diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/Builder.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/Builder.java
index e6d82790bac3..d52217717e6a 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/Builder.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/Builder.java
@@ -71,10 +71,8 @@ public abstract class Builder {
         if (incremental) {
           final Set<File> newlyAffectedFiles = new HashSet<File>(allAffectedFiles);
           newlyAffectedFiles.removeAll(affectedBeforeDif);
-          // todo: temp code
-          for (String removedPath : removedPaths) {
-            newlyAffectedFiles.remove(new File(removedPath));
-          }
+          newlyAffectedFiles.removeAll(allCompiledFiles); // the diff operation may have affected the class already compiled in thic compilation round
+
           if (!newlyAffectedFiles.isEmpty()) {
             for (File file : newlyAffectedFiles) {
               context.markDirty(file);
diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/CompileContext.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/CompileContext.java
index 4de33f00731f..57a9972ed5e2 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/CompileContext.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/CompileContext.java
@@ -126,6 +126,10 @@ public class CompileContext extends UserDataHolderBase implements MessageHandler
     myCompilingTests = compilingTests;
   }
 
+  public void onChunkBuildStart(ModuleChunk chunk) {
+    myFsState.setContextChunk(chunk);
+  }
+
   void beforeNextCompileRound(@NotNull ModuleChunk chunk) {
     myFsState.beforeNextRoundStart();
   }
@@ -150,7 +154,7 @@ public class CompileContext extends UserDataHolderBase implements MessageHandler
       }
     }
     finally {
-      myFsState.clearRoundDeltas();
+      myFsState.clearContextRoundData();
     }
   }
 
@@ -204,7 +208,7 @@ public class CompileContext extends UserDataHolderBase implements MessageHandler
       // can check if the file exists
       final File file = new File(path);
       if (!currentFiles.contains(file)) {
-        myFsState.registerDeleted(module, path, isCompilingTests(), myTsStorage);
+        myFsState.registerDeleted(module, file, isCompilingTests(), myTsStorage);
       }
     }
   }
@@ -224,10 +228,6 @@ public class CompileContext extends UserDataHolderBase implements MessageHandler
     return myRootsIndex.getModuleRoots(module);
   }
 
-  public int getTotalModuleCount() {
-    return myRootsIndex.getTotalModuleCount();
-  }
-
   public void setDone(float done) {
     myDone = done;
     processMessage(new ProgressMessage("", done));
diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/FSState.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/FSState.java
index 50ad6fe45b6e..950265a6950c 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/FSState.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/FSState.java
@@ -5,6 +5,7 @@ import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jps.CompilerExcludes;
 import org.jetbrains.jps.Module;
+import org.jetbrains.jps.ModuleChunk;
 import org.jetbrains.jps.incremental.storage.TimestampStorage;
 
 import java.io.File;
@@ -18,6 +19,8 @@ public class FSState {
   private final Map<Module, FilesDelta> myDeltas = Collections.synchronizedMap(new HashMap<Module, FilesDelta>());
   private final Set<Module> myInitialTestsScanPerformed = Collections.synchronizedSet(new HashSet<Module>());
   private final Set<Module> myInitialProductionScanPerformed = Collections.synchronizedSet(new HashSet<Module>());
+
+  private final Set<Module> myContextModules = new HashSet<Module>();
   private volatile FilesDelta myCurrentRoundDelta;
   private volatile FilesDelta myLastRoundDelta;
 
@@ -25,7 +28,7 @@ public class FSState {
   }
 
   public void onRebuild() {
-    clearRoundDeltas();
+    clearContextRoundData();
     myInitialProductionScanPerformed.clear();
     myInitialTestsScanPerformed.clear();
     myDeltas.clear();
@@ -36,14 +39,19 @@ public class FSState {
     return map.add(module);
   }
 
+  public void setContextChunk(ModuleChunk chunk) {
+    myContextModules.addAll(chunk.getModules());
+  }
+
   public void beforeNextRoundStart() {
     myLastRoundDelta = myCurrentRoundDelta;
     myCurrentRoundDelta = new FilesDelta();
   }
 
