diff --git a/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/K2NativeCompilerArguments.kt b/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/K2NativeCompilerArguments.kt
index 80e9a8a99fc..3213961a2d5 100644
--- a/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/K2NativeCompilerArguments.kt
+++ b/compiler/cli/cli-common/src/org/jetbrains/kotlin/cli/common/arguments/K2NativeCompilerArguments.kt
@@ -167,6 +167,14 @@ class K2NativeCompilerArguments : CommonCompilerArguments() {
     )
     var autoCacheDir: String? = null
 
+    @Argument(
+        value = INCREMENTAL_CACHE_DIR,
+        valueDescription = "<path>",
+        description = "Path to the directory where to put incremental build caches",
+        delimiter = ""
+    )
+    var incrementalCacheDir: String? = null
+
     @Argument(value="-Xcheck-dependencies", deprecatedName = "--check_dependencies", description = "Check dependencies and download the missing ones")
     var checkDependencies: Boolean = false
 
@@ -485,6 +493,7 @@ class K2NativeCompilerArguments : CommonCompilerArguments() {
         const val INCLUDE_ARG = "-Xinclude"
         const val CACHED_LIBRARY = "-Xcached-library"
         const val ADD_CACHE = "-Xadd-cache"
+        const val INCREMENTAL_CACHE_DIR = "-Xic-cache-dir"
         const val SHORT_MODULE_NAME_ARG = "-Xshort-module-name"
     }
 }
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheBuilder.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheBuilder.kt
index ed16d31a0da..88e05828f35 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheBuilder.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheBuilder.kt
@@ -5,6 +5,8 @@
 
 package org.jetbrains.kotlin.backend.konan
 
+import org.jetbrains.kotlin.backend.common.serialization.FingerprintHash
+import org.jetbrains.kotlin.backend.common.serialization.SerializedIrFileFingerprint
 import org.jetbrains.kotlin.cli.common.messages.CompilerMessageSeverity
 import org.jetbrains.kotlin.config.CompilerConfiguration
 import org.jetbrains.kotlin.konan.file.File
@@ -13,6 +15,7 @@ import org.jetbrains.kotlin.library.KotlinLibrary
 import org.jetbrains.kotlin.library.metadata.resolver.TopologicalLibraryOrder
 import org.jetbrains.kotlin.library.uniqueName
 import org.jetbrains.kotlin.backend.konan.descriptors.isInteropLibrary
+import org.jetbrains.kotlin.config.CommonConfigurationKeys
 import org.jetbrains.kotlin.library.unresolvedDependencies
 
 internal fun KotlinLibrary.getAllTransitiveDependencies(allLibraries: Map<String, KotlinLibrary>): List<KotlinLibrary> {
@@ -32,85 +35,256 @@ internal fun KotlinLibrary.getAllTransitiveDependencies(allLibraries: Map<String
     return allDependencies.toList()
 }
 
+// TODO: deleteRecursively might throw an exception!
 class CacheBuilder(
         val konanConfig: KonanConfig,
         val spawnCompilation: (List<String>, CompilerConfiguration.() -> Unit) -> Unit
 ) {
     private val configuration = konanConfig.configuration
     private val autoCacheableFrom = configuration.get(KonanConfigKeys.AUTO_CACHEABLE_FROM)!!.map { File(it) }
+    private val icEnabled = configuration.get(CommonConfigurationKeys.INCREMENTAL_COMPILATION)!!
+    private val includedLibraries = configuration.get(KonanConfigKeys.INCLUDED_LIBRARIES).orEmpty().toSet()
+    private val generateTestRunner = configuration.getNotNull(KonanConfigKeys.GENERATE_TEST_RUNNER)
 
-    fun needToBuild() = konanConfig.isFinalBinary && konanConfig.ignoreCacheReason == null && autoCacheableFrom.isNotEmpty()
+    fun needToBuild() = konanConfig.isFinalBinary && konanConfig.ignoreCacheReason == null && (autoCacheableFrom.isNotEmpty() || icEnabled)
+
+    private val allLibraries by lazy { konanConfig.resolvedLibraries.getFullList(TopologicalLibraryOrder) }
+    private val uniqueNameToLibrary by lazy { allLibraries.associateBy { it.uniqueName } }
+
+    private val caches = mutableMapOf<KotlinLibrary, CachedLibraries.Cache>()
+    private val cacheRootDirectories = mutableMapOf<KotlinLibrary, String>()
+
+    // If libA depends on libB, then dependableLibraries[libB] contains libA.
+    private val dependableLibraries = mutableMapOf<KotlinLibrary, MutableList<KotlinLibrary>>()
+
+    private fun findAllDependable(libraries: List<KotlinLibrary>): Set<KotlinLibrary> {
+        val visited = mutableSetOf<KotlinLibrary>()
+
+        fun dfs(library: KotlinLibrary) {
+            visited.add(library)
+            dependableLibraries[library]?.forEach {
+                if (it !in visited) dfs(it)
+            }
+        }
+
+        libraries.forEach { if (it !in visited) dfs(it) }
+        return visited
+    }
+
+    private data class LibraryFile(val library: KotlinLibrary, val file: String) {
+        override fun toString() = "${library.uniqueName}|$file"
+    }
+
+    private val KotlinLibrary.isExternal
+        get() = autoCacheableFrom.any { libraryFile.absolutePath.startsWith(it.absolutePath) }
 
