diff --git a/build.gradle.kts b/build.gradle.kts
index df910a735ca..064f13d9a23 100644
--- a/build.gradle.kts
+++ b/build.gradle.kts
@@ -104,6 +104,7 @@ extra["ideaCoreSdkJars"] = arrayOf("annotations", "asm-all", "guava", "intellij-
 
 extra["compilerModules"] = arrayOf(":compiler:util",
                                    ":compiler:container",
+                                   ":compiler:conditional-preprocessor",
                                    ":compiler:resolution",
                                    ":compiler:serialization",
                                    ":compiler:frontend",
@@ -111,6 +112,7 @@ extra["compilerModules"] = arrayOf(":compiler:util",
                                    ":compiler:frontend.script",
                                    ":compiler:cli-common",
                                    ":compiler:daemon-common",
+                                   ":compiler:daemon",
                                    ":compiler:ir.tree",
                                    ":compiler:ir.psi2ir",
                                    ":compiler:backend-common",
diff --git a/compiler/build.gradle.kts b/compiler/build.gradle.kts
index d93a8760eb5..4cbb61d7cfe 100644
--- a/compiler/build.gradle.kts
+++ b/compiler/build.gradle.kts
@@ -1,5 +1,6 @@
 
 import java.io.File
+import org.gradle.api.tasks.bundling.Jar
 
 apply { plugin("kotlin") }
 
@@ -9,14 +10,6 @@ val compilerModules: Array<String> by rootProject.extra
 val otherCompilerModules = compilerModules.filter { it != path }
 
 dependencies {
-    compileOnly(project(":compiler:cli"))
-    compileOnly(project(":compiler:daemon-common"))
-    compileOnly(project(":compiler:incremental-compilation-impl"))
-    compileOnly(project(":kotlin-build-common"))
-    compileOnly(ideaSdkCoreDeps(*(rootProject.extra["ideaCoreSdkJars"] as Array<String>)))
-    compileOnly(commonDep("org.fusesource.jansi", "jansi"))
-    compileOnly(commonDep("org.jline", "jline"))
-
     testCompile(commonDep("junit:junit"))
     testCompile(project(":kotlin-test:kotlin-test-jvm"))
     testCompile(project(":kotlin-test:kotlin-test-junit"))
@@ -40,23 +33,43 @@ dependencies {
 }
 
 sourceSets {
-    "main" {
-        java.srcDirs("daemon/src",
-                     "conditional-preprocessor/src")
-        resources.srcDir("../idea/src").apply {
-            include("META-INF/extensions/common.xml",
-                    "META-INF/extensions/kotlin2jvm.xml",
-                    "META-INF/extensions/kotlin2js.xml")
-        }
+    "main" {}
+    "test" {
+        projectDefault()
+        java.srcDir("tests-ir-jvm/tests")
+    }
+}
+
+val jar: Jar by tasks
+jar.apply {
+    from(the<JavaPluginConvention>().sourceSets.getByName("main").output)
+    from("../idea/src").apply {
+        include("META-INF/extensions/common.xml",
+                "META-INF/extensions/kotlin2jvm.xml",
+                "META-INF/extensions/kotlin2js.xml")
     }
-    "test" { projectDefault() }
 }
 
