    </content>
+    <orderEntry type="sourceFolder" forTests="false" />
+    <orderEntry type="library" name="KotlinJavaRuntime" level="project" />
+  </component>
+  <component name="FacetManager">
+      <facet type="kotlin-language" name="Kotlin">
+        <configuration version="2" platform="JVM 1.8" useProjectSettings="true" />
+      </facet>
+    </component>
+</module>
\ No newline at end of file
diff --git a/idea/testData/configuration/facetWithProjectSettings/src/foo.kt b/idea/testData/configuration/facetWithProjectSettings/src/foo.kt
new file mode 100644
index 00000000000..e69de29bb2d
diff --git a/idea/tests/org/jetbrains/kotlin/idea/configuration/ConfigureKotlinInTempDirTest.kt b/idea/tests/org/jetbrains/kotlin/idea/configuration/ConfigureKotlinInTempDirTest.kt
index f87d8fdf836..06c0d75b05e 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/configuration/ConfigureKotlinInTempDirTest.kt
+++ b/idea/tests/org/jetbrains/kotlin/idea/configuration/ConfigureKotlinInTempDirTest.kt
@@ -78,4 +78,12 @@ class ConfigureKotlinInTempDirTest : AbstractConfigureKotlinTest() {
         Assert.assertEquals("1.0", settings.languageLevel!!.description)
         Assert.assertEquals("1.0", settings.apiLevel!!.description)
     }
+
+    fun testFacetWithProjectSettings() {
+        val settings = KotlinFacetSettingsProvider.getInstance(myProject).getInitializedSettings(module)
+        Assert.assertEquals(true, settings.useProjectSettings)
+        Assert.assertEquals("1.1", settings.languageLevel!!.description)
+        Assert.assertEquals("1.1", settings.apiLevel!!.description)
+        Assert.assertEquals("-version -Xallow-kotlin-package -Xskip-metadata-version-check", settings.compilerSettings!!.additionalArguments)
+    }
 }
diff --git a/jps-plugin/src/org/jetbrains/kotlin/compilerRunner/JpsKotlinCompilerRunner.kt b/jps-plugin/src/org/jetbrains/kotlin/compilerRunner/JpsKotlinCompilerRunner.kt
index ac426c7192d..7326e908566 100644
--- a/jps-plugin/src/org/jetbrains/kotlin/compilerRunner/JpsKotlinCompilerRunner.kt
+++ b/jps-plugin/src/org/jetbrains/kotlin/compilerRunner/JpsKotlinCompilerRunner.kt
@@ -16,6 +16,7 @@
 
 package org.jetbrains.kotlin.compilerRunner
 
+import com.intellij.util.xmlb.XmlSerializerUtil
 import org.jetbrains.jps.api.GlobalOptions
 import org.jetbrains.kotlin.cli.common.ExitCode
 import org.jetbrains.kotlin.cli.common.KOTLIN_COMPILER_ENVIRONMENT_KEEPALIVE_PROPERTY
@@ -57,7 +58,7 @@ class JpsKotlinCompilerRunner : KotlinCompilerRunner<JpsCompilerEnvironment>() {
             environment: JpsCompilerEnvironment,
             moduleFile: File
     ) {
-        val arguments = mergeBeans(commonArguments, k2jvmArguments)
+        val arguments = mergeBeans(commonArguments, XmlSerializerUtil.createCopy(k2jvmArguments))
         setupK2JvmArguments(moduleFile, arguments)
         withCompilerSettings(compilerSettings) {
             runCompiler(K2JVM_COMPILER, arguments, environment)
@@ -76,7 +77,7 @@ class JpsKotlinCompilerRunner : KotlinCompilerRunner<JpsCompilerEnvironment>() {
         log.debug("K2JS: common arguments: " + ArgumentUtils.convertArgumentsToStringList(commonArguments))
         log.debug("K2JS: JS arguments: " + ArgumentUtils.convertArgumentsToStringList(k2jsArguments))
 
-        val arguments = mergeBeans(commonArguments, k2jsArguments)
+        val arguments = mergeBeans(commonArguments, XmlSerializerUtil.createCopy(k2jsArguments))
         log.debug("K2JS: merged arguments: " + ArgumentUtils.convertArgumentsToStringList(arguments))
 
         setupK2JsArguments(outputFile, sourceFiles, libraries, arguments)