     fun build() {
-        val allLibraries = konanConfig.resolvedLibraries.getFullList(TopologicalLibraryOrder)
-        val uniqueNameToLibrary = allLibraries.associateBy { it.uniqueName }
-        val caches = mutableMapOf<KotlinLibrary, String>()
+        val externalLibrariesToCache = mutableListOf<KotlinLibrary>()
+        val icedLibraries = mutableListOf<KotlinLibrary>()
 
-        allLibraries.forEach librariesLoop@{ library ->
-            konanConfig.cachedLibraries.getLibraryCache(library)?.let {
-                caches[library] = it.rootDirectory
-                return@librariesLoop
+        allLibraries.forEach { library ->
+            val isDefaultOrExternal = library.isDefault || library.isExternal
+            val cache = konanConfig.cachedLibraries.getLibraryCache(library, !isDefaultOrExternal)
+            cache?.let {
+                caches[library] = it
+                cacheRootDirectories[library] = it.rootDirectory
             }
-            val libraryPath = library.libraryFile.absolutePath
-            val isLibraryAutoCacheable = library.isDefault || autoCacheableFrom.any { libraryPath.startsWith(it.absolutePath) }
-            if (!isLibraryAutoCacheable)
-                return@librariesLoop
+            if (isDefaultOrExternal) {
+                if (cache == null) externalLibrariesToCache += library
+            } else {
+                icedLibraries += library
+            }
+            library.unresolvedDependencies.forEach {
+                val dependency = uniqueNameToLibrary[it.path]!!
+                dependableLibraries.getOrPut(dependency) { mutableListOf() }.add(library)
+            }
+        }
 
-            val dependencies = library.getAllTransitiveDependencies(uniqueNameToLibrary)
-            val dependencyCaches = dependencies.map {
-                caches[it] ?: run {
-                    configuration.report(CompilerMessageSeverity.LOGGING,
-                            "SKIPPING ${library.libraryName} as some of the dependencies aren't cached")
-                    return@librariesLoop
-                }
+        externalLibrariesToCache.forEach { buildLibraryCache(it, true, emptyList()) }
+
+        if (!icEnabled) return
+
+        // Every library dependable on one of the changed external libraries needs its cache to be fully rebuilt.
+        val needFullRebuild = findAllDependable(externalLibrariesToCache)
+
+        val libraryFilesWithFqNames = mutableMapOf<KotlinLibrary, List<FileWithFqName>>()
+
+        val changedFiles = mutableListOf<LibraryFile>()
+        val removedFiles = mutableListOf<LibraryFile>()
+        val addedFiles = mutableListOf<LibraryFile>()
+        val reversedPerFileDependencies = mutableMapOf<LibraryFile, MutableList<LibraryFile>>()
+        val reversedWholeLibraryDependencies = mutableMapOf<KotlinLibrary, MutableList<LibraryFile>>()
+        for (library in icedLibraries) {
+            if (library in needFullRebuild) continue
+            val cache = caches[library] ?: continue
+            if (cache !is CachedLibraries.Cache.PerFile) {
+                require(library.isInteropLibrary())
+                continue
             }
 
-            // TODO: Uncomment after making per-file caches default.
-            val makePerFileCache = false//!library.isInteropLibrary()
-            configuration.report(CompilerMessageSeverity.LOGGING, "CACHING ${library.libraryName}")
-            val libraryCacheDirectory = if (library.isDefault)
-                konanConfig.systemCacheDirectory
-            else
-                CachedLibraries.computeVersionedCacheDirectory(konanConfig.autoCacheDirectory, library, uniqueNameToLibrary)
-            val libraryCache = libraryCacheDirectory.child(
-                    if (makePerFileCache)
-                        CachedLibraries.getPerFileCachedLibraryName(library)
-                    else
-                        CachedLibraries.getCachedLibraryName(library)
-            )
-            try {
-                // TODO: Run monolithic cache builds in parallel.
-                libraryCacheDirectory.mkdirs()
-                spawnCompilation(konanConfig.additionalCacheFlags /* TODO: Some way to put them directly to CompilerConfiguration? */) {
-                    val libraries = dependencies.filter { !it.isDefault }.map { it.libraryFile.absolutePath }
-                    val cachedLibraries = dependencies.zip(dependencyCaches).associate { it.first.libraryFile.absolutePath to it.second }
-                    configuration.report(CompilerMessageSeverity.LOGGING, "    dependencies:\n        " +
-                            libraries.joinToString("\n        "))
-                    configuration.report(CompilerMessageSeverity.LOGGING, "    caches used:\n        " +
-                            cachedLibraries.entries.joinToString("\n        ") { "${it.key}: ${it.value}" })
-                    configuration.report(CompilerMessageSeverity.LOGGING, "    cache dir: " +
-                            libraryCacheDirectory.absolutePath)
+            val libraryCacheRootDir = File(cache.path)
+            val cachedFiles = libraryCacheRootDir.listFiles.map { it.name }
 