 testsJar {}
 
+// TODO: it seems incomlete, find and add missing dependencies
+val testDistProjects = listOf(
+       ":prepare:mock-runtime-for-test",
+       ":kotlin-compiler",
+       ":kotlin-runtime",
+       ":kotlin-script-runtime",
+       ":kotlin-stdlib",
+       ":kotlin-stdlib-jre7",
+       ":kotlin-stdlib-jre8",
+       ":kotlin-stdlib-js",
+       ":kotlin-reflect",
+       ":kotlin-test:kotlin-test-jvm",
+       ":kotlin-test:kotlin-test-junit",
+       ":kotlin-test:kotlin-test-js",
+       ":kotlin-daemon-client")
+
 projectTest {
-    dependsOnTaskIfExistsRec("dist", project = rootProject)
-    dependsOn(":prepare:mock-runtime-for-test:dist")
+    dependsOn(*testDistProjects.map { "$it:dist" }.toTypedArray())
     workingDir = rootDir
     systemProperty("kotlin.test.script.classpath", the<JavaPluginConvention>().sourceSets.getByName("test").output.classesDirs.joinToString(File.pathSeparator))
 }
diff --git a/compiler/conditional-preprocessor/build.gradle.kts b/compiler/conditional-preprocessor/build.gradle.kts
new file mode 100644
index 00000000000..0872fa4f77b
--- /dev/null
+++ b/compiler/conditional-preprocessor/build.gradle.kts
@@ -0,0 +1,20 @@
+
+apply { plugin("kotlin") }
+
+jvmTarget = "1.6"
+
+dependencies {
+    val compile by configurations
+    compile(project(":compiler:cli"))
+    compile(project(":compiler:daemon-common"))
+    compile(project(":compiler:incremental-compilation-impl"))
+    compile(project(":kotlin-build-common"))
+    compile(ideaSdkCoreDeps(*(rootProject.extra["ideaCoreSdkJars"] as Array<String>)))
+    compile(commonDep("org.fusesource.jansi", "jansi"))
+    compile(commonDep("org.jline", "jline"))
+}
+
+sourceSets {
+    "main" { projectDefault() }
+    "test" {}
+}
diff --git a/compiler/daemon/build.gradle.kts b/compiler/daemon/build.gradle.kts
new file mode 100644
index 00000000000..0872fa4f77b
--- /dev/null
+++ b/compiler/daemon/build.gradle.kts
@@ -0,0 +1,20 @@
+
+apply { plugin("kotlin") }
+
+jvmTarget = "1.6"
+
+dependencies {
+    val compile by configurations
+    compile(project(":compiler:cli"))
+    compile(project(":compiler:daemon-common"))
+    compile(project(":compiler:incremental-compilation-impl"))
+    compile(project(":kotlin-build-common"))
+    compile(ideaSdkCoreDeps(*(rootProject.extra["ideaCoreSdkJars"] as Array<String>)))
+    compile(commonDep("org.fusesource.jansi", "jansi"))
+    compile(commonDep("org.jline", "jline"))
+}
+
+sourceSets {
+    "main" { projectDefault() }
+    "test" {}
+}
diff --git a/idea/build.gradle.kts b/idea/build.gradle.kts
index 97ce3110329..6da54c39927 100644
--- a/idea/build.gradle.kts
+++ b/idea/build.gradle.kts
@@ -94,11 +94,13 @@ sourceSets {
                      "idea-completion/src",
                      "idea-live-templates/src",
                      "idea-repl/src")
+        resources.srcDir("idea-maven/resources")
     }
     "test" {
-        java.srcDirs("tests",
-                     "idea-maven/test",
-                     "idea-completion/tests")
+        projectDefault()
+        java.srcDirs("idea-maven/test",
+                     "idea-completion/tests",
+                     "idea-live-templates/tests")
     }
 }
 
diff --git a/jps-plugin/build.gradle.kts b/jps-plugin/build.gradle.kts
index fb3ed4de8f9..36043244ed9 100644
--- a/jps-plugin/build.gradle.kts
+++ b/jps-plugin/build.gradle.kts
@@ -31,7 +31,8 @@ dependencies {
 sourceSets {
     "main" { projectDefault() }
     "test" {
-        java.srcDirs("jps-tests/test")
+        java.srcDirs("jps-tests/test",
+                     "kannotator-jps-plugin-test/test")
     }
 }
 
diff --git a/libraries/tools/kotlin-gradle-plugin/build.gradle b/libraries/tools/kotlin-gradle-plugin/build.gradle
index e18119657ea..f1d9d5f2bc6 100644
--- a/libraries/tools/kotlin-gradle-plugin/build.gradle
+++ b/libraries/tools/kotlin-gradle-plugin/build.gradle
@@ -35,7 +35,7 @@ dependencies {
     compile project(':kotlin-build-common')
     compile project(':compiler:compiler-runner')
     compile project(":compiler:incremental-compilation-impl")
-    compile project(":compiler")
+    compile project(":compiler:daemon")
     compile project(':kotlin-annotation-processing')
 
     compileOnly 'com.android.tools.build:gradle:2.0.0'
diff --git a/settings.gradle b/settings.gradle
index f98a54b6d8a..c8402a42fdf 100644
--- a/settings.gradle
+++ b/settings.gradle
@@ -15,10 +15,12 @@ include ":kotlin-build-common",
         ":compiler",
         ":compiler:util",
         ":compiler:daemon-common",
+        ":compiler:daemon",
         ":kotlin-daemon-client",
         ":kotlin-preloader",
         ":kotlin-runner",
         ":compiler:container",
+        ":compiler:conditional-preprocessor",
         ":compiler:resolution",
         ":compiler:serialization",
         ":compiler:frontend",