-  public void clearRoundDeltas() {
+  public void clearContextRoundData() {
     myCurrentRoundDelta = null;
     myLastRoundDelta = null;
+    myContextModules.clear();
   }
 
   public void clearRecompile(RootDescriptor rd) {
@@ -53,7 +61,9 @@ public class FSState {
   public void markDirty(final File file, final RootDescriptor rd, final @Nullable TimestampStorage tsStorage) throws Exception {
     final FilesDelta roundDelta = myCurrentRoundDelta;
     if (roundDelta != null) {
-      roundDelta.markRecompile(rd.root, rd.isTestRoot, file);
+      if (myContextModules.contains(rd.module)) {
+        roundDelta.markRecompile(rd.root, rd.isTestRoot, file);
+      }
     }
     final FilesDelta mainDelta = getDelta(rd.module);
     final boolean marked = mainDelta.markRecompile(rd.root, rd.isTestRoot, file);
@@ -108,10 +118,10 @@ public class FSState {
     return true;
   }
 
-  public void registerDeleted(final Module module, final String path, final boolean isTest, @Nullable TimestampStorage tsStorage) throws Exception {
-    getDelta(module).addDeleted(path, isTest);
+  public void registerDeleted(final Module module, final File file, final boolean isTest, @Nullable TimestampStorage tsStorage) throws Exception {
+    getDelta(module).addDeleted(file, isTest);
     if (tsStorage != null) {
-      tsStorage.remove(new File(path));
+      tsStorage.remove(file);
     }
   }
 
@@ -161,9 +171,16 @@ public class FSState {
       return files.add(file);
     }
 
-    public void addDeleted(String path, boolean isTest) {
-      final Set<String> map = isTest? myDeletedTests : myDeletedProduction;
-      map.add(path);
+    public void addDeleted(File file, boolean isTest) {
+      // ensure the file is no more marked to recompilation
+      final Map<File, Set<File>> toRecompile = isTest ? myTestsToRecompile : mySourcesToRecompile;
+      synchronized (toRecompile) {
+        for (Set<File> files : toRecompile.values()) {
+          files.remove(file);
+        }
+      }
+      final Set<String> deletedMap = isTest? myDeletedTests : myDeletedProduction;
+      deletedMap.add(FileUtil.toCanonicalPath(file.getPath()));
     }
 
     public void clearDeletedPaths(boolean isTest) {
diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/IncProjectBuilder.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/IncProjectBuilder.java
index 05eadf134526..c7ac05d9ebc9 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/IncProjectBuilder.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/IncProjectBuilder.java
@@ -273,6 +273,8 @@ public class IncProjectBuilder {
         }
       }
 
+      context.onChunkBuildStart(chunk);
+
       for (BuilderCategory category : BuilderCategory.values()) {
         runBuilders(context, chunk, category);
       }
diff --git a/jps/jps-builders/src/org/jetbrains/jps/server/ServerState.java b/jps/jps-builders/src/org/jetbrains/jps/server/ServerState.java
index 460bcaaf6b31..bfce4ceabeba 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/server/ServerState.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/server/ServerState.java
@@ -1,7 +1,6 @@
 package org.jetbrains.jps.server;
 
 import com.intellij.openapi.diagnostic.Logger;
-import com.intellij.openapi.util.io.FileUtil;
 import org.codehaus.groovy.runtime.MethodClosure;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jps.JavaSdk;
@@ -66,7 +65,7 @@ class ServerState {
     try {
       final RootDescriptor moduleAndRoot = pd.rootsIndex.getModuleAndRoot(file);
       if (moduleAndRoot != null) {
-        pd.fsState.registerDeleted(moduleAndRoot.module, FileUtil.toCanonicalPath(file.getPath()), moduleAndRoot.isTestRoot, pd.timestamps.getStorage());
+        pd.fsState.registerDeleted(moduleAndRoot.module, file, moduleAndRoot.isTestRoot, pd.timestamps.getStorage());
       }
     }
     catch (Exception e) {