-                    setupCommonOptionsForCaches(konanConfig)
-                    put(KonanConfigKeys.PRODUCE, CompilerOutputKind.STATIC_CACHE)
-                    put(KonanConfigKeys.LIBRARY_TO_ADD_TO_CACHE, libraryPath)
-                    put(KonanConfigKeys.NODEFAULTLIBS, true)
-                    put(KonanConfigKeys.NOENDORSEDLIBS, true)
-                    put(KonanConfigKeys.NOSTDLIB, true)
-                    put(KonanConfigKeys.LIBRARY_FILES, libraries)
-                    put(KonanConfigKeys.CACHED_LIBRARIES, cachedLibraries)
-                    put(KonanConfigKeys.CACHE_DIRECTORIES, listOf(libraryCacheDirectory.absolutePath))
-                    put(KonanConfigKeys.MAKE_PER_FILE_CACHE, makePerFileCache)
+            val actualFilesWithFqNames = library.getFilesWithFqNames()
+            libraryFilesWithFqNames[library] = actualFilesWithFqNames
+            val actualFiles = actualFilesWithFqNames.withIndex()
+                    .associate { CacheSupport.cacheFileId(it.value.fqName, it.value.filePath) to it.index }
+                    .toMutableMap()
+
+            for (cachedFile in cachedFiles) {
+                val libraryFile = LibraryFile(library, cachedFile)
+                val fileIndex = actualFiles[cachedFile]
+                if (fileIndex == null) {
+                    removedFiles.add(libraryFile)
+                } else {
+                    actualFiles.remove(cachedFile)
+                    val actualContentHash = SerializedIrFileFingerprint(library, fileIndex).fileFingerprint
+                    val previousContentHash = FingerprintHash.fromByteArray(cache.getFileHash(cachedFile))
+                    if (previousContentHash != actualContentHash)
+                        changedFiles.add(libraryFile)
+
+                    val dependencies = cache.getFileDependencies(cachedFile)
+                    for (dependency in dependencies) {
+                        val dependentLibrary = uniqueNameToLibrary[dependency.libName]
+                                ?: error("Unknown dependent library ${dependency.libName}")
+                        when (val kind = dependency.kind) {
+                            is DependenciesTracker.DependencyKind.WholeModule ->
+                                reversedWholeLibraryDependencies.getOrPut(dependentLibrary) { mutableListOf() }.add(libraryFile)
+                            is DependenciesTracker.DependencyKind.CertainFiles ->
+                                kind.files.forEach {
+                                    reversedPerFileDependencies.getOrPut(LibraryFile(dependentLibrary, it)) { mutableListOf() }.add(libraryFile)
+                                }
+                        }
+                    }
                 }
-                caches[library] = libraryCache.absolutePath
-            } catch (t: Throwable) {
-                configuration.report(CompilerMessageSeverity.LOGGING, "${t.message}\n${t.stackTraceToString()}")
-                configuration.report(CompilerMessageSeverity.WARNING,
-                        "Failed to build cache: ${t.message}\n${t.stackTraceToString()}\n" +
-                                "Falling back to not use cache for ${library.libraryName}")
+            }
+            for (newFile in actualFiles.keys)
+                addedFiles.add(LibraryFile(library, newFile))
+        }
 
