diff --git a/jps/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilderModuleScriptGenerator.java b/jps/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilderModuleScriptGenerator.java
index 6d146f3274f..13c4b4f7cfe 100644
--- a/jps/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilderModuleScriptGenerator.java
+++ b/jps/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilderModuleScriptGenerator.java
@@ -32,6 +32,7 @@ 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.JpsJavaExtensionService;
 import org.jetbrains.kotlin.config.IncrementalCompilation;
 import org.jetbrains.kotlin.modules.KotlinModuleXmlBuilder;
 
@@ -61,6 +62,11 @@ public class KotlinBuilderModuleScriptGenerator {
         ProjectBuilderLogger logger = context.getLoggingManager().getProjectBuilderLogger();
         for (ModuleBuildTarget target : chunk.getTargets()) {
             File outputDir = getOutputDirSafe(target);
+            List<File> friendDirs = new ArrayList<File>();
+            File friendDir = getFriendDirSafe(target);
+            if (friendDir != null) {
+                friendDirs.add(friendDir);
+            }
 
             List<File> moduleSources = new ArrayList<File>(
                     IncrementalCompilation.isEnabled()
@@ -85,7 +91,8 @@ public class KotlinBuilderModuleScriptGenerator {
                     findClassPathRoots(target),
                     (JavaModuleBuildTargetType) targetType,
                     // this excludes the output directories from the class path, to be removed for true incremental compilation
-                    outputDirs
+                    outputDirs,
+                    friendDirs
             );
         }
 
@@ -107,6 +114,17 @@ public class KotlinBuilderModuleScriptGenerator {
         return outputDir;
     }
 
+    @Nullable
+    public static File getFriendDirSafe(@NotNull ModuleBuildTarget target) throws ProjectBuildException {
+        if (!target.isTests()) return null;
+
+        File outputDirForProduction = JpsJavaExtensionService.getInstance().getOutputDirectory(target.getModule(), false);
+        if (outputDirForProduction == null) {
+            throw new ProjectBuildException("No output production directory found for " + target);
+        }
+        return outputDirForProduction;
+    }
+
     @NotNull
     private static Collection<File> findClassPathRoots(@NotNull ModuleBuildTarget target) {
         return ContainerUtil.filter(getAllDependencies(target).classes().getRoots(), new Condition<File>() {
diff --git a/jps/jps-plugin/src/org/jetbrains/kotlin/modules/KotlinModuleXmlBuilder.java b/jps/jps-plugin/src/org/jetbrains/kotlin/modules/KotlinModuleXmlBuilder.java
index 73cdd88fd4b..4b48e2340e5 100644
--- a/jps/jps-plugin/src/org/jetbrains/kotlin/modules/KotlinModuleXmlBuilder.java
+++ b/jps/jps-plugin/src/org/jetbrains/kotlin/modules/KotlinModuleXmlBuilder.java
@@ -24,6 +24,7 @@ import org.jetbrains.kotlin.utils.Printer;
 
 import java.io.File;
 import java.util.Collection;
+import java.util.Collections;
 import java.util.List;
 import java.util.Set;
 
@@ -47,7 +48,8 @@ public class KotlinModuleXmlBuilder {
             List<JvmSourceRoot> javaSourceRoots,
             Collection<File> classpathRoots,
             JavaModuleBuildTargetType targetType,
-            Set<File> directoriesToFilterOut
+            Set<File> directoriesToFilterOut,
+            @NotNull List<File> friendDirs
     ) {
         assert !done : "Already done";
 
@@ -65,6 +67,10 @@ public class KotlinModuleXmlBuilder {
         );
         p.pushIndent();
 
