diff --git a/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilder.kt b/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilder.kt
index 1da4e83c697..44f30bef277 100644
--- a/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilder.kt
+++ b/jps-plugin/src/org/jetbrains/kotlin/jps/build/KotlinBuilder.kt
@@ -54,9 +54,12 @@ import org.jetbrains.jps.builders.java.JavaBuilderUtil
 import com.intellij.util.containers.MultiMap
 import org.jetbrains.kotlin.cli.common.arguments.CommonCompilerArguments
 import org.jetbrains.jps.model.JpsProject
+import java.io.FileFilter
+import org.jetbrains.kotlin.jps.incremental.IncrementalCacheImpl.RecompilationDecision.*
 import org.jetbrains.kotlin.compilerRunner.SimpleOutputItem
 import org.jetbrains.kotlin.utils.LibraryUtils
 import org.jetbrains.kotlin.load.kotlin.incremental.cache.IncrementalCache
+import org.jetbrains.jps.incremental.fs.CompilationRound
 
 public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR) {
     class object {
@@ -133,7 +136,7 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
 
         val recompilationDecision: IncrementalCacheImpl.RecompilationDecision
         if (JpsUtils.isJsKotlinModule(chunk.representativeTarget())) {
-            recompilationDecision = IncrementalCacheImpl.RecompilationDecision.DO_NOTHING
+            recompilationDecision = DO_NOTHING
         }
         else {
             recompilationDecision = updateKotlinIncrementalCache(compilationErrors, dirtyFilesHolder, incrementalCaches, outputsItemsAndTargets)
@@ -149,15 +152,21 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
         }
 
         if (IncrementalCompilation.ENABLED) {
-            if (recompilationDecision == IncrementalCacheImpl.RecompilationDecision.RECOMPILE_ALL) {
-                allCompiledFiles.clear()
-                val targetsCompletelyMarkedDirty = FSOperations.getTargetsCompletelyMarkedDirty(context)
-                FSOperations.markDirtyRecursively(context, chunk)
+            val fileFilter = FileFilter { file ->
+                KotlinSourceFileCollector.isKotlinSourceFile(file) && file !in allCompiledFiles
             }
-            if (recompilationDecision == IncrementalCacheImpl.RecompilationDecision.COMPILE_OTHERS) {
-                FSOperations.markDirtyRecursively(context, chunk, { file ->
-                    KotlinSourceFileCollector.isKotlinSourceFile(file) && file !in allCompiledFiles
-                })
+
+            when (recompilationDecision) {
+                RECOMPILE_ALL_CHUNK_AND_DEPENDANTS -> {
+                    allCompiledFiles.clear()
+                    FSOperations.markDirtyRecursively(context, chunk)
+                }
+                RECOMPILE_OTHERS_WITH_DEPENDANTS -> {
+                    FSOperations.markDirtyRecursively(context, CompilationRound.NEXT, chunk, fileFilter)
+                }
+                RECOMPILE_OTHERS_IN_CHUNK -> {
+                    FSOperations.markDirty(context, chunk, fileFilter)
+                }
             }
             return ADDITIONAL_PASS_REQUIRED
         }
@@ -254,7 +263,7 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
             outputsItemsAndTargets: List<Pair<SimpleOutputItem, ModuleBuildTarget>>
     ): IncrementalCacheImpl.RecompilationDecision {
         if (!IncrementalCompilation.ENABLED) {
-            return IncrementalCacheImpl.RecompilationDecision.DO_NOTHING
+            return DO_NOTHING
         }
 
         for ((target, cache) in incrementalCaches) {
@@ -265,7 +274,7 @@ public class KotlinBuilder : ModuleLevelBuilder(BuilderCategory.SOURCE_PROCESSOR
             )
         }
 