-                libraryCache.deleteRecursively()
+        configuration.report(CompilerMessageSeverity.LOGGING, "IC analysis results")
+        configuration.report(CompilerMessageSeverity.LOGGING, "    CACHED:")
+        icedLibraries.filter { caches[it] != null }.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "        ${it.libraryName}") }
+        configuration.report(CompilerMessageSeverity.LOGGING, "    CLEAN BUILD:")
+        icedLibraries.filter { caches[it] == null }.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "        ${it.libraryName}") }
+        configuration.report(CompilerMessageSeverity.LOGGING, "    FULL REBUILD:")
+        icedLibraries.filter { it in needFullRebuild }.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "        ${it.libraryName}") }
+        configuration.report(CompilerMessageSeverity.LOGGING, "    ADDED FILES:")
+        addedFiles.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "        $it") }
+        configuration.report(CompilerMessageSeverity.LOGGING, "    REMOVED FILES:")
+        removedFiles.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "        $it") }
+        configuration.report(CompilerMessageSeverity.LOGGING, "    CHANGED FILES:")
+        changedFiles.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "        $it") }
+
+        val dirtyFiles = mutableSetOf<LibraryFile>()
+
+        fun dfs(libraryFile: LibraryFile) {
+            dirtyFiles += libraryFile
+            reversedPerFileDependencies[libraryFile]?.forEach {
+                if (it !in dirtyFiles) dfs(it)
+            }
+        }
+
+        removedFiles.forEach {
+            if (it !in dirtyFiles) dfs(it)
+        }
+        changedFiles.forEach {
+            if (it !in dirtyFiles) dfs(it)
+        }
+        dirtyFiles.addAll(addedFiles)
+
+        removedFiles.forEach {
+            dirtyFiles.remove(it)
+            File(caches[it.library]!!.rootDirectory).child(it.file).deleteRecursively()
+        }
+
+        val groupedDirtyFiles = dirtyFiles.groupBy { it.library }
+        configuration.report(CompilerMessageSeverity.LOGGING, "    DIRTY FILES:")
+        groupedDirtyFiles.values.flatten().forEach {
+            configuration.report(CompilerMessageSeverity.LOGGING, "        $it")
+        }
+
+        for (library in icedLibraries) {
+            val filesToCache = groupedDirtyFiles[library]?.let { libraryFiles ->
+                val filesWithFqNames = libraryFilesWithFqNames[library]!!.associateBy {
+                    CacheSupport.cacheFileId(it.fqName, it.filePath)
+                }
+                libraryFiles.map { filesWithFqNames[it.file]!!.filePath }
+            }.orEmpty()
+
+            when {
+                library in needFullRebuild -> buildLibraryCache(library, false, emptyList())
+                caches[library] == null || filesToCache.isNotEmpty() -> buildLibraryCache(library, false, filesToCache)
             }
         }
     }
+
+    private fun buildLibraryCache(library: KotlinLibrary, isExternal: Boolean, filesToCache: List<String>) {
+        val dependencies = library.getAllTransitiveDependencies(uniqueNameToLibrary)
+        val dependencyCaches = dependencies.map {
+            cacheRootDirectories[it] ?: run {
+                configuration.report(CompilerMessageSeverity.LOGGING,
+                        "SKIPPING ${library.libraryName} as some of the dependencies aren't cached")
+                return
+            }
+        }
+
+        configuration.report(CompilerMessageSeverity.LOGGING, "CACHING ${library.libraryName}")
+        filesToCache.forEach { configuration.report(CompilerMessageSeverity.LOGGING, "    $it") }
+
+        // Produce monolithic caches for external libraries for now.
+        val makePerFileCache = !isExternal && !library.isInteropLibrary()
+
+        val libraryCacheDirectory = when {
+            library.isDefault -> konanConfig.systemCacheDirectory
+            isExternal -> CachedLibraries.computeVersionedCacheDirectory(konanConfig.autoCacheDirectory, library, uniqueNameToLibrary)
+            else -> konanConfig.incrementalCacheDirectory!!
+        }
+        val libraryCache = libraryCacheDirectory.child(
+                if (makePerFileCache)
+                    CachedLibraries.getPerFileCachedLibraryName(library)
+                else
+                    CachedLibraries.getCachedLibraryName(library)
+        )
+        try {
+            // TODO: Run monolithic cache builds in parallel.
+            libraryCacheDirectory.mkdirs()
+            spawnCompilation(konanConfig.additionalCacheFlags /* TODO: Some way to put them directly to CompilerConfiguration? */) {
+                val libraryPath = library.libraryFile.absolutePath
+                val libraries = dependencies.filter { !it.isDefault }.map { it.libraryFile.absolutePath }
+                val cachedLibraries = dependencies.zip(dependencyCaches).associate { it.first.libraryFile.absolutePath to it.second }
+                configuration.report(CompilerMessageSeverity.LOGGING, "    dependencies:\n        " +
+                        libraries.joinToString("\n        "))
+                configuration.report(CompilerMessageSeverity.LOGGING, "    caches used:\n        " +
+                        cachedLibraries.entries.joinToString("\n        ") { "${it.key}: ${it.value}" })
+                configuration.report(CompilerMessageSeverity.LOGGING, "    cache dir: " +
+                        libraryCacheDirectory.absolutePath)
+
+                setupCommonOptionsForCaches(konanConfig)
+                put(KonanConfigKeys.PRODUCE, CompilerOutputKind.STATIC_CACHE)
+                put(KonanConfigKeys.LIBRARY_TO_ADD_TO_CACHE, libraryPath)
+                put(KonanConfigKeys.NODEFAULTLIBS, true)
+                put(KonanConfigKeys.NOENDORSEDLIBS, true)
+                put(KonanConfigKeys.NOSTDLIB, true)
+                put(KonanConfigKeys.LIBRARY_FILES, libraries)
+                if (generateTestRunner != TestRunnerKind.NONE && libraryPath in includedLibraries) {
+                    put(KonanConfigKeys.GENERATE_TEST_RUNNER, generateTestRunner)
+                    put(KonanConfigKeys.INCLUDED_LIBRARIES, listOf(libraryPath))
+                }
+                put(KonanConfigKeys.CACHED_LIBRARIES, cachedLibraries)
+                put(KonanConfigKeys.CACHE_DIRECTORIES, listOf(libraryCacheDirectory.absolutePath))
+                put(KonanConfigKeys.MAKE_PER_FILE_CACHE, makePerFileCache)
+                if (filesToCache.isNotEmpty())
+                    put(KonanConfigKeys.FILES_TO_CACHE, filesToCache)
+            }
+            cacheRootDirectories[library] = libraryCache.absolutePath
+        } catch (t: Throwable) {
+            configuration.report(CompilerMessageSeverity.LOGGING, "${t.message}\n${t.stackTraceToString()}")
+            configuration.report(CompilerMessageSeverity.WARNING,
+                    "Failed to build cache: ${t.message}\n${t.stackTraceToString()}\n" +
+                            "Falling back to not use cache for ${library.libraryName}")
+
+            libraryCache.deleteRecursively()
+        }
+    }
 }
\ No newline at end of file
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheStorage.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheStorage.kt
index 750674a9ca1..7c110b44a97 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheStorage.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheStorage.kt
@@ -8,6 +8,7 @@ package org.jetbrains.kotlin.backend.konan
 import org.jetbrains.kotlin.backend.konan.serialization.ClassFieldsSerializer
 import org.jetbrains.kotlin.backend.konan.serialization.EagerInitializedPropertySerializer
 import org.jetbrains.kotlin.backend.konan.serialization.InlineFunctionBodyReferenceSerializer
+import org.jetbrains.kotlin.konan.file.File
 
