diff --git a/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompiler.java b/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompiler.java
index 87224c82ed4..f3b7f649ecf 100644
--- a/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompiler.java
+++ b/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompiler.java
@@ -156,9 +156,8 @@ public class K2JSCompiler extends CLICompiler<K2JSCompilerArguments> {
         String moduleId = FileUtil.getNameWithoutExtension(new File(arguments.outputFile));
         if (arguments.libraryFiles != null) {
             return new LibrarySourcesConfig(project, moduleId, Arrays.asList(arguments.libraryFiles), ecmaVersion);
-        } if (arguments.libraryDirectories != null) {
-            return new LibrarySourceDirectoriesConfig(project, moduleId, arguments.libraryDirectories, ecmaVersion);
-        } else {
+        }
+        else {
             // lets discover the JS library definitions on the classpath
             return new ClassPathLibraryDefintionsConfig(project, moduleId, ecmaVersion);
         }
diff --git a/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompilerArguments.java b/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompilerArguments.java
index bc5b3fc1868..7a9af0d4d77 100644
--- a/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompilerArguments.java
+++ b/compiler/cli/src/org/jetbrains/jet/cli/js/K2JSCompilerArguments.java
@@ -37,9 +37,6 @@ public class K2JSCompilerArguments extends CompilerArguments {
     @Argument(value = "libraryFiles", description = "Path to zipped lib sources or kotlin files")
     public String[] libraryFiles;
 
-    @Argument(value = "libraryDirectories", description = "Path to directory containing source kotlin files")
-    public String[] libraryDirectories;
-
     @Argument(value = "sourceFiles", description = "Source files (dir or file)")
     public String[] sourceFiles;
 
diff --git a/js/js.tests/test/org/jetbrains/k2js/test/semantics/CompileMavenGeneratedJSLibrary.java b/js/js.tests/test/org/jetbrains/k2js/test/semantics/CompileMavenGeneratedJSLibrary.java
index 7ee13c6c27f..61ec3ca41e3 100644
--- a/js/js.tests/test/org/jetbrains/k2js/test/semantics/CompileMavenGeneratedJSLibrary.java
+++ b/js/js.tests/test/org/jetbrains/k2js/test/semantics/CompileMavenGeneratedJSLibrary.java
@@ -95,7 +95,7 @@ public class CompileMavenGeneratedJSLibrary extends SingleFileTranslationTest {
             arguments.outputFile = getOutputFilePath(getTestName(false) + ".compiler.kt", version);
             arguments.sourceFiles = files.toArray(new String[files.size()]);
             arguments.verbose = true;
-            arguments.libraryDirectories = new String[] {generatedJsDefinitionsDir};
+            arguments.libraryFiles = new String[] {generatedJsDefinitionsDir};
             System.out.println("Compiling with version: " + version + " to: " + arguments.outputFile);
             ExitCode answer = compiler.exec(System.out, arguments);
             assertEquals("Compile failed", ExitCode.OK, answer);