diff --git a/build.xml b/build.xml
index 2b31fc8534e..dc174b339b4 100644
--- a/build.xml
+++ b/build.xml
@@ -73,6 +73,7 @@
             <arg value="-output"/>
             <arg value="${output}/classes/jdk-headers"/>
             <arg value="-ignoreErrors"/>
+            <arg value="-transformNamesToJava"/>
         </java>
     </target>
 
diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/ClosureCodegen.java b/compiler/backend/src/org/jetbrains/jet/codegen/ClosureCodegen.java
index 46a4c4be556..c5019a2c3e0 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/ClosureCodegen.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/ClosureCodegen.java
@@ -11,7 +11,6 @@ import org.jetbrains.jet.lang.descriptors.annotations.AnnotationDescriptor;
 import org.jetbrains.jet.lang.psi.JetDeclarationWithBody;
 import org.jetbrains.jet.lang.psi.JetElement;
 import org.jetbrains.jet.lang.psi.JetExpression;
-import org.jetbrains.jet.lang.psi.JetFunctionLiteralExpression;
 import org.jetbrains.jet.lang.resolve.BindingContext;
 import org.jetbrains.jet.lang.resolve.scopes.JetScope;
 import org.jetbrains.jet.lang.resolve.scopes.receivers.ReceiverDescriptor;
@@ -112,7 +111,7 @@ public class ClosureCodegen extends ObjectOrClosureCodegen {
                        funClass,
                        new String[0]
         );
-        cv.visitSource(fun.getContainingFile().getName(), null);
+        cv.visitSource(state.transformFileName(fun.getContainingFile().getName()), null);
 
 
         generateBridge(name, funDescriptor, fun, cv);
diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/GenerationState.java b/compiler/backend/src/org/jetbrains/jet/codegen/GenerationState.java
index ef735245949..5ef4d37c4e4 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/GenerationState.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/GenerationState.java
@@ -10,6 +10,7 @@ import com.intellij.psi.PsiElement;
 import com.intellij.util.containers.Stack;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.jet.codegen.intrinsics.IntrinsicMethods;
+import org.jetbrains.jet.compiler.FileNameTransformer;
 import org.jetbrains.jet.lang.cfg.pseudocode.JetControlFlowDataTraceFactory;
 import org.jetbrains.jet.lang.descriptors.ClassDescriptor;
 import org.jetbrains.jet.lang.descriptors.ConstructorDescriptor;
@@ -33,11 +34,18 @@ public class GenerationState {
     private final JetStandardLibrary standardLibrary;
     private final IntrinsicMethods intrinsics;
 
+    private final FileNameTransformer fileNameTransformer;
+
     public GenerationState(Project project, ClassBuilderFactory builderFactory) {
+        this(project, builderFactory, FileNameTransformer.IDENTITY);
+    }
+
+    public GenerationState(Project project, ClassBuilderFactory builderFactory, FileNameTransformer fileNameTransformer) {
         this.project = project;
         this.standardLibrary = JetStandardLibrary.getJetStandardLibrary(project);
         this.factory = new ClassFileFactory(builderFactory, this);
         this.intrinsics = new IntrinsicMethods(project, standardLibrary);
+        this.fileNameTransformer = fileNameTransformer;
     }
 
     @NotNull
@@ -186,4 +194,9 @@ public class GenerationState {
 
         return answer.toString();
     }
+
+    @NotNull
+    public String transformFileName(@NotNull String fileName) {
+        return fileNameTransformer.transformFileName(fileName);
+    }
 }
diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/ImplementationBodyCodegen.java b/compiler/backend/src/org/jetbrains/jet/codegen/ImplementationBodyCodegen.java
index a7f0f9e682a..68426aab20c 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/ImplementationBodyCodegen.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/ImplementationBodyCodegen.java
@@ -14,7 +14,6 @@ import org.jetbrains.jet.lang.types.TypeProjection;
 import org.jetbrains.jet.lexer.JetTokens;
 import org.objectweb.asm.AnnotationVisitor;
 import org.objectweb.asm.MethodVisitor;
-import org.objectweb.asm.Opcodes;
 import org.objectweb.asm.Type;
 import org.objectweb.asm.commons.InstructionAdapter;
 import org.objectweb.asm.commons.Method;
@@ -91,7 +90,7 @@ public class ImplementationBodyCodegen extends ClassBodyCodegen {
                       signature.getSuperclassName(),
                       signature.getInterfaces().toArray(new String[0])
         );
-        v.visitSource(myClass.getContainingFile().getName(), null);
+        v.visitSource(state.transformFileName(myClass.getContainingFile().getName()), null);
 