 internal class CacheStorage(private val generationState: NativeGenerationState) {
     private val outputFiles = generationState.outputFiles
@@ -16,8 +17,10 @@ internal class CacheStorage(private val generationState: NativeGenerationState)
         fun renameOutput(outputFiles: OutputFiles) {
             // For caches the output file is a directory. It might be created by someone else,
             // we have to delete it in order for the next renaming operation to succeed.
-            // TODO: what if the directory is not empty?
-            java.io.File(outputFiles.mainFileName).delete()
+            val tempDirectoryForRemoval = File(outputFiles.mainFileName + "-to-remove")
+            if (outputFiles.mainFile.exists && !outputFiles.mainFile.renameTo(tempDirectoryForRemoval))
+                return
+            tempDirectoryForRemoval.deleteRecursively()
             if (!outputFiles.tempCacheDirectory!!.renameTo(outputFiles.mainFile))
                 outputFiles.tempCacheDirectory.deleteRecursively()
         }
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheSupport.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheSupport.kt
index 7f058038db5..2fa0886515a 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheSupport.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CacheSupport.kt
@@ -80,10 +80,11 @@ class PartialCacheInfo(val klib: KotlinLibrary, val strategy: CacheDeserializati
 
 class CacheSupport(
         private val configuration: CompilerConfiguration,
-        resolvedLibraries: KotlinLibraryResolveResult,
+        private val resolvedLibraries: KotlinLibraryResolveResult,
         ignoreCacheReason: String?,
         systemCacheDirectory: File,
         autoCacheDirectory: File,
+        incrementalCacheDirectory: File?,
         target: KonanTarget,
         val produce: CompilerOutputKind
 ) {
@@ -103,7 +104,9 @@ class CacheSupport(
             add(File(it).takeIf { it.isDirectory }
                     ?: configuration.reportCompilationError("cache directory $it is not found or is not a directory"))
         }
-        systemCacheDirectory.takeIf { autoCacheableFrom.isNotEmpty() }?.let { add(it) }
+        systemCacheDirectory.takeIf { autoCacheableFrom.isNotEmpty() || incrementalCacheDirectory != null }?.let { add(it) }
+        autoCacheDirectory.takeIf { autoCacheableFrom.isNotEmpty() }?.let { add(it) }
+        incrementalCacheDirectory?.let { add(it) }
     }
 
     internal fun tryGetImplicitOutput(cacheDeserializationStrategy: CacheDeserializationStrategy?): String? {
@@ -178,10 +181,11 @@ class CacheSupport(
             configuration.get(KonanConfigKeys.PRE_LINK_CACHES, false)
 
     companion object {
-        fun cacheFileId(fqName: String, filePath: String) = "${if (fqName == "") "ROOT" else fqName}.${filePath.hashCode().toString(Character.MAX_RADIX)}"
+        fun cacheFileId(fqName: String, filePath: String) =
+                "${if (fqName == "") "ROOT" else fqName}.${filePath.hashCode().toString(Character.MAX_RADIX)}"
     }
 
