diff --git a/jps/jps-builders/jps-builders.iml b/jps/jps-builders/jps-builders.iml
index d1369153c229..0ccf7c772704 100644
--- a/jps/jps-builders/jps-builders.iml
+++ b/jps/jps-builders/jps-builders.iml
@@ -28,6 +28,7 @@
       </library>
     </orderEntry>
     <orderEntry type="library" name="jna" level="project" />
+    <orderEntry type="module" module-name="groovy-rt" />
   </component>
 </module>
 
diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/BuilderRegistry.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/BuilderRegistry.java
index 7fc1a61dea8a..cc864d20227f 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/BuilderRegistry.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/BuilderRegistry.java
@@ -1,5 +1,6 @@
 package org.jetbrains.jps.incremental;
 
+import org.jetbrains.jps.incremental.groovy.GroovyBuilder;
 import org.jetbrains.jps.incremental.java.JavaBuilder;
 import org.jetbrains.jps.incremental.resourses.ResourcesBuilder;
 
@@ -37,6 +38,7 @@ public class BuilderRegistry {
     // todo: some builder registration mechanism needed
     myBuilders.get(BuilderCategory.TRANSLATOR).add(new JavaBuilder(myTasksExecutor));
     myBuilders.get(BuilderCategory.TRANSLATOR).add(new ResourcesBuilder());
+    myBuilders.get(BuilderCategory.TRANSLATOR).add(new GroovyBuilder());
 
   }
 
diff --git a/jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovyBuilder.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovyBuilder.java
index 5c5e186f8b43..7c55a97f81f3 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovyBuilder.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovyBuilder.java
@@ -1,9 +1,22 @@
 package org.jetbrains.jps.incremental.groovy;
 
+
+import com.intellij.openapi.util.io.FileUtil;
+import com.intellij.openapi.util.text.StringUtil;
+import com.intellij.util.SystemProperties;
+import org.jetbrains.groovy.compiler.rt.GroovyCompilerWrapper;
 import org.jetbrains.jps.ModuleChunk;
 import org.jetbrains.jps.incremental.Builder;
 import org.jetbrains.jps.incremental.CompileContext;
+import org.jetbrains.jps.incremental.FilesCollector;
 import org.jetbrains.jps.incremental.ProjectBuildException;
+import org.jetbrains.jps.server.ClasspathBootstrap;
+
+import java.io.*;
+import java.net.MalformedURLException;
+import java.util.ArrayList;
+import java.util.Collection;
+import java.util.List;
 
 /**
  * @author Eugene Zhuravlev
@@ -16,11 +29,126 @@ public class GroovyBuilder extends Builder {
     return BUILDER_NAME;
   }
 
-  public ExitCode build(CompileContext context, ModuleChunk chunk) throws ProjectBuildException {
+  public Builder.ExitCode build(CompileContext context, ModuleChunk chunk) throws ProjectBuildException {
+    FilesCollector collector = new FilesCollector(new FileFilter() {
+      @Override
+      public boolean accept(File pathname) {
+        return pathname.getPath().endsWith(".groovy"); //todo file type check
+      }
+    });
+    try {
+      context.processFiles(chunk, collector);
+    }
+    catch (Exception e) {
+      throw new ProjectBuildException(e);
+    }
+
+    if (collector.getFiles().isEmpty()) {
+      return Builder.ExitCode.OK;
+    }
+    
+    List<String> cp = new ArrayList<String>();
+
+    try {
+      Collection<File> boot =
+        context.getProjectPaths().getPlatformCompilationClasspath(chunk, context.isCompilingTests(), context.isMake());
+      for (File file : boot) {
+        file.toURI().toURL();
+      }
+      Collection<File> main =
+        context.getProjectPaths().getCompilationClasspath(chunk, context.isCompilingTests(), context.isMake());
+      for (File file : main) {
+        cp.add(FileUtil.toSystemIndependentName(file.getPath()));
+      }
+      cp.add(ClasspathBootstrap.getResourcePath(GroovyCompilerWrapper.class).getPath()); //groovy_rt.jar
+    }
+    catch (MalformedURLException e) {
+      throw new ProjectBuildException(e);
+    }
+
+    try {
+      File tempFile = FileUtil.createTempFile("ideaGroovyToCompile", ".txt", true);
+
+      List<String> cmd = new ArrayList<String>();
+      cmd.add(SystemProperties.getJavaHome() + "/bin/java"); //todo module jdk path
+      // todo cmd.add("-bootclasspath");
+      cmd.add("-cp");
+      cmd.add(StringUtil.join(cp, File.pathSeparator));
+      cmd.add("org.jetbrains.groovy.compiler.rt.GroovycRunner");
+      cmd.add("groovyc");
+      cmd.add(tempFile.getPath());
+
+      File dir = context.getProjectPaths().getModuleOutputDir(chunk.getModules().iterator().next(), context.isCompilingTests());
+      assert dir != null;
+      fillFileWithGroovycParameters(collector, tempFile, dir.getPath());
+
+      Process process = Runtime.getRuntime().exec(cmd.toArray(new String[cmd.size()]));
+      StreamReader stdout = new StreamReader(process.getInputStream(), System.out);
+      stdout.start();
+      StreamReader stderr = new StreamReader(process.getErrorStream(), System.out);
+      stderr.start();
+      stdout.join();
+      stderr.join();
+      process.waitFor();
+    }
+    catch (Exception e) {
+      throw new ProjectBuildException(e);
+    }
+
     return ExitCode.OK;
   }
 