         ClassDescriptor container = getContainingClassDescriptor(descriptor);
         if(container != null) {
diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/NamespaceCodegen.java b/compiler/backend/src/org/jetbrains/jet/codegen/NamespaceCodegen.java
index 9884dbe2c25..c70c7ac81a0 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/NamespaceCodegen.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/NamespaceCodegen.java
@@ -41,7 +41,7 @@ public class NamespaceCodegen {
                       new String[0]
         );
         // TODO figure something out for a namespace that spans multiple files
-        v.visitSource(sourceFile.getName(), null);
+        v.visitSource(state.transformFileName(sourceFile.getName()), null);
     }
 
     public void generate(JetFile file) {
diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/TraitImplBodyCodegen.java b/compiler/backend/src/org/jetbrains/jet/codegen/TraitImplBodyCodegen.java
index 7ef9ef7be3f..7f1afbf006c 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/TraitImplBodyCodegen.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/TraitImplBodyCodegen.java
@@ -54,7 +54,7 @@ public class TraitImplBodyCodegen extends ClassBodyCodegen {
                       "java/lang/Object",
                       new String[0]
         );
-        v.visitSource(myClass.getContainingFile().getName(), null);
+        v.visitSource(state.transformFileName(myClass.getContainingFile().getName()), null);
     }
 
     private String jvmName() {
diff --git a/compiler/backend/src/org/jetbrains/jet/compiler/FileNameTransformer.java b/compiler/backend/src/org/jetbrains/jet/compiler/FileNameTransformer.java
new file mode 100644
index 00000000000..68de18537fb
--- /dev/null
+++ b/compiler/backend/src/org/jetbrains/jet/compiler/FileNameTransformer.java
@@ -0,0 +1,19 @@
+package org.jetbrains.jet.compiler;
+
+import org.jetbrains.annotations.NotNull;
+
+/**
+ * @author abreslav
+ */
+public interface FileNameTransformer {
+    FileNameTransformer IDENTITY = new FileNameTransformer() {
+        @NotNull
+        @Override
+        public String transformFileName(@NotNull String fileName) {
+            return fileName;
+        }
+    };
+
+    @NotNull
+    String transformFileName(@NotNull String fileName);
+}
diff --git a/compiler/cli/src/org/jetbrains/jet/cli/KotlinCompiler.java b/compiler/cli/src/org/jetbrains/jet/cli/KotlinCompiler.java
index 2db7d09a465..0cebe6264fb 100644
--- a/compiler/cli/src/org/jetbrains/jet/cli/KotlinCompiler.java
+++ b/compiler/cli/src/org/jetbrains/jet/cli/KotlinCompiler.java
@@ -2,8 +2,10 @@ package org.jetbrains.jet.cli;
 
 import com.sampullara.cli.Args;
 import com.sampullara.cli.Argument;
+import org.jetbrains.annotations.NotNull;
 import org.jetbrains.jet.compiler.CompileEnvironment;
 import org.jetbrains.jet.compiler.CompileEnvironmentException;
+import org.jetbrains.jet.compiler.FileNameTransformer;
 
 import java.io.PrintStream;
 
@@ -13,6 +15,14 @@ import java.io.PrintStream;
  */
 @SuppressWarnings("UseOfSystemOutOrSystemErr")
 public class KotlinCompiler {
+    private static final FileNameTransformer ANY_EXTENSION_TO_JAVA = new FileNameTransformer() {
+        @NotNull
+        @Override
+        public String transformFileName(@NotNull String fileName) {
+            return fileName.replaceFirst("\\.\\w+$", ".java");
+        }
+    };
+
     private KotlinCompiler() {
     }
 
@@ -40,6 +50,9 @@ public class KotlinCompiler {
 
         @Argument(value = "ignoreErrors", description = "Emit byte code even if there are compilation errors (not recommended)")
         public boolean ignoreErrors;
+
+        @Argument(value = "transformNamesToJava", description = "Transform Kotlin file names to *.java. This option is needed for compiling kotlinized Java library headers")
+        public boolean transformNamesToJava;
     }
 
     private static void usage(PrintStream target) {
@@ -79,7 +92,7 @@ public class KotlinCompiler {
             return 0;
         }
 