-    init {
+    fun checkConsistency() {
         // Ensure dependencies of every cached library are cached too:
         resolvedLibraries.getFullList { libraries ->
             libraries.map { library ->
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CachedLibraries.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CachedLibraries.kt
index 67df442efe8..0e3d0899357 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CachedLibraries.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/CachedLibraries.kt
@@ -84,11 +84,13 @@ class CachedLibraries(
             }
         }
 
-        class PerFile(target: KonanTarget, kind: Kind, path: String, private val fileDirs: List<File>)
+        class PerFile(target: KonanTarget, kind: Kind, path: String, fileDirs: List<File>, val complete: Boolean)
             : Cache(target, kind, path, File(path).absolutePath)
         {
+            private val existingFileDirs = if (complete) fileDirs else fileDirs.filter { it.exists }
+
             private val perFileBitcodeDependencies by lazy {
-                fileDirs.associate {
+                existingFileDirs.associate {
                     val data = it.child(PER_FILE_CACHE_BINARY_LEVEL_DIR_NAME).child(BITCODE_DEPENDENCIES_FILE_NAME).readStrings()
                     it.name to DependenciesSerializer.deserialize(it.absolutePath, data)
                 }
@@ -108,26 +110,26 @@ class CachedLibraries(
 
             override fun computeBitcodeDependencies() = perFileBitcodeDependencies.values.flatten()
 
-            override fun computeBinariesPaths() = fileDirs.map {
+            override fun computeBinariesPaths() = existingFileDirs.map {
                 it.child(PER_FILE_CACHE_BINARY_LEVEL_DIR_NAME).child(getArtifactName(target, it.name, kind.toCompilerOutputKind())).absolutePath
             }
 
             override fun computeSerializedInlineFunctionBodies() = mutableListOf<SerializedInlineFunctionReference>().also {
-                fileDirs.forEach { fileDir ->
+                existingFileDirs.forEach { fileDir ->
                     val data = fileDir.child(PER_FILE_CACHE_IR_LEVEL_DIR_NAME).child(INLINE_FUNCTION_BODIES_FILE_NAME).readBytes()
                     InlineFunctionBodyReferenceSerializer.deserializeTo(data, it)
                 }
             }
 
             override fun computeSerializedClassFields() = mutableListOf<SerializedClassFields>().also {
-                fileDirs.forEach { fileDir ->
+                existingFileDirs.forEach { fileDir ->
                     val data = fileDir.child(PER_FILE_CACHE_IR_LEVEL_DIR_NAME).child(CLASS_FIELDS_FILE_NAME).readBytes()
                     ClassFieldsSerializer.deserializeTo(data, it)
                 }
             }
 
             override fun computeSerializedEagerInitializedFiles() = mutableListOf<SerializedEagerInitializedFile>().also {
-                fileDirs.forEach { fileDir ->
+                existingFileDirs.forEach { fileDir ->
                     val data = fileDir.child(PER_FILE_CACHE_IR_LEVEL_DIR_NAME).child(EAGER_INITIALIZED_PROPERTIES_FILE_NAME).readBytes()
                     EagerInitializedPropertySerializer.deserializeTo(data, it)
                 }
@@ -162,8 +164,8 @@ class CachedLibraries(
                 val libraryFileDirs = librariesFileDirs.getOrPut(library) {
                     library.getFilesWithFqNames().map { cacheDir.child(CacheSupport.cacheFileId(it.fqName, it.filePath)) }
                 }
-                Cache.PerFile(target, Kind.STATIC, cacheDir.absolutePath, libraryFileDirs)
-                        .takeIf { cacheDirContents.containsAll(libraryFileDirs.map { it.absolutePath }) }
+                Cache.PerFile(target, Kind.STATIC, cacheDir.absolutePath, libraryFileDirs,
+                        complete = cacheDirContents.containsAll(libraryFileDirs.map { it.absolutePath }))
             }
         }
     }
@@ -196,8 +198,8 @@ class CachedLibraries(
     fun isLibraryCached(library: KotlinLibrary): Boolean =
             getLibraryCache(library) != null
 
-    fun getLibraryCache(library: KotlinLibrary): Cache? =
-            allCaches[library]
+    fun getLibraryCache(library: KotlinLibrary, allowIncomplete: Boolean = false): Cache? =
+            allCaches[library]?.takeIf { allowIncomplete || (it as? Cache.PerFile)?.complete != false }
 
     val hasStaticCaches = allCaches.values.any {
         when (it.kind) {
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfig.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfig.kt
index 3a572aafb36..edd29e1d919 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfig.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfig.kt
@@ -406,6 +406,8 @@ class KonanConfig(val project: Project, val configuration: CompilerConfiguration
 
     internal val additionalCacheFlags by lazy { platformManager.loader(target).additionalCacheFlags }
 