+  private static void fillFileWithGroovycParameters(FilesCollector collector, File tempFile, final String outputDir) throws IOException {
+    String fileText = "";
+    for (File file : collector.getFiles()) {
+      fileText += "src_file\n";
+      fileText += file.getPath() + "\n";
+      //todo file2Classes
+      fileText += "end" + "\n";
+    }
+
+    //todo patchers
+    fileText += "encoding\n";
+    fileText += "UTF-8\n"; //todo encoding
+    fileText += "outputpath\n";
+    fileText += outputDir + "\n";
+    fileText += "finaloutputpath\n";
+    fileText += outputDir + "\n";
+
+    FileWriter writer = new FileWriter(tempFile);
+    writer.write(fileText);
+    writer.close();
+  }
+
   public String getDescription() {
     return "Groovy builder";
   }
+  
+  static class StreamReader extends Thread {
+    private final BufferedReader myStream;
+    private final PrintStream myWriter;
+
+    StreamReader(InputStream stream, PrintStream writer) {
+      myStream = new BufferedReader(new InputStreamReader(stream));
+      myWriter = writer;
+    }
+
+    @Override
+    public void run() {
+      while (true) {
+        String line = null;
+        try {
+          line = myStream.readLine();
+        }
+        catch (IOException e) {
+          e.printStackTrace();  //todo change body of catch statement use File | Settings | File Templates.
+        }
+        if (line == null) {
+          break;
+        }
+        
+        myWriter.println(line);
+      }
+    }
+  }
 }
diff --git a/plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovycOSProcessHandler.java b/jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovycOSProcessHandler.java
similarity index 94%
rename from plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovycOSProcessHandler.java
rename to jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovycOSProcessHandler.java
index 69d8e788ed91..3924819662a0 100644
--- a/plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovycOSProcessHandler.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/incremental/groovy/GroovycOSProcessHandler.java
@@ -14,9 +14,9 @@
  * limitations under the License.
  */
 
-package org.jetbrains.plugins.groovy.compiler;
+package org.jetbrains.jps.incremental.groovy;
 
-import com.intellij.execution.process.OSProcessHandler;
+import com.intellij.execution.process.BaseOSProcessHandler;
 import com.intellij.execution.process.ProcessOutputTypes;
 import com.intellij.openapi.diagnostic.Logger;
 import com.intellij.openapi.util.Key;
@@ -28,6 +28,7 @@ import org.jetbrains.groovy.compiler.rt.GroovyCompilerWrapper;
 import org.jetbrains.groovy.compiler.rt.GroovycRunner;
 
