diff --git a/jps/jps-plugin/jps-tests/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt b/jps/jps-plugin/jps-tests/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt
index 238f0029c11..7ada9571307 100644
--- a/jps/jps-plugin/jps-tests/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt
+++ b/jps/jps-plugin/jps-tests/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt
@@ -638,6 +638,19 @@ open class KotlinJpsBuildTest : AbstractKotlinJpsBuildTestCase() {
         assertFilesNotExistInOutput(myProject.modules.get(0), "_DefaultPackage.class")
     }
 
+    fun testDefaultLanguageVersionCustomApiVersion() {
+        initProject(JVM_FULL_RUNTIME)
+        buildAllModules().assertFailed()
+
+        assertEquals(1, myProject.modules.size)
+        val module = myProject.modules.first()
+        val args = JpsKotlinCompilerSettings.getCommonCompilerArguments(module)
+        args.apiVersion = "1.2"
+        JpsKotlinCompilerSettings.setCommonCompilerArguments(myProject, args)
+
+        buildAllModules().assertSuccessful()
+    }
+
     fun testKotlinJavaProject() {
         doTestWithRuntime()
     }
diff --git a/jps/jps-plugin/src/org/jetbrains/kotlin/jps/model/KotlinCommonCompilerArgumentsSerializer.kt b/jps/jps-plugin/src/org/jetbrains/kotlin/jps/model/KotlinCommonCompilerArgumentsSerializer.kt
index 230fb208610..078f7513375 100644
--- a/jps/jps-plugin/src/org/jetbrains/kotlin/jps/model/KotlinCommonCompilerArgumentsSerializer.kt
+++ b/jps/jps-plugin/src/org/jetbrains/kotlin/jps/model/KotlinCommonCompilerArgumentsSerializer.kt
@@ -19,6 +19,7 @@ package org.jetbrains.kotlin.jps.model
 import com.intellij.util.text.VersionComparatorUtil
 import org.jetbrains.jps.model.JpsProject
 import org.jetbrains.kotlin.cli.common.arguments.CommonCompilerArguments
+import org.jetbrains.kotlin.cli.common.arguments.setApiVersionToLanguageVersionIfNeeded
 import org.jetbrains.kotlin.config.SettingConstants.KOTLIN_COMMON_COMPILER_ARGUMENTS_SECTION
 import org.jetbrains.kotlin.jps.JpsKotlinCompilerSettings
 
@@ -26,9 +27,7 @@ internal class KotlinCommonCompilerArgumentsSerializer : BaseJpsCompilerSettings
         KOTLIN_COMMON_COMPILER_ARGUMENTS_SECTION, CommonCompilerArguments::DummyImpl
 ) {
     override fun onLoad(project: JpsProject, settings: CommonCompilerArguments.DummyImpl) {
-        if (VersionComparatorUtil.compare(settings.languageVersion, settings.apiVersion) < 0) {
-            settings.apiVersion = settings.languageVersion
-        }
+        settings.setApiVersionToLanguageVersionIfNeeded()
         JpsKotlinCompilerSettings.setCommonCompilerArguments(project, settings)
     }
 }
diff --git a/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/kotlinProject.iml b/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/kotlinProject.iml
new file mode 100644
index 00000000000..d04ecd6e02e
--- /dev/null
+++ b/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/kotlinProject.iml
@@ -0,0 +1,12 @@
+<?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="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="sourceFolder" forTests="false" />
+    <orderEntry type="module" module-name="kotlinProject" />
+  </component>
+</module>
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/kotlinProject.ipr b/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/kotlinProject.ipr
new file mode 100644
index 00000000000..001ea3380cd
--- /dev/null
+++ b/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/kotlinProject.ipr
@@ -0,0 +1,17 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="CompilerConfiguration">
+    <option name="DEFAULT_COMPILER" value="Javac" />
+  </component>
+  <component name="ProjectModuleManager">
+    <modules>
+      <module fileurl="file://$PROJECT_DIR$/kotlinProject.iml" filepath="$PROJECT_DIR$/kotlinProject.iml" />
+    </modules>
+  </component>
+  <component name="ProjectRootManager" version="2" languageLevel="JDK_1_6" assert-keyword="true" jdk-15="true" project-jdk-name="IDEA_JDK" project-jdk-type="JavaSDK">
+    <output url="file://$PROJECT_DIR$/out" />
+  </component>
+  <component name="KotlinCommonCompilerArguments">
+    <option name="apiVersion" value="1.1" />
+  </component>
+</project>
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/src/main.kt b/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/src/main.kt
new file mode 100644
index 00000000000..bf1bc16df8e
--- /dev/null
+++ b/jps/jps-plugin/testData/general/DefaultLanguageVersionCustomApiVersion/src/main.kt
@@ -0,0 +1,5 @@
+package test
+
+fun main(args: Array<String>) {
+    arrayListOf(1, 2, 3).fill(0)
+}
\ No newline at end of file