-        CompileEnvironment environment = new CompileEnvironment();
+        CompileEnvironment environment = new CompileEnvironment(arguments.transformNamesToJava ? ANY_EXTENSION_TO_JAVA : FileNameTransformer.IDENTITY);
         environment.setIgnoreErrors(arguments.ignoreErrors);
 
         if (arguments.stdlib != null) {
diff --git a/compiler/cli/src/org/jetbrains/jet/compiler/CompileEnvironment.java b/compiler/cli/src/org/jetbrains/jet/compiler/CompileEnvironment.java
index 07b24d67044..72a599d9f26 100644
--- a/compiler/cli/src/org/jetbrains/jet/compiler/CompileEnvironment.java
+++ b/compiler/cli/src/org/jetbrains/jet/compiler/CompileEnvironment.java
@@ -35,17 +35,23 @@ public class CompileEnvironment {
     private JetCoreEnvironment myEnvironment;
     private final Disposable myRootDisposable;
     private PrintStream myErrorStream = System.out;
+    private final FileNameTransformer myFileNameTransformer;
     private URL myStdlib;
 
     private boolean ignoreErrors = false;
 
     public CompileEnvironment() {
+        this(FileNameTransformer.IDENTITY);
+    }
+
+    public CompileEnvironment(FileNameTransformer fileNameTransformer) {
         myRootDisposable = new Disposable() {
             @Override
             public void dispose() {
             }
         };
         myEnvironment = new JetCoreEnvironment(myRootDisposable);
+        myFileNameTransformer = fileNameTransformer;
     }
 
     public void setErrorStream(PrintStream errorStream) {
@@ -148,7 +154,7 @@ public class CompileEnvironment {
     }
 
     public List<Module> loadModuleScript(String moduleFile) {
-        CompileSession scriptCompileSession = new CompileSession(myEnvironment);
+        CompileSession scriptCompileSession = new CompileSession(myEnvironment, myFileNameTransformer);
         scriptCompileSession.addSources(moduleFile);
         ensureRuntime();
 
@@ -289,7 +295,7 @@ public class CompileEnvironment {
     }
 
     public boolean compileBunchOfSources(String sourceFileOrDir, String jar, String outputDir, boolean includeRuntime) {
-        CompileSession session = new CompileSession(myEnvironment);
+        CompileSession session = new CompileSession(myEnvironment, myFileNameTransformer);
         session.addSources(sourceFileOrDir);
 
         String mainClass = null;
diff --git a/compiler/cli/src/org/jetbrains/jet/compiler/CompileSession.java b/compiler/cli/src/org/jetbrains/jet/compiler/CompileSession.java
index 62b6efad28c..f0c6279baed 100644
--- a/compiler/cli/src/org/jetbrains/jet/compiler/CompileSession.java
+++ b/compiler/cli/src/org/jetbrains/jet/compiler/CompileSession.java
@@ -29,6 +29,7 @@ public class CompileSession {
     private final JetCoreEnvironment myEnvironment;
     private final List<JetFile> mySourceFiles = new ArrayList<JetFile>();
     private final List<JetFile> myLibrarySourceFiles = new ArrayList<JetFile>();
+    private final FileNameTransformer myFileNameTransformer;
     private List<String> myErrors = new ArrayList<String>();
 
     public BindingContext getMyBindingContext() {
@@ -38,7 +39,12 @@ public class CompileSession {
     private BindingContext myBindingContext;
 
     public CompileSession(JetCoreEnvironment environment) {
+        this(environment, FileNameTransformer.IDENTITY);
+    }
+
+    public CompileSession(JetCoreEnvironment environment, FileNameTransformer fileNameTransformer) {
         myEnvironment = environment;
+        myFileNameTransformer = fileNameTransformer;
     }
     
     public void addSources(String path) {
@@ -115,13 +121,13 @@ public class CompileSession {
 
     @NotNull
     public ClassFileFactory generate() {
-        GenerationState generationState = new GenerationState(myEnvironment.getProject(), ClassBuilderFactory.BINARIES);
+        GenerationState generationState = new GenerationState(myEnvironment.getProject(), ClassBuilderFactory.BINARIES, myFileNameTransformer);
         generationState.compileCorrectFiles(myBindingContext, mySourceFiles);
         return generationState.getFactory();
     }
 
     public String generateText() {
-        GenerationState generationState = new GenerationState(myEnvironment.getProject(), ClassBuilderFactory.TEXT);
+        GenerationState generationState = new GenerationState(myEnvironment.getProject(), ClassBuilderFactory.TEXT, myFileNameTransformer);
         generationState.compileCorrectFiles(myBindingContext, mySourceFiles);
         return generationState.createText();
     }