+        for (File friendDir : friendDirs) {
+            p.println("<", FRIEND_DIR, " ", PATH, "=\"", getEscapedPath(friendDir), "\"/>");
+        }
+
         for (File sourceFile : sourceFiles) {
             p.println("<", SOURCES, " ", PATH, "=\"", getEscapedPath(sourceFile), "\"/>");
         }
diff --git a/jps/jps-plugin/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt b/jps/jps-plugin/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt
index 3b31cf01de5..f6a96f4e6e4 100644
--- a/jps/jps-plugin/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt
+++ b/jps/jps-plugin/test/org/jetbrains/kotlin/jps/build/KotlinJpsBuildTest.kt
@@ -503,6 +503,21 @@ public class KotlinJpsBuildTest : AbstractKotlinJpsBuildTestCase() {
         checkWhen(touch("module2/src/b.kt"), null, packageClasses("module2", "module2/src/b.kt", "test.TestPackage"))
     }
 
+    public fun testCircularDependenciesSamePackageWithTests() {
+        initProject()
+        val result = makeAll()
+        result.assertSuccessful()
+
+        // Check that outputs are located properly
+        val facadeWithA = findFileInOutputDir(findModule("module1"), "test/AKt.class")
+        val facadeWithB = findFileInOutputDir(findModule("module2"), "test/BKt.class")
+        UsefulTestCase.assertSameElements(getMethodsOfClass(facadeWithA), "<clinit>", "a", "funA", "getA")
+        UsefulTestCase.assertSameElements(getMethodsOfClass(facadeWithB), "<clinit>", "b", "funB", "getB", "setB")
+
+        checkWhen(touch("module1/src/a.kt"), null, packageClasses("module1", "module1/src/a.kt", "test.TestPackage"))
+        checkWhen(touch("module2/src/b.kt"), null, packageClasses("module2", "module2/src/b.kt", "test.TestPackage"))
+    }
+
     public fun testInternalFromAnotherModule() {
         initProject()
         val result = makeAll()
@@ -517,6 +532,13 @@ public class KotlinJpsBuildTest : AbstractKotlinJpsBuildTestCase() {
         result.checkErrors()
     }
 
+    public fun testCircularDependenciesWrongInternalFromTests() {
+        initProject()
+        val result = makeAll()
+        result.assertFailed()
+        result.checkErrors()
+    }
+
     public fun testCircularDependencyWithReferenceToOldVersionLib() {
         initProject()
 
diff --git a/jps/jps-plugin/test/org/jetbrains/kotlin/jvm/compiler/ClasspathOrderTest.kt b/jps/jps-plugin/test/org/jetbrains/kotlin/jvm/compiler/ClasspathOrderTest.kt
index 67d05520359..3408e3537e8 100644
--- a/jps/jps-plugin/test/org/jetbrains/kotlin/jvm/compiler/ClasspathOrderTest.kt
+++ b/jps/jps-plugin/test/org/jetbrains/kotlin/jvm/compiler/ClasspathOrderTest.kt
@@ -47,7 +47,8 @@ public class ClasspathOrderTest : TestCaseWithTmpdir() {
                 listOf(JvmSourceRoot(sourceDir)),
                 listOf(PathUtil.getKotlinPathsForDistDirectory().getRuntimePath()),
                 JavaModuleBuildTargetType.PRODUCTION,
-                setOf()
+                setOf(),
+                emptyList()
         ).asText().toString()
 