+    internal val threadsCount = configuration.get(CommonConfigurationKeys.PARALLEL_BACKEND_THREADS) ?: 1
+
     private fun StringBuilder.appendCommonCacheFlavor() {
         append(target.toString())
         if (debug) append("-g")
@@ -440,9 +442,19 @@ class KonanConfig(val project: Project, val configuration: CompilerConfiguration
     }
 
     private val systemCacheRootDirectory = File(distribution.konanHome).child("klib").child("cache")
-    internal val systemCacheDirectory = systemCacheRootDirectory.child(systemCacheFlavorString)
-    private val autoCacheRootDirectory = configuration.get(KonanConfigKeys.AUTO_CACHE_DIR)?.let { File(it) } ?: systemCacheRootDirectory
-    internal val autoCacheDirectory = autoCacheRootDirectory.child(userCacheFlavorString)
+    internal val systemCacheDirectory = systemCacheRootDirectory.child(systemCacheFlavorString).also { it.mkdirs() }
+    private val autoCacheRootDirectory = configuration.get(KonanConfigKeys.AUTO_CACHE_DIR)?.let {
+        File(it).apply {
+            if (!isDirectory) configuration.reportCompilationError("auto cache directory $this is not found or is not a directory")
+        }
+    } ?: systemCacheRootDirectory
+    internal val autoCacheDirectory = autoCacheRootDirectory.child(userCacheFlavorString).also { it.mkdirs() }
+    private val incrementalCacheRootDirectory = configuration.get(KonanConfigKeys.INCREMENTAL_CACHE_DIR)?.let {
+        File(it).apply {
+            if (!isDirectory) configuration.reportCompilationError("incremental cache directory $this is not found or is not a directory")
+        }
+    }
+    internal val incrementalCacheDirectory = incrementalCacheRootDirectory?.child(userCacheFlavorString)?.also { it.mkdirs() }
 
     internal val ignoreCacheReason = when {
         optimizationsEnabled -> "for optimized compilation"
@@ -457,6 +469,7 @@ class KonanConfig(val project: Project, val configuration: CompilerConfiguration
             ignoreCacheReason = ignoreCacheReason,
             systemCacheDirectory = systemCacheDirectory,
             autoCacheDirectory = autoCacheDirectory,
+            incrementalCacheDirectory = incrementalCacheDirectory,
             target = target,
             produce = produce
     )
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfigurationKeys.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfigurationKeys.kt
index eccbfed3b6c..621361ab735 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfigurationKeys.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanConfigurationKeys.kt
@@ -39,6 +39,8 @@ class KonanConfigKeys {
                 = CompilerConfigurationKey.create<List<String>>("paths to the root directories from which dependencies are to be cached automatically")
         val AUTO_CACHE_DIR: CompilerConfigurationKey<String>
                 = CompilerConfigurationKey.create<String>("path to the directory where to put caches for auto-cacheable dependencies")
+        val INCREMENTAL_CACHE_DIR: CompilerConfigurationKey<String>
+                = CompilerConfigurationKey.create<String>("path to the directory where to put incremental build caches")
         val CACHED_LIBRARIES: CompilerConfigurationKey<Map<String, String>>
                 = CompilerConfigurationKey.create<Map<String, String>>("mapping from library paths to cache paths")
         val FILES_TO_CACHE: CompilerConfigurationKey<List<String>>
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanDriver.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanDriver.kt
index 8c807e474a0..72d134205b6 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanDriver.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/KonanDriver.kt
@@ -40,14 +40,17 @@ class KonanDriver(
 ) {
     fun run() {
         val fileNames = configuration.get(KonanConfigKeys.LIBRARY_TO_ADD_TO_CACHE)?.let { libPath ->
-            if (configuration.get(KonanConfigKeys.MAKE_PER_FILE_CACHE) != true)
-                configuration.get(KonanConfigKeys.FILES_TO_CACHE)
-            else {
-                val lib = createKonanLibrary(File(libPath), "default", null, true)
-                (0 until lib.fileCount()).map { fileIndex ->
-                    val proto = IrFile.parseFrom(lib.file(fileIndex).codedInputStream, ExtensionRegistryLite.newInstance())
-                    proto.fileEntry.name
+            val filesToCache = configuration.get(KonanConfigKeys.FILES_TO_CACHE)
+            when {
+                !filesToCache.isNullOrEmpty() -> filesToCache
+                configuration.get(KonanConfigKeys.MAKE_PER_FILE_CACHE) == true -> {
+                    val lib = createKonanLibrary(File(libPath), "default", null, true)
+                    (0 until lib.fileCount()).map { fileIndex ->
+                        val proto = IrFile.parseFrom(lib.file(fileIndex).codedInputStream, ExtensionRegistryLite.newInstance())
+                        proto.fileEntry.name
+                    }
                 }
+                else -> null
             }
         }
         if (fileNames != null) {
@@ -75,6 +78,8 @@ class KonanDriver(
             konanConfig = KonanConfig(project, configuration) // TODO: Just set freshly built caches.
         }
 
