diff --git a/java/compiler/impl/src/com/intellij/compiler/options/TargetOptionsComponent.java b/java/compiler/impl/src/com/intellij/compiler/options/TargetOptionsComponent.java
index 6201dd05d278..b7a7d6fcb5f5 100644
--- a/java/compiler/impl/src/com/intellij/compiler/options/TargetOptionsComponent.java
+++ b/java/compiler/impl/src/com/intellij/compiler/options/TargetOptionsComponent.java
@@ -41,7 +41,7 @@ import java.util.List;
  */
 public class TargetOptionsComponent extends JPanel {
   private static final String[] KNOWN_TARGETS = new String[] {"1.1", "1.2", "1.3","1.4","1.5", "1.6", "1.7", "1.8"};
-  private static final String COMPILER_DEFAULT = "JDK default";
+  private static final String COMPILER_DEFAULT = "Same as language level";
 
   private ComboBox myCbProjectTargetLevel;
   private JBTable myTable;
@@ -312,7 +312,7 @@ public class TargetOptionsComponent extends JPanel {
     combo.setEditor(new BasicComboBoxEditor() {
       @Override
       protected JTextField createEditorComponent() {
-        return new HintTextField(COMPILER_DEFAULT, 10);
+        return new HintTextField(COMPILER_DEFAULT, 12);
       }
     });
     return combo;
diff --git a/java/compiler/openapi/src/com/intellij/compiler/ant/ModuleChunk.java b/java/compiler/openapi/src/com/intellij/compiler/ant/ModuleChunk.java
index a6302ae00da6..3dbced26844f 100644
--- a/java/compiler/openapi/src/com/intellij/compiler/ant/ModuleChunk.java
+++ b/java/compiler/openapi/src/com/intellij/compiler/ant/ModuleChunk.java
@@ -138,13 +138,22 @@ public class ModuleChunk {
     if (encoding != null) {
       appendOption(options, "-encoding", encoding.name());
     }
-    appendOption(options, "-source", getLanguageLevelOption(ApplicationManager.getApplication().runReadAction(new Computable<LanguageLevel>() {
+    
+    final String languageLevel = getLanguageLevelOption(ApplicationManager.getApplication().runReadAction(new Computable<LanguageLevel>() {
       @Override
       public LanguageLevel compute() {
         return EffectiveLanguageLevelUtil.getEffectiveLanguageLevel(myMainModule);
       }
-    })));
-    appendOption(options, "-target", CompilerConfiguration.getInstance(getProject()).getBytecodeTargetLevel(myMainModule));
+    }));
+    appendOption(options, "-source", languageLevel);
+    
+    String bytecodeTarget = CompilerConfiguration.getInstance(getProject()).getBytecodeTargetLevel(myMainModule);
+    if (StringUtil.isEmpty(bytecodeTarget)) {
+      // according to IDEA rule: if not specified explicitly, set target to be the same as source language level
+      bytecodeTarget = languageLevel;
+    }
+    appendOption(options, "-target", bytecodeTarget);
+    
     return options.toString();
   }
 
diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/java/JavaBuilder.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/java/JavaBuilder.java
index f1b9d3cf1867..139bbf20ef0e 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/java/JavaBuilder.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/java/JavaBuilder.java
@@ -676,9 +676,15 @@ public class JavaBuilder extends ModuleLevelBuilder {
     }
     
     if (bytecodeTarget == null) {
-      // last resort and backward compatibility: 
-      // check if user explicitly defined bytecode target in additional compiler options
-      bytecodeTarget = USER_DEFINED_BYTECODE_TARGET.get(context);
+      if (!StringUtil.isEmpty(langLevel)) {
+        // according to IDEA rule: if not specified explicitly, set target to be the same as source language level
+        bytecodeTarget = langLevel;
+      }
+      else {
+        // last resort and backward compatibility: 
+        // check if user explicitly defined bytecode target in additional compiler options
+        bytecodeTarget = USER_DEFINED_BYTECODE_TARGET.get(context);
+      }
     }
 
     final int compilerSdkVersion = getCompilerSdkVersion(context);