         val xml = File(tmpdir, "module.xml")
diff --git a/jps/jps-plugin/test/org/jetbrains/kotlin/modules/KotlinModuleXmlGeneratorTest.java b/jps/jps-plugin/test/org/jetbrains/kotlin/modules/KotlinModuleXmlGeneratorTest.java
index a16f2d3ce01..a30b6c775ad 100644
--- a/jps/jps-plugin/test/org/jetbrains/kotlin/modules/KotlinModuleXmlGeneratorTest.java
+++ b/jps/jps-plugin/test/org/jetbrains/kotlin/modules/KotlinModuleXmlGeneratorTest.java
@@ -34,7 +34,8 @@ public class KotlinModuleXmlGeneratorTest extends TestCase {
                 Collections.singletonList(new JvmSourceRoot(new File("java"), null)),
                 Arrays.asList(new File("cp1"), new File("cp2")),
                 JavaModuleBuildTargetType.PRODUCTION,
-                Collections.<File>emptySet()
+                Collections.<File>emptySet(),
+                Collections.<File>emptyList()
         ).asText().toString();
         KotlinTestUtils.assertEqualsToFile(new File("idea/testData/modules.xml/basic.xml"), actual);
     }
@@ -47,7 +48,8 @@ public class KotlinModuleXmlGeneratorTest extends TestCase {
                 Collections.<JvmSourceRoot>emptyList(),
                 Arrays.asList(new File("cp1"), new File("cp2")),
                 JavaModuleBuildTargetType.PRODUCTION,
-                Collections.singleton(new File("cp1"))
+                Collections.singleton(new File("cp1")),
+                Collections.<File>emptyList()
         ).asText().toString();
         KotlinTestUtils.assertEqualsToFile(new File("idea/testData/modules.xml/filtered.xml"), actual);
     }
@@ -61,7 +63,8 @@ public class KotlinModuleXmlGeneratorTest extends TestCase {
                 Collections.<JvmSourceRoot>emptyList(),
                 Arrays.asList(new File("cp1"), new File("cp2")),
                 JavaModuleBuildTargetType.PRODUCTION,
-                Collections.singleton(new File("cp1"))
+                Collections.singleton(new File("cp1")),
+                Collections.<File>emptyList()
         );
         builder.addModule(
                 "name2",
@@ -70,7 +73,8 @@ public class KotlinModuleXmlGeneratorTest extends TestCase {
                 Collections.<JvmSourceRoot>emptyList(),
                 Arrays.asList(new File("cp12"), new File("cp22")),
                 JavaModuleBuildTargetType.TEST,
-                Collections.singleton(new File("cp12"))
+                Collections.singleton(new File("cp12")),
+                Collections.<File>emptyList()
         );
         String actual = builder.asText().toString();
         KotlinTestUtils.assertEqualsToFile(new File("idea/testData/modules.xml/multiple.xml"), actual);
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/kotlinProject.ipr b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/kotlinProject.ipr
new file mode 100644
index 00000000000..c1a403dd047
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/kotlinProject.ipr
@@ -0,0 +1,32 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="CompilerConfiguration">
+    <option name="DEFAULT_COMPILER" value="Javac" />
+    <resourceExtensions />
+    <annotationProcessing>
+      <profile default="true" name="Default" enabled="false">
+        <processorPath useClasspath="true" />
+      </profile>
+    </annotationProcessing>
+  </component>
+  <component name="CopyrightManager" default="">
+    <module2copyright />
+  </component>
+  <component name="DependencyValidationManager">
+    <option name="SKIP_IMPORT_STATEMENTS" value="false" />
+  </component>
+  <component name="Encoding" useUTFGuessing="true" native2AsciiForPropertiesFiles="false" />
+  <component name="ProjectModuleManager">
+    <modules>
+      <module fileurl="file://$PROJECT_DIR$/module1/module1.iml" filepath="$PROJECT_DIR$/module1/module1.iml" />
+      <module fileurl="file://$PROJECT_DIR$/module2/module2.iml" filepath="$PROJECT_DIR$/module2/module2.iml" />
+    </modules>
+  </component>
+  <component name="ProjectRootManager" version="2" languageLevel="JDK_1_6" assert-keyword="true" jdk-15="true" project-jdk-name="IDEA_JDK" project-jdk-type="JavaSDK">
+    <output url="file://$PROJECT_DIR$/out" />
+  </component>
+  <component name="VcsDirectoryMappings">
+    <mapping directory="" vcs="" />
+  </component>
+</project>
+
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/module1.iml b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/module1.iml
new file mode 100644
index 00000000000..a28a2f8285e
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/module1.iml
@@ -0,0 +1,15 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<module type="JAVA_MODULE" version="4">
+  <component name="NewModuleRootManager" inherit-compiler-output="true">
+    <exclude-output />