-        var recompilationDecision = IncrementalCacheImpl.RecompilationDecision.DO_NOTHING
+        var recompilationDecision = DO_NOTHING
         for ((outputItem, target) in outputsItemsAndTargets) {
             val newDecision = incrementalCaches[target]!!.saveFileToCache(outputItem.getSourceFiles(), outputItem.getOutputFile())
             recompilationDecision = recompilationDecision.merge(newDecision)
diff --git a/jps-plugin/src/org/jetbrains/kotlin/jps/incremental/IncrementalCacheImpl.kt b/jps-plugin/src/org/jetbrains/kotlin/jps/incremental/IncrementalCacheImpl.kt
index 1e1cc3401a3..9871da6f3fc 100644
--- a/jps-plugin/src/org/jetbrains/kotlin/jps/incremental/IncrementalCacheImpl.kt
+++ b/jps-plugin/src/org/jetbrains/kotlin/jps/incremental/IncrementalCacheImpl.kt
@@ -113,26 +113,38 @@ public class IncrementalCacheImpl(targetDataRoot: File): StorageOwner, Increment
             val data = BitEncoding.decodeBytes(annotationDataEncoded)
             when {
                 header.isCompatiblePackageFacadeKind() -> {
-                    return if (protoMap.put(className, data)) COMPILE_OTHERS else DO_NOTHING
+                    return if (protoMap.put(className, data)) RECOMPILE_OTHERS_IN_CHUNK else DO_NOTHING
                 }
                 header.isCompatibleClassKind() -> {
                     val inlinesChanged = inlineFunctionsMap.process(className, fileBytes)
                     val protoChanged = protoMap.put(className, data)
                     val constantsChanged = constantsMap.process(className, fileBytes)
 
-                    return if (inlinesChanged) RECOMPILE_ALL else if (protoChanged || constantsChanged) COMPILE_OTHERS else DO_NOTHING
+                    return when {
+                        inlinesChanged -> RECOMPILE_ALL_CHUNK_AND_DEPENDANTS
+                        constantsChanged -> RECOMPILE_OTHERS_WITH_DEPENDANTS
+                        protoChanged -> RECOMPILE_OTHERS_IN_CHUNK
+                        else -> DO_NOTHING
+                    }
                 }
                 else -> {
                     throw IllegalStateException("Unexpected kind with annotationData: ${header.kind}, isCompatible: ${header.isCompatibleAbiVersion}")
                 }
             }
         }
+
         if (header.syntheticClassKind == JvmAnnotationNames.KotlinSyntheticClass.Kind.PACKAGE_PART) {
             assert(sourceFiles.size == 1) { "Package part from several source files: $sourceFiles" }
+
             packagePartMap.putPackagePartSourceData(sourceFiles.first(), className)
             val inlinesChanged = inlineFunctionsMap.process(className, fileBytes)
             val constantsChanged = constantsMap.process(className, fileBytes)
-            return if (inlinesChanged) RECOMPILE_ALL else if (constantsChanged) COMPILE_OTHERS else DO_NOTHING
+
+            return when {
+                inlinesChanged -> RECOMPILE_ALL_CHUNK_AND_DEPENDANTS
+                constantsChanged -> RECOMPILE_OTHERS_WITH_DEPENDANTS
+                else -> DO_NOTHING
+            }
         }
 
         return DO_NOTHING
@@ -497,8 +509,9 @@ public class IncrementalCacheImpl(targetDataRoot: File): StorageOwner, Increment
 
     enum class RecompilationDecision {
         DO_NOTHING
-        COMPILE_OTHERS
-        RECOMPILE_ALL
+        RECOMPILE_OTHERS_IN_CHUNK
+        RECOMPILE_OTHERS_WITH_DEPENDANTS
+        RECOMPILE_ALL_CHUNK_AND_DEPENDANTS
 
         fun merge(other: RecompilationDecision): RecompilationDecision {
             return if (other.ordinal() > this.ordinal()) other else this
diff --git a/jps-plugin/testData/incremental/multiModule/simpleDependency/module2_c.kt b/jps-plugin/testData/incremental/multiModule/simpleDependency/module2_c.kt
new file mode 100644
index 00000000000..c4fab8fb00b
--- /dev/null
+++ b/jps-plugin/testData/incremental/multiModule/simpleDependency/module2_c.kt
@@ -0,0 +1,5 @@
+package c
+
+fun c() {
+    // This file doesn't use anything from module1, so it won't be recompiled after change
+}
\ No newline at end of file