diff --git a/compiler/backend/src/org/jetbrains/jet/compiler/CompileEnvironment.java b/compiler/backend/src/org/jetbrains/jet/compiler/CompileEnvironment.java
index 5945636819d..cd92630c416 100644
--- a/compiler/backend/src/org/jetbrains/jet/compiler/CompileEnvironment.java
+++ b/compiler/backend/src/org/jetbrains/jet/compiler/CompileEnvironment.java
@@ -10,6 +10,7 @@ import com.intellij.util.Function;
 import com.intellij.util.Processor;
 import jet.modules.IModuleBuilder;
 import jet.modules.IModuleSetBuilder;
+import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jet.JetCoreEnvironment;
 import org.jetbrains.jet.codegen.ClassFileFactory;
 import org.jetbrains.jet.codegen.GeneratedClassLoader;
@@ -154,7 +155,12 @@ public class CompileEnvironment {
         final String directory = new File(moduleFile).getParent();
         for (IModuleBuilder moduleBuilder : moduleSetBuilder.getModules()) {
             ClassFileFactory moduleFactory = compileModule(moduleBuilder, directory);
-            writeToJar(moduleFactory, new File(directory, moduleBuilder.getModuleName() + ".jar").getPath(), null, true);
+            final String path = new File(directory, moduleBuilder.getModuleName() + ".jar").getPath();
+            try {
+                writeToJar(moduleFactory, new FileOutputStream(path), null, true);
+            } catch (FileNotFoundException e) {
+                throw new CompileEnvironmentException("Invalid jar path " + path, e);
+            }
         }
     }
 
@@ -232,7 +238,7 @@ public class CompileEnvironment {
        return new File(PathManager.getResourceRoot(CompileEnvironment.class, "/org/jetbrains/jet/compiler/CompileEnvironment.class")).getParentFile().getParentFile().getParent();
     }
 
-    public static void writeToJar(ClassFileFactory factory, String jar, String mainClass, boolean includeRuntime) {
+    public static void writeToJar(ClassFileFactory factory, final OutputStream fos, @Nullable String mainClass, boolean includeRuntime) {
         try {
             Manifest manifest = new Manifest();
             final Attributes mainAttributes = manifest.getMainAttributes();
@@ -241,7 +247,6 @@ public class CompileEnvironment {
             if (mainClass != null) {
                 mainAttributes.putValue("Main-Class", mainClass);
             }
-            FileOutputStream fos = new FileOutputStream(jar);
             JarOutputStream stream = new JarOutputStream(fos, manifest);
             try {
                 for (String file : factory.files()) {
@@ -327,7 +332,11 @@ public class CompileEnvironment {
 
         ClassFileFactory factory = session.generate();
         if (jar != null) {
-            writeToJar(factory, jar, mainClass, true);
+            try {
+                writeToJar(factory, new FileOutputStream(jar), mainClass, true);
+            } catch (FileNotFoundException e) {
+                throw new CompileEnvironmentException("Invalid jar path " + jar, e);
+            }
         }
         else if (outputDir != null) {
             writeToOutputDirectory(factory, outputDir);
diff --git a/compiler/tests/org/jetbrains/jet/compiler/CompileEnvironmentTest.java b/compiler/tests/org/jetbrains/jet/compiler/CompileEnvironmentTest.java
index da76a194917..4b01efe9efd 100644
--- a/compiler/tests/org/jetbrains/jet/compiler/CompileEnvironmentTest.java
+++ b/compiler/tests/org/jetbrains/jet/compiler/CompileEnvironmentTest.java
@@ -6,7 +6,14 @@ import junit.framework.TestCase;
 import org.jetbrains.jet.codegen.ClassFileFactory;
 import org.jetbrains.jet.parsing.JetParsingTest;
 
+import java.io.ByteArrayInputStream;
+import java.io.ByteArrayOutputStream;
 import java.io.File;
+import java.io.IOException;
+import java.util.ArrayList;
+import java.util.List;
+import java.util.jar.JarEntry;
+import java.util.jar.JarInputStream;
 
 /**
  * @author yole
@@ -25,7 +32,7 @@ public class CompileEnvironmentTest extends TestCase {
         super.tearDown();
     }
 
-    public void testSmoke() {
+    public void testSmoke() throws IOException {
         final File activeRtJar = CompileEnvironment.findRtJar(true);
         environment.setJavaRuntime(activeRtJar);
         environment.initializeKotlinRuntime();
@@ -36,5 +43,23 @@ public class CompileEnvironmentTest extends TestCase {
         final ClassFileFactory factory = environment.compileModule(moduleBuilder, testDataDir);
         assertNotNull(factory);
         assertNotNull(factory.asBytes("Smoke/namespace.class"));
+
+        ByteArrayOutputStream baos = new ByteArrayOutputStream();
+        CompileEnvironment.writeToJar(factory, baos, null, false);
+        JarInputStream is = new JarInputStream(new ByteArrayInputStream(baos.toByteArray()));
+        final List<String> entries = listEntries(is);
+        assertTrue(entries.contains("Smoke/namespace.class"));
+    }
+
+    private List<String> listEntries(JarInputStream is) throws IOException {
+        List<String> entries = new ArrayList<String>();
+        while (true) {
+            final JarEntry jarEntry = is.getNextJarEntry();
+            if (jarEntry == null) {
+                break;
+            }
+            entries.add(jarEntry.getName());
+        }
+        return entries;
     }
 }