diff --git a/ide-compiler-runner/src/org/jetbrains/jet/compiler/runner/CompilerEnvironment.java b/ide-compiler-runner/src/org/jetbrains/jet/compiler/runner/CompilerEnvironment.java
index c883ae5ea7c..a2e19be1a7d 100644
--- a/ide-compiler-runner/src/org/jetbrains/jet/compiler/runner/CompilerEnvironment.java
+++ b/ide-compiler-runner/src/org/jetbrains/jet/compiler/runner/CompilerEnvironment.java
@@ -24,8 +24,6 @@ import org.jetbrains.jet.preloading.ClassCondition;
 import org.jetbrains.jet.utils.KotlinPaths;
 import org.jetbrains.jet.utils.PathUtil;
 
-import java.io.File;
-
 import static org.jetbrains.jet.cli.common.messages.CompilerMessageLocation.NO_LOCATION;
 import static org.jetbrains.jet.cli.common.messages.CompilerMessageSeverity.ERROR;
 
@@ -34,19 +32,16 @@ public final class CompilerEnvironment {
     @NotNull
     public static CompilerEnvironment getEnvironmentFor(
             @NotNull KotlinPaths kotlinPaths,
-            @Nullable File outputDir,
             @Nullable ClassLoader parentClassLoader,
             @NotNull ClassCondition classesToLoadByParent,
             @NotNull Services compilerServices
     ) {
-        return new CompilerEnvironment(kotlinPaths, outputDir, parentClassLoader, classesToLoadByParent, compilerServices);
+        return new CompilerEnvironment(kotlinPaths, parentClassLoader, classesToLoadByParent, compilerServices);
     }
 
     @NotNull
     private final KotlinPaths kotlinPaths;
     @Nullable
-    private final File output;
-    @Nullable
     private final ClassLoader parentClassLoader;
     @NotNull
     private final ClassCondition classesToLoadByParent;
@@ -55,20 +50,18 @@ public final class CompilerEnvironment {
 
     private CompilerEnvironment(
             @NotNull KotlinPaths kotlinPaths,
-            @Nullable File output,
             @Nullable ClassLoader parentClassLoader,
             @NotNull ClassCondition classesToLoadByParent,
             @NotNull Services services
     ) {
         this.kotlinPaths = kotlinPaths;
-        this.output = output;
         this.parentClassLoader = parentClassLoader;
         this.classesToLoadByParent = classesToLoadByParent;
         this.services = services;
     }
 
     public boolean success() {
-        return kotlinPaths.getHomePath().exists() && output != null;
+        return kotlinPaths.getHomePath().exists();
     }
 
     @NotNull
@@ -76,12 +69,6 @@ public final class CompilerEnvironment {
         return kotlinPaths;
     }
 
-    @NotNull
-    public File getOutput() {
-        assert output != null;
-        return output;
-    }
-
     @Nullable
     public ClassLoader getParentClassLoader() {
         return parentClassLoader;
@@ -93,9 +80,6 @@ public final class CompilerEnvironment {
     }
 
     public void reportErrorsTo(@NotNull MessageCollector messageCollector) {
-        if (output == null) {
-            messageCollector.report(ERROR, "[Internal Error] No output directory", NO_LOCATION);
-        }
         if (!kotlinPaths.getHomePath().exists()) {
             messageCollector.report(ERROR, "Cannot find kotlinc home: " + kotlinPaths.getHomePath() + ". Make sure plugin is properly installed, " +
                                            "or specify " + PathUtil.JPS_KOTLIN_HOME_PROPERTY + " system property", NO_LOCATION);
diff --git a/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilder.kt b/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilder.kt
index fd8e782ee22..8dff4f07311 100644
--- a/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilder.kt
+++ b/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilder.kt
@@ -87,8 +87,6 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
 
         val representativeTarget = chunk.representativeTarget()
 
-        val outputDir = representativeTarget.getOutputDir()
-
         val dataManager = context.getProjectDescriptor().dataManager
         val incrementalCaches = chunk.getTargets().keysToMap { dataManager.getStorage(it, IncrementalCacheStorageProvider) }
 
@@ -114,7 +112,6 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
 
         val environment = CompilerEnvironment.getEnvironmentFor(
                 PathUtil.getKotlinPathsForJpsPluginOrJpsTests(),
-                outputDir,
                 javaClass.getClassLoader(),
                 { className ->
                     className!!.startsWith("org.jetbrains.jet.lang.resolve.kotlin.incremental.cache.")
@@ -128,8 +125,6 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
             return ABORT
         }
 
-        assert(outputDir != null, "CompilerEnvironment must have checked for outputDir to be not null, but it didn't")
-
         val outputItemCollector = OutputItemsCollectorImpl()
 
         val project = representativeTarget.getModule().getProject()!!
@@ -162,6 +157,8 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
                 return NOTHING_DONE
             }
 
+            val outputDir = KotlinBuilderModuleScriptGenerator.getOutputDirSafe(representativeTarget)
+
             val outputFile = File(outputDir, representativeTarget.getModule().getName() + ".js")
             val libraryFiles = JpsJsModuleUtils.getLibraryFilesAndDependencies(representativeTarget)
             val k2JsArguments = JpsKotlinCompilerSettings.getK2JsCompilerArguments(project)
diff --git a/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java b/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java
index 8a12efc8468..4bf4e25a006 100644
--- a/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java
+++ b/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java
@@ -31,6 +31,7 @@ import org.jetbrains.jps.builders.java.JavaSourceRootDescriptor;
 import org.jetbrains.jps.builders.logging.ProjectBuilderLogger;
 import org.jetbrains.jps.incremental.CompileContext;
 import org.jetbrains.jps.incremental.ModuleBuildTarget;
+import org.jetbrains.jps.incremental.ProjectBuildException;
 import org.jetbrains.jps.model.java.JpsAnnotationRootType;
 import org.jetbrains.jps.model.java.JpsJavaSdkType;
 import org.jetbrains.jps.model.library.JpsLibrary;
@@ -60,7 +61,7 @@ public class KotlinBuilderModuleScriptGenerator {
             MultiMap<ModuleBuildTarget, File> sourceFiles, // ignored for non-incremental compilation
             boolean hasRemovedFiles
     )
-            throws IOException
+            throws IOException, ProjectBuildException
     {
         KotlinModuleDescriptionBuilder builder = FACTORY.create();
 
@@ -68,11 +69,11 @@ public class KotlinBuilderModuleScriptGenerator {
 
         Set<File> outputDirs = new HashSet<File>();
         for (ModuleBuildTarget target : chunk.getTargets()) {
-            outputDirs.add(getOutputDir(target));
+            outputDirs.add(getOutputDirSafe(target));
         }
         ProjectBuilderLogger logger = context.getLoggingManager().getProjectBuilderLogger();
         for (ModuleBuildTarget target : chunk.getTargets()) {
-            File outputDir = getOutputDir(target);
+            File outputDir = getOutputDirSafe(target);
 
             List<File> moduleSources = new ArrayList<File>(
                     IncrementalCompilation.ENABLED
@@ -108,10 +109,10 @@ public class KotlinBuilderModuleScriptGenerator {
     }
 
     @NotNull
-    private static File getOutputDir(@NotNull ModuleBuildTarget target) {
+    public static File getOutputDirSafe(@NotNull ModuleBuildTarget target) throws ProjectBuildException {
         File outputDir = target.getOutputDir();
         if (outputDir == null) {
-            throw new IllegalStateException("No output directory found for " + target);
+            throw new ProjectBuildException("No output directory found for " + target);
         }
         return outputDir;
     }