+    <content url="file://$MODULE_DIR$">
+      <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
+      <sourceFolder url="file://$MODULE_DIR$/test" isTestSource="true" />
+    </content>
+    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="sourceFolder" forTests="false" />
+    <orderEntry type="module" module-name="module2" />
+    <orderEntry type="library" name="KotlinRuntime" level="project" />
+  </component>
+</module>
+
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/src/a.kt b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/src/a.kt
new file mode 100644
index 00000000000..4da8772ebba
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/src/a.kt
@@ -0,0 +1,9 @@
+package test
+
+fun a() {
+
+}
+
+internal fun funA() {}
+
+val a = ""
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/test/test_a_1.kt b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/test/test_a_1.kt
new file mode 100644
index 00000000000..e3526b4ac21
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/test/test_a_1.kt
@@ -0,0 +1,3 @@
+package test
+
+internal fun testFunA() {}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/test/test_a_2.kt b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/test/test_a_2.kt
new file mode 100644
index 00000000000..028f7dbaa66
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module1/test/test_a_2.kt
@@ -0,0 +1,6 @@
+package test
+
+fun foo() {
+    funA()
+    testFunA()
+}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/module2.iml b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/module2.iml
new file mode 100644
index 00000000000..a2e977d345b
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/module2.iml
@@ -0,0 +1,15 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<module type="JAVA_MODULE" version="4">
+  <component name="NewModuleRootManager" inherit-compiler-output="true">
+    <exclude-output />
+    <content url="file://$MODULE_DIR$">
+      <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
+      <sourceFolder url="file://$MODULE_DIR$/test" isTestSource="true" />
+    </content>
+    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="sourceFolder" forTests="false" />
+    <orderEntry type="module" module-name="module1" />
+    <orderEntry type="library" name="KotlinRuntime" level="project" />
+  </component>
+</module>
+
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/src/b.kt b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/src/b.kt
new file mode 100644
index 00000000000..395d5075411
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/src/b.kt
@@ -0,0 +1,9 @@
+package test
+
+fun b() {
+
+}
+
+internal fun funB() {}
+
+var b = b()
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/test/test_b_1.kt b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/test/test_b_1.kt
new file mode 100644
index 00000000000..d6360452cef
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/test/test_b_1.kt
@@ -0,0 +1,3 @@
+package test
+
+internal fun testFunB() {}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/test/test_b_2.kt b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/test/test_b_2.kt
new file mode 100644
index 00000000000..b2dc2d25119
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesSamePackageWithTests/module2/test/test_b_2.kt
@@ -0,0 +1,6 @@
+package test
+
+fun bar() {
+    funB()
+    testFunB()
+}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/errors.txt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/errors.txt
new file mode 100644
index 00000000000..f6a8fb3be27
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/errors.txt
@@ -0,0 +1,4 @@
+Cannot access 'funA': it is 'internal' in 'test' at line 4, column 5
+Cannot access 'funB': it is 'internal' in 'test' at line 4, column 5
+Cannot access 'testFunA': it is 'internal' in 'test' at line 5, column 5
+Cannot access 'testFunB': it is 'internal' in 'test' at line 5, column 5
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/kotlinProject.ipr b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/kotlinProject.ipr
new file mode 100644
index 00000000000..c1a403dd047
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/kotlinProject.ipr
@@ -0,0 +1,32 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="CompilerConfiguration">
+    <option name="DEFAULT_COMPILER" value="Javac" />
+    <resourceExtensions />
+    <annotationProcessing>
+      <profile default="true" name="Default" enabled="false">
+        <processorPath useClasspath="true" />
+      </profile>
+    </annotationProcessing>
+  </component>
+  <component name="CopyrightManager" default="">
+    <module2copyright />
+  </component>
+  <component name="DependencyValidationManager">
