diff --git a/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/compiler/KotlinToJVMBytecodeCompiler.kt b/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/compiler/KotlinToJVMBytecodeCompiler.kt
index 768602e29dc..26ac641283b 100644
--- a/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/compiler/KotlinToJVMBytecodeCompiler.kt
+++ b/compiler/cli/src/org/jetbrains/kotlin/cli/jvm/compiler/KotlinToJVMBytecodeCompiler.kt
@@ -19,6 +19,7 @@ package org.jetbrains.kotlin.cli.jvm.compiler
 import com.intellij.openapi.application.ApplicationManager
 import com.intellij.openapi.project.Project
 import com.intellij.openapi.vfs.StandardFileSystems
+import com.intellij.openapi.vfs.VfsUtilCore
 import com.intellij.openapi.vfs.VirtualFile
 import com.intellij.openapi.vfs.VirtualFileManager
 import com.intellij.psi.PsiJavaModule
@@ -130,8 +131,17 @@ object KotlinToJVMBytecodeCompiler {
 
         for (module in chunk) {
             ProgressIndicatorAndCompilationCanceledStatus.checkCanceled()
-            val moduleSourceFiles = getAbsolutePaths(buildFile, module.getSourceFiles()).map(localFileSystem::findFileByPath)
-            val ktFiles = environment.getSourceFiles().filter { file -> file.virtualFile in moduleSourceFiles }
+            val (moduleSourceDirs, moduleSourceFiles) =
+                    getAbsolutePaths(buildFile, module.getSourceFiles())
+                        .mapNotNull(localFileSystem::findFileByPath)
+                        .partition(VirtualFile::isDirectory)
+
+            val ktFiles = environment.getSourceFiles().filter { file ->
+                val virtualFile = file.virtualFile
+                virtualFile in moduleSourceFiles || moduleSourceDirs.any { dir ->
+                    VfsUtilCore.isAncestor(dir, virtualFile, true)
+                }
+            }
 
             if (!checkKotlinPackageUsage(environment, ktFiles)) return false
 
diff --git a/compiler/testData/integration/smoke/buildFile/build.xml b/compiler/testData/integration/smoke/buildFile/build.xml
new file mode 100644
index 00000000000..97ad239ea1a
--- /dev/null
+++ b/compiler/testData/integration/smoke/buildFile/build.xml
@@ -0,0 +1,5 @@
+<modules>
+  <module name="main" outputDir="$TEMP_DIR$" type="java-production">
+    <sources path="$TESTDATA_DIR$/src"/>
+  </module>
+</modules>
diff --git a/compiler/testData/integration/smoke/buildFile/buildFile.compile.expected b/compiler/testData/integration/smoke/buildFile/buildFile.compile.expected
new file mode 100644
index 00000000000..a14ac74940f
--- /dev/null
+++ b/compiler/testData/integration/smoke/buildFile/buildFile.compile.expected
@@ -0,0 +1 @@
+Return code: 0
diff --git a/compiler/testData/integration/smoke/buildFile/buildFile.run.expected b/compiler/testData/integration/smoke/buildFile/buildFile.run.expected
new file mode 100644
index 00000000000..4000785a4d1
--- /dev/null
+++ b/compiler/testData/integration/smoke/buildFile/buildFile.run.expected
@@ -0,0 +1,4 @@
+OUT:
+OK
+
+Return code: 0
diff --git a/compiler/testData/integration/smoke/buildFile/src/main.kt b/compiler/testData/integration/smoke/buildFile/src/main.kt
new file mode 100644
index 00000000000..bde1f8dc2b0
--- /dev/null
+++ b/compiler/testData/integration/smoke/buildFile/src/main.kt
@@ -0,0 +1,3 @@
+fun main() {
+    System.out.println("OK")
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTest.java b/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTest.java
index 7dc9cad47cc..cec47c1a2d4 100644
--- a/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTest.java
+++ b/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTest.java
@@ -16,6 +16,8 @@
 
 package org.jetbrains.kotlin.integration;
 
+import org.jetbrains.kotlin.cli.AbstractCliTest;
+
 import java.io.File;
 
 public class CompilerSmokeTest extends CompilerSmokeTestBase {
@@ -120,4 +122,13 @@ public class CompilerSmokeTest extends CompilerSmokeTestBase {
     public void testPrintVersion() throws Exception {
         runCompiler("test.compile", "-version");
     }
+
+    public void testBuildFile() throws Exception {
+        File buildXml = new File(getTestDataDir(), "build.xml");
+        runCompiler(
+                "buildFile.compile",
+                AbstractCliTest.replacePathsInBuildXml("-Xbuild-file=" + buildXml, getTestDataDir(), tmpdir.getPath())
+        );
+        run("buildFile.run", "-cp", tmpdir.getAbsolutePath(), "MainKt");
+    }
 }
diff --git a/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTestBase.java b/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTestBase.java
index 23a59ced916..1d0ce394385 100644
--- a/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTestBase.java
+++ b/compiler/tests/org/jetbrains/kotlin/integration/CompilerSmokeTestBase.java
@@ -17,6 +17,7 @@
 package org.jetbrains.kotlin.integration;
 
 import com.intellij.util.ArrayUtil;
+import org.jetbrains.annotations.NotNull;
 import org.jetbrains.kotlin.test.KotlinTestUtils;
 import org.jetbrains.kotlin.utils.StringsKt;
 
@@ -27,8 +28,13 @@ import java.util.Collection;
 import java.util.Collections;
 
 public abstract class CompilerSmokeTestBase extends KotlinIntegrationTestBase {
+    @NotNull
+    protected String getTestDataDir() {
+        return KotlinTestUtils.getTestDataPathBase() + "/integration/smoke/" + getTestName(true);
+    }
+
     protected int run(String logName, String... args) throws Exception {
-        return runJava(KotlinTestUtils.getTestDataPathBase() + "/integration/smoke/" + getTestName(true), logName, args);
+        return runJava(getTestDataDir(), logName, args);
     }
 
     protected int runCompiler(String logName, String... arguments) throws Exception {