diff --git a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/AbstractKotlinAndroidGradleTests.kt b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/AbstractKotlinAndroidGradleTests.kt
index 2f90bb404e0..93ee90b557d 100644
--- a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/AbstractKotlinAndroidGradleTests.kt
+++ b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/AbstractKotlinAndroidGradleTests.kt
@@ -16,7 +16,68 @@ class KotlinAndroidGradleIT :
 class KotlinAndroidWithJackGradleIT : AbstractKotlinAndroidWithJackGradleTests(androidGradlePluginVersion = "2.3.+")
 
 // TODO If we there is a way to fetch the latest Android plugin version, test against the latest version
-class KotlinAndroid32GradleIT : KotlinAndroid3GradleIT(GradleVersionRequired.AtLeast("4.5"), "3.2.0-alpha06")
+class KotlinAndroid32GradleIT : KotlinAndroid3GradleIT(GradleVersionRequired.AtLeast("4.6"), "3.2.0-alpha15") {
+
+    @Test
+    fun testKaptUsingApOptionProvidersAsNestedInputOutput() = with(Project("AndroidProject", gradleVersion)) {
+        setupWorkingDir()
+
+        gradleBuildScript(subproject = "Android").appendText(
+            """
+
+            apply plugin: 'kotlin-kapt'
+
+            class MyNested implements org.gradle.process.CommandLineArgumentProvider {
+                String value = ""
+
+                @InputFile
+                File inputFile = null
+
+                @Override
+                Iterable<String> asArguments() { return [value] }
+            }
+
+            def nested = new MyNested()
+            nested.value = '123'
+            nested.inputFile = file("${'$'}projectDir/in.txt")
+
+            android.applicationVariants.all {
+                it.javaCompileOptions.annotationProcessorOptions.compilerArgumentProviders.add(nested)
+            }
+            """.trimIndent()
+        )
+
+        File(projectDir, "Android/in.txt").appendText("1234")
+
+        val kaptTasks = listOf(":Android:kaptFlavor1DebugKotlin")
+        val javacTasks = listOf(":Android:compileFlavor1DebugJavaWithJavac")
+
+        val buildTasks = (kaptTasks + javacTasks).toTypedArray()
+
+        build(*buildTasks) {
+            assertSuccessful()
+            assertTasksExecuted(kaptTasks + javacTasks)
+        }
+
+        File(projectDir, "Android/in.txt").appendText("5678")
+
+        build(*buildTasks) {
+            assertSuccessful()
+            assertTasksExecuted(kaptTasks)
+            assertTasksUpToDate(javacTasks)
+        }
+
+        gradleBuildScript(subproject = "Android").modify {
+            it.replace("nested.value = '123'", "nested.value = '456'")
+        }
+
+        build(*buildTasks) {
+            assertSuccessful()
+            assertTasksExecuted(kaptTasks)
+            assertTasksUpToDate(javacTasks)
+        }
+    }
+}
 
 class KotlinAndroid30GradleIT : KotlinAndroid3GradleIT(GradleVersionRequired.AtLeast("4.1"), "3.0.0")
 
diff --git a/libraries/tools/kotlin-gradle-plugin/src/agp25/kotlin/org/jetbrains/kotlin/gradle/plugin/android/Android25ProjectHandler.kt b/libraries/tools/kotlin-gradle-plugin/src/agp25/kotlin/org/jetbrains/kotlin/gradle/plugin/android/Android25ProjectHandler.kt
index e17196f9e73..d6af7166641 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/agp25/kotlin/org/jetbrains/kotlin/gradle/plugin/android/Android25ProjectHandler.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/agp25/kotlin/org/jetbrains/kotlin/gradle/plugin/android/Android25ProjectHandler.kt
@@ -128,6 +128,15 @@ class Android25ProjectHandler(kotlinConfigurationTools: KotlinConfigurationTools
             variantData.registerExternalAptJavaOutput(kaptSourceOutput)
             variantData.dataBindingDependencyArtifactsIfSupported?.let { kaptTask.dependsOn(it) }
         }
+
+        override val annotationProcessorOptionProviders: List<*>
+            get() = try {
+                // Public API added in Android Gradle Plugin 3.2.0-alpha15:
+                val apOptions = variantData.javaCompileOptions.annotationProcessorOptions
+                apOptions.javaClass.getMethod("getCompilerArgumentProviders").invoke(apOptions) as List<*>
+            } catch (e: NoSuchMethodException) {
+                emptyList<Any>()
+            }
     }
 