+    <option name="SKIP_IMPORT_STATEMENTS" value="false" />
+  </component>
+  <component name="Encoding" useUTFGuessing="true" native2AsciiForPropertiesFiles="false" />
+  <component name="ProjectModuleManager">
+    <modules>
+      <module fileurl="file://$PROJECT_DIR$/module1/module1.iml" filepath="$PROJECT_DIR$/module1/module1.iml" />
+      <module fileurl="file://$PROJECT_DIR$/module2/module2.iml" filepath="$PROJECT_DIR$/module2/module2.iml" />
+    </modules>
+  </component>
+  <component name="ProjectRootManager" version="2" languageLevel="JDK_1_6" assert-keyword="true" jdk-15="true" project-jdk-name="IDEA_JDK" project-jdk-type="JavaSDK">
+    <output url="file://$PROJECT_DIR$/out" />
+  </component>
+  <component name="VcsDirectoryMappings">
+    <mapping directory="" vcs="" />
+  </component>
+</project>
+
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/module1.iml b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/module1.iml
new file mode 100644
index 00000000000..a28a2f8285e
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/module1.iml
@@ -0,0 +1,15 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<module type="JAVA_MODULE" version="4">
+  <component name="NewModuleRootManager" inherit-compiler-output="true">
+    <exclude-output />
+    <content url="file://$MODULE_DIR$">
+      <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
+      <sourceFolder url="file://$MODULE_DIR$/test" isTestSource="true" />
+    </content>
+    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="sourceFolder" forTests="false" />
+    <orderEntry type="module" module-name="module2" />
+    <orderEntry type="library" name="KotlinRuntime" level="project" />
+  </component>
+</module>
+
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/src/a.kt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/src/a.kt
new file mode 100644
index 00000000000..4da8772ebba
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/src/a.kt
@@ -0,0 +1,9 @@
+package test
+
+fun a() {
+
+}
+
+internal fun funA() {}
+
+val a = ""
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/test/test_a_1.kt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/test/test_a_1.kt
new file mode 100644
index 00000000000..e3526b4ac21
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/test/test_a_1.kt
@@ -0,0 +1,3 @@
+package test
+
+internal fun testFunA() {}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/test/test_a_2.kt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/test/test_a_2.kt
new file mode 100644
index 00000000000..fb8416d39d3
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module1/test/test_a_2.kt
@@ -0,0 +1,6 @@
+package test
+
+fun foo() {
+    funB()
+    testFunB()
+}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/module2.iml b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/module2.iml
new file mode 100644
index 00000000000..a2e977d345b
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/module2.iml
@@ -0,0 +1,15 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<module type="JAVA_MODULE" version="4">
+  <component name="NewModuleRootManager" inherit-compiler-output="true">
+    <exclude-output />
+    <content url="file://$MODULE_DIR$">
+      <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
+      <sourceFolder url="file://$MODULE_DIR$/test" isTestSource="true" />
+    </content>
+    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="sourceFolder" forTests="false" />
+    <orderEntry type="module" module-name="module1" />
+    <orderEntry type="library" name="KotlinRuntime" level="project" />
+  </component>
+</module>
+
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/src/b.kt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/src/b.kt
new file mode 100644
index 00000000000..395d5075411
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/src/b.kt
@@ -0,0 +1,9 @@
+package test
+
+fun b() {
+
+}
+
+internal fun funB() {}
+
+var b = b()
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/test/test_b_1.kt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/test/test_b_1.kt
new file mode 100644
index 00000000000..d6360452cef
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/test/test_b_1.kt
@@ -0,0 +1,3 @@
+package test
+
+internal fun testFunB() {}
\ No newline at end of file
diff --git a/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/test/test_b_2.kt b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/test/test_b_2.kt
new file mode 100644
index 00000000000..e9ce5c96421
--- /dev/null
+++ b/jps/jps-plugin/testData/general/CircularDependenciesWrongInternalFromTests/module2/test/test_b_2.kt
@@ -0,0 +1,6 @@
+package test
+
+fun bar() {
+    funA()
+    testFunA()
+}
\ No newline at end of file