diff --git a/jps/src/org/jetbrains/jps/artifacts/ComplexLayoutElement.groovy b/jps/src/org/jetbrains/jps/artifacts/ComplexLayoutElement.groovy
index 2ed10cfcfda1..c105923dd481 100644
--- a/jps/src/org/jetbrains/jps/artifacts/ComplexLayoutElement.groovy
+++ b/jps/src/org/jetbrains/jps/artifacts/ComplexLayoutElement.groovy
@@ -75,11 +75,16 @@ class ArtifactLayoutElement extends ComplexLayoutElement {
     }
     def output = project.artifactBuilder.artifactOutputs[artifact]
     if (output != null) {
-      project.binding.ant.fileset(dir: output)
+      LayoutElement root = artifact.rootElement
+      if (root instanceof ArchiveElement) {
+        project.binding.ant.fileset(file: "$output/$root.name")
+      }
+      else {
+        project.binding.ant.fileset(dir: output)
+      }
     }
     else {
       project.error("Required artifact $artifactName is not build")
-//      super.build(project)
     }
   }
 
diff --git a/jps/testData/artifactIncludesArchiveArtifact/a.txt b/jps/testData/artifactIncludesArchiveArtifact/a.txt
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/jps/testData/artifactIncludesArchiveArtifact/artifactIncludesArchiveArtifact.ipr b/jps/testData/artifactIncludesArchiveArtifact/artifactIncludesArchiveArtifact.ipr
new file mode 100644
index 000000000000..92ae3b78b349
--- /dev/null
+++ b/jps/testData/artifactIncludesArchiveArtifact/artifactIncludesArchiveArtifact.ipr
@@ -0,0 +1,24 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="ArtifactManager">
+    <artifact type="jar" name="a">
+      <output-path>$PROJECT_DIR$/data</output-path>
+      <root id="archive" name="a.jar">
+        <element id="file-copy" path="$PROJECT_DIR$/a.txt" />
+      </root>
+    </artifact>
+    <artifact name="data">
+      <output-path>$PROJECT_DIR$/out/artifacts/data</output-path>
+      <root id="root">
+        <element id="artifact" artifact-name="a" />
+      </root>
+    </artifact>
+  </component>
+  <component name="ProjectModuleManager">
+    <modules />
+  </component>
+  <component name="ProjectRootManager" version="2" languageLevel="JDK_1_5" assert-keyword="true" jdk-15="true" project-jdk-name="1.6" project-jdk-type="JavaSDK">
+    <output url="file://$PROJECT_DIR$/out" />
+  </component>
+</project>
+
diff --git a/jps/testData/artifactIncludesArchiveArtifact/data/b.txt b/jps/testData/artifactIncludesArchiveArtifact/data/b.txt
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/jps/testSrc/org/jetbrains/jps/ArtifactIncludesArchiveArtifactTest.groovy b/jps/testSrc/org/jetbrains/jps/ArtifactIncludesArchiveArtifactTest.groovy
new file mode 100644
index 000000000000..230f2fb1e2a8
--- /dev/null
+++ b/jps/testSrc/org/jetbrains/jps/ArtifactIncludesArchiveArtifactTest.groovy
@@ -0,0 +1,30 @@
+package org.jetbrains.jps
+
+/**
+ * @author nik
+ */
+class ArtifactIncludesArchiveArtifactTest extends JpsBuildTestCase {
+  public void test() throws Exception {
+    def name = "artifactIncludesArchiveArtifact"
+    def project = buildAll("testData/$name/${name}.ipr", [:], {Project project ->
+      project.targetFolder = null
+    })
+    try {
+      assertOutput(project, "testData/$name/out", {
+        dir("artifacts") {
+          dir("data") {
+            archive("a.jar") {
+              dir("META-INF") {
+                file("MANIFEST.MF")
+              }
+              file("a.txt")
+            }
+          }
+        }
+      })
+    }
+    finally {
+      project.clean()
+    }
+  }
+}
diff --git a/jps/testSrc/org/jetbrains/jps/JpsBuildTestCase.groovy b/jps/testSrc/org/jetbrains/jps/JpsBuildTestCase.groovy
index f109252537f8..d6ae5059760d 100644
--- a/jps/testSrc/org/jetbrains/jps/JpsBuildTestCase.groovy
+++ b/jps/testSrc/org/jetbrains/jps/JpsBuildTestCase.groovy
@@ -28,9 +28,9 @@ abstract class JpsBuildTestCase extends TestCase {
 
   def protected buildAll(String projectPath, Map<String, String> pathVariables, Closure initProject) {
     Project project = loadProject(projectPath, pathVariables)
-    initProject(project)
     def target = FileUtil.createTempDirectory("targetDir")
     project.targetFolder = target.absolutePath
+    initProject(project)
     project.clean()
     project.makeAll()
     project.buildArtifacts()