     //TODO A public API is expected for this purpose. Once it is available, use the public API
diff --git a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/Kapt3KotlinGradleSubplugin.kt b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/Kapt3KotlinGradleSubplugin.kt
index 46b58d33d06..a35f5d68cea 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/Kapt3KotlinGradleSubplugin.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/Kapt3KotlinGradleSubplugin.kt
@@ -28,14 +28,16 @@ import org.gradle.api.tasks.SourceSet
 import org.gradle.api.tasks.TaskDependency
 import org.gradle.api.tasks.compile.AbstractCompile
 import org.gradle.api.tasks.compile.JavaCompile
+import org.gradle.process.CommandLineArgumentProvider
+import org.jetbrains.kotlin.gradle.internal.Kapt3GradleSubplugin.Companion.getKaptGeneratedClassesDir
+import org.jetbrains.kotlin.gradle.internal.Kapt3GradleSubplugin.Companion.getKaptGeneratedKotlinSourcesDir
+import org.jetbrains.kotlin.gradle.internal.Kapt3GradleSubplugin.Companion.getKaptGeneratedSourcesDir
 import org.jetbrains.kotlin.gradle.plugin.*
 import org.jetbrains.kotlin.gradle.tasks.CompilerPluginOptions
 import org.jetbrains.kotlin.gradle.tasks.KotlinCompile
-import java.io.File
-import org.jetbrains.kotlin.gradle.internal.Kapt3GradleSubplugin.Companion.getKaptGeneratedSourcesDir
-import org.jetbrains.kotlin.gradle.internal.Kapt3GradleSubplugin.Companion.getKaptGeneratedClassesDir
-import org.jetbrains.kotlin.gradle.internal.Kapt3GradleSubplugin.Companion.getKaptGeneratedKotlinSourcesDir
+import org.jetbrains.kotlin.gradle.utils.isGradleVersionAtLeast
 import java.io.ByteArrayOutputStream
+import java.io.File
 import java.io.ObjectOutputStream
 import java.util.*
 
@@ -69,6 +71,9 @@ abstract class KaptVariantData<T>(val variantData: T) {
             project: Project,
             kaptTask: KaptTask,
             javaTask: AbstractCompile)
+
+    open val annotationProcessorOptionProviders: List<*>
+        get() = emptyList<Any>()
 }
 
 // Subplugin for the Kotlin Gradle plugin
@@ -226,9 +231,20 @@ class Kapt3KotlinGradleSubplugin : KotlinGradleSubplugin<KotlinCompile> {
 
         kotlinSourcesOutputDir.mkdirs()
 
-        val apOptions =
-                (kaptExtension.getAdditionalArguments(project, kaptVariantData?.variantData, androidPlugin) + androidOptions)
-                        .map { SubpluginOption(it.key, it.value) } +
+        val apOptionsFromProviders =
+            if (isGradleVersionAtLeast(4, 6))
+                kaptVariantData?.annotationProcessorOptionProviders
+                    ?.flatMap { (it as CommandLineArgumentProvider).asArguments().map { "" to it.removePrefix("-A") } }
+                    .orEmpty()
+            else
+                emptyList()
+
+        val apOptionsPairsList: List<Pair<String, String>> =
+            kaptExtension.getAdditionalArguments(project, kaptVariantData?.variantData, androidPlugin).toList() +
+                    androidOptions.toList() +
+                    apOptionsFromProviders
+
+        val apOptions = apOptionsPairsList.map { SubpluginOption(it.first, it.second) } +
                 FilesSubpluginOption("kapt.kotlin.generated", listOf(kotlinSourcesOutputDir))
 
         pluginOptions += CompositeSubpluginOption("apoptions", encodeList(apOptions.associate { it.key to it.value }), apOptions)
@@ -312,13 +328,16 @@ class Kapt3KotlinGradleSubplugin : KotlinGradleSubplugin<KotlinCompile> {
 
         if (kaptVariantData != null) {
             kaptVariantData.registerGeneratedJavaSource(project, kaptTask, javaCompile)
-        }
-        else {
+        } else {
             registerGeneratedJavaSource(kaptTask, javaCompile)
         }
 
         kaptTask.kaptClasspathConfigurations = kaptClasspathConfigurations
 
+        kaptVariantData?.annotationProcessorOptionProviders?.let {
+            kaptTask.annotationProcessorOptionProviders.add(it)
+        }
+
         buildAndAddOptionsTo(kaptTask, kaptTask.pluginOptions, aptMode = "apt")
 
         return kaptTask
@@ -366,6 +385,15 @@ class Kapt3KotlinGradleSubplugin : KotlinGradleSubplugin<KotlinCompile> {
             newCompilerArgs.add("-proc:none")
             @Suppress("UNCHECKED_CAST")
             options.compilerArgs = newCompilerArgs as List<String>
+
+            if (isGradleVersionAtLeast(4, 6)) {
+                // Filter out the argument providers that are related to annotation processing and therefore already used by Kapt.
+                // This is done to avoid outputs intersections between Kapt and and javaCompile and make the up-to-date check for
+                // javaCompile more granular as it does not perform annotation processing:
+                if (kaptVariantData != null) {
+                    options.compilerArgumentProviders.removeAll(kaptVariantData.annotationProcessorOptionProviders)
+                }
+            }
         }
     }
 
diff --git a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/KaptTask.kt b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/KaptTask.kt
index 7141fbcd4d5..dcf08af9929 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/KaptTask.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/gradle/internal/KaptTask.kt
@@ -56,6 +56,9 @@ open class KaptTask : ConventionTask(), CompilerArgumentAwareWithInput<K2JVMComp
     @get:OutputDirectory
     lateinit var kotlinSourcesDestinationDir: File
 
+    @get:Nested
+    internal val annotationProcessorOptionProviders: MutableList<Any> = mutableListOf()
+
     override fun createCompilerArgs(): K2JVMCompilerArguments = K2JVMCompilerArguments()
 
     override fun setupCompilerArgs(args: K2JVMCompilerArguments, defaultsOnly: Boolean) {