+        konanConfig.cacheSupport.checkConsistency()
+
         DynamicCompilerDriver().run(konanConfig, environment)
     }
 
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/SetupConfiguration.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/SetupConfiguration.kt
index ebddfb102d4..3694bf5718b 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/SetupConfiguration.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/SetupConfiguration.kt
@@ -177,6 +177,11 @@ fun CompilerConfiguration.setupFromArguments(arguments: K2NativeCompilerArgument
     put(CACHE_DIRECTORIES, arguments.cacheDirectories.toNonNullList())
     put(AUTO_CACHEABLE_FROM, arguments.autoCacheableFrom.toNonNullList())
     arguments.autoCacheDir?.let { put(AUTO_CACHE_DIR, it) }
+    val incrementalCacheDir = arguments.incrementalCacheDir
+    if ((incrementalCacheDir != null) xor (arguments.incrementalCompilation == true))
+        report(ERROR, "For incremental compilation both flags should be supplied: " +
+                "-Xenable-incremental-compilation and ${K2NativeCompilerArguments.INCREMENTAL_CACHE_DIR}")
+    incrementalCacheDir?.let { put(INCREMENTAL_CACHE_DIR, it) }
     arguments.filesToCache?.let { put(FILES_TO_CACHE, it.toList()) }
     put(MAKE_PER_FILE_CACHE, arguments.makePerFileCache)
     val nThreadsRaw = parseBackendThreads(arguments.backendThreads)
@@ -302,6 +307,7 @@ internal fun CompilerConfiguration.setupCommonOptionsForCaches(konanConfig: Kona
     put(BinaryOptions.freezing, konanConfig.freezing)
     put(BinaryOptions.runtimeAssertionsMode, konanConfig.runtimeAssertsMode)
     put(LAZY_IR_FOR_CACHES, konanConfig.lazyIrForCaches)
+    put(CommonConfigurationKeys.PARALLEL_BACKEND_THREADS, konanConfig.threadsCount)
 }
 
 private fun Array<String>?.toNonNullList() = this?.asList().orEmpty()
diff --git a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/driver/phases/TopLevelPhases.kt b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/driver/phases/TopLevelPhases.kt
index e6965000cd0..d77f4cd7013 100644
--- a/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/driver/phases/TopLevelPhases.kt
+++ b/kotlin-native/backend.native/compiler/ir/backend.native/src/org/jetbrains/kotlin/backend/konan/driver/phases/TopLevelPhases.kt
@@ -12,7 +12,6 @@ import org.jetbrains.kotlin.backend.konan.driver.utilities.CExportFiles
 import org.jetbrains.kotlin.backend.konan.driver.utilities.createTempFiles
 import org.jetbrains.kotlin.backend.konan.ir.konanLibrary
 import org.jetbrains.kotlin.cli.jvm.compiler.KotlinCoreEnvironment
-import org.jetbrains.kotlin.config.CommonConfigurationKeys
 import org.jetbrains.kotlin.ir.declarations.IrClass
 import org.jetbrains.kotlin.ir.declarations.IrDeclaration
 import org.jetbrains.kotlin.ir.declarations.IrModuleFragment
@@ -119,8 +118,8 @@ internal fun <C : PhaseContext> PhaseEngine<C>.runBackend(backendContext: Contex
         }
 
         val fragments = backendEngine.splitIntoFragments(irModule)
-        val nThreads = context.config.configuration.get(CommonConfigurationKeys.PARALLEL_BACKEND_THREADS) ?: 1
-        if (nThreads == 1) {
+        val threadsCount = context.config.threadsCount
+        if (threadsCount == 1) {
             fragments.forEach { fragment ->
                 runAfterLowerings(fragment, createGenerationStateAndRunLowerings(fragment))
             }
@@ -133,9 +132,9 @@ internal fun <C : PhaseContext> PhaseEngine<C>.runBackend(backendContext: Contex
                 // We'd love to run entire pipeline in parallel, but it's difficult (mainly because of the lowerings,
                 // which need cross-file access all the time and it's not easy to overcome this). So, for now,
                 // we split the pipeline into two parts - everything before lowerings (including them)
-                // which is run sequentially, and everything else which in run in parallel.
+                // which is run sequentially, and everything else which is run in parallel.
                 val generationStates = fragmentsList.map { fragment -> createGenerationStateAndRunLowerings(fragment) }
-                val executor = Executors.newFixedThreadPool(nThreads)
+                val executor = Executors.newFixedThreadPool(threadsCount)
                 val thrownFromThread = AtomicReference<Throwable?>(null)
                 val tasks = fragmentsList.zip(generationStates).map { (fragment, generationState) ->
                     Callable {