 import java.io.File;
+import java.nio.charset.Charset;
 import java.util.ArrayList;
 import java.util.HashSet;
 import java.util.List;
@@ -37,16 +38,16 @@ import java.util.Set;
  * @author: Dmitry.Krasilschikov
  * @date: 16.04.2007
  */
-public class GroovycOSProcessHandler extends OSProcessHandler {
+public class GroovycOSProcessHandler extends BaseOSProcessHandler {
   private final List<GroovyCompilerWrapper.OutputItem> myCompiledItems = new ArrayList<GroovyCompilerWrapper.OutputItem>();
   private final Set<File> toRecompileFiles = new HashSet<File>();
   private final List<CompilerMessage> compilerMessages = new ArrayList<CompilerMessage>();
   private final StringBuffer stdErr = new StringBuffer();
 
-  private static final Logger LOG = Logger.getInstance("org.jetbrains.plugins.groovy.compiler.GroovycOSProcessHandler");
+  private static final Logger LOG = Logger.getInstance("org.jetbrains.jps.incremental.groovy.GroovycOSProcessHandler");
 
   public GroovycOSProcessHandler(Process process, String s) {
-    super(process, s);
+    super(process, s, Charset.forName("UTF-8"));
   }
 
   public void notifyTextAvailable(final String text, final Key outputType) {
diff --git a/jps/jps-builders/src/org/jetbrains/jps/server/ClasspathBootstrap.java b/jps/jps-builders/src/org/jetbrains/jps/server/ClasspathBootstrap.java
index 9ee8e9724bc2..3f98223aac9c 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/server/ClasspathBootstrap.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/server/ClasspathBootstrap.java
@@ -27,6 +27,7 @@ import gnu.trove.TIntHash;
 import net.n3.nanoxml.IXMLBuilder;
 import org.codehaus.groovy.GroovyException;
 import org.jetbrains.annotations.Nullable;
+import org.jetbrains.groovy.compiler.rt.GroovyCompilerWrapper;
 import org.jetbrains.jps.MacroExpander;
 import org.objectweb.asm.ClassWriter;
 
@@ -84,6 +85,7 @@ public class ClasspathBootstrap {
     cp.add(getResourcePath(CellConstraints.class));  // jgoodies-forms
     cp.add(getResourcePath(NotNullVerifyingInstrumenter.class));  // not-null
     cp.add(getResourcePath(IXMLBuilder.class));  // nano-xml
+    cp.add(getResourcePath(GroovyCompilerWrapper.class));  // groovy_rt
 
     final Class<StandardJavaFileManager> optimizedFileManagerClass = getOptimizedFileManagerClass();
     if (optimizedFileManagerClass != null) {
diff --git a/plugins/groovy/jetgroovy.iml b/plugins/groovy/jetgroovy.iml
index 883b5316b0df..bcb38c12e2ff 100644
--- a/plugins/groovy/jetgroovy.iml
+++ b/plugins/groovy/jetgroovy.iml
@@ -29,6 +29,7 @@
     <orderEntry type="module" module-name="testFramework-java" scope="TEST" />
     <orderEntry type="module" module-name="IntelliLang-java" scope="TEST" />
     <orderEntry type="module" module-name="IntelliLang-xml" scope="TEST" />
+    <orderEntry type="module" module-name="jps-builders" />
   </component>
 </module>
 
diff --git a/plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovyCompilerBase.java b/plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovyCompilerBase.java
index e3f09ca1f332..49615536597a 100644
--- a/plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovyCompilerBase.java
+++ b/plugins/groovy/src/org/jetbrains/plugins/groovy/compiler/GroovyCompilerBase.java
@@ -72,6 +72,7 @@ import org.jetbrains.annotations.Nullable;
 import org.jetbrains.groovy.compiler.rt.CompilerMessage;
 import org.jetbrains.groovy.compiler.rt.GroovyCompilerWrapper;
 import org.jetbrains.groovy.compiler.rt.GroovycRunner;
+import org.jetbrains.jps.incremental.groovy.GroovycOSProcessHandler;
 import org.jetbrains.plugins.groovy.GroovyFileType;
 import org.jetbrains.plugins.groovy.config.GroovyConfigUtils;
 import org.jetbrains.plugins.groovy.extensions.GroovyScriptType;