diff --git a/java/compiler/impl/src/com/intellij/compiler/CompileServerManager.java b/java/compiler/impl/src/com/intellij/compiler/CompileServerManager.java
index e18338b37be3..fe90cf55f562 100644
--- a/java/compiler/impl/src/com/intellij/compiler/CompileServerManager.java
+++ b/java/compiler/impl/src/com/intellij/compiler/CompileServerManager.java
@@ -62,7 +62,9 @@ import org.jetbrains.jps.server.Server;
 import javax.tools.JavaCompiler;
 import javax.tools.ToolProvider;
 import java.io.File;
+import java.io.FileOutputStream;
 import java.io.IOException;
+import java.io.InputStream;
 import java.util.*;
 import java.util.concurrent.Future;
 import java.util.concurrent.RunnableFuture;
@@ -75,6 +77,8 @@ import java.util.concurrent.TimeUnit;
 public class CompileServerManager implements ApplicationComponent{
   private static final Logger LOG = Logger.getInstance("#com.intellij.compiler.CompileServerManager");
   private static final String COMPILE_SERVER_SYSTEM_ROOT = "compile-server";
+  private static final String LOGGER_CONFIG = "log.xml";
+  private static final String DEFAULT_LOGGER_CONFIG = "defaultLogConfig.xml";
   private volatile OSProcessHandler myProcessHandler;
   private final File mySystemDirectory;
   private volatile CompileServerClient myClient = new CompileServerClient();
@@ -465,14 +469,43 @@ public class CompileServerManager implements ApplicationComponent{
 
     final File workDirectory = new File(mySystemDirectory, COMPILE_SERVER_SYSTEM_ROOT);
     workDirectory.mkdirs();
+    ensureLogConfigExists(workDirectory);
 
     cmdLine.addParameter(FileUtil.toSystemIndependentName(workDirectory.getPath()));
 
     cmdLine.setWorkDirectory(workDirectory);
 
+
     return cmdLine.createProcess();
   }
 
+  private static void ensureLogConfigExists(File workDirectory) {
+    final File logConfig = new File(workDirectory, LOGGER_CONFIG);
+    if (!logConfig.exists()) {
+      FileUtil.createIfDoesntExist(logConfig);
+      try {
+        final InputStream in = Server.class.getResourceAsStream("/" + DEFAULT_LOGGER_CONFIG);
+        if (in != null) {
+          try {
+            final FileOutputStream out = new FileOutputStream(logConfig);
+            try {
+              FileUtil.copy(in, out);
+            }
+            finally {
+              out.close();
+            }
+          }
+          finally {
+            in.close();
+          }
+        }
+      }
+      catch (IOException e) {
+        LOG.error(e);
+      }
+    }
+  }
+
   public void shutdownServer() {
     shutdownServer(myClient, myProcessHandler);
   }
diff --git a/jps/jps-builders/src/defaultLogConfig.xml b/jps/jps-builders/src/defaultLogConfig.xml
new file mode 100644
index 000000000000..6298b4ac324a
--- /dev/null
+++ b/jps/jps-builders/src/defaultLogConfig.xml
@@ -0,0 +1,17 @@
+<?xml version="1.0" encoding="UTF-8" ?>
+<!DOCTYPE log4j:configuration SYSTEM "log4j.dtd">
+
+<log4j:configuration xmlns:log4j="http://jakarta.apache.org/log4j/">
+  <appender name="console" class="org.apache.log4j.ConsoleAppender">
+    <param name="Target" value="System.out"/>
+    <layout class="org.apache.log4j.PatternLayout">
+      <param name="ConversionPattern" value="%-5p %c{1} - %m%n"/>
+    </layout>
+  </appender>
+
+  <root>
+    <priority value ="debug" />
+    <appender-ref ref="console" />
+  </root>
+
+</log4j:configuration>
diff --git a/jps/jps-builders/src/org/jetbrains/jps/server/Server.java b/jps/jps-builders/src/org/jetbrains/jps/server/Server.java
index bca35537efce..8cdde853f06c 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/server/Server.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/server/Server.java
@@ -34,6 +34,7 @@ public class Server {
   private static final int MAX_SIMULTANEOUS_BUILD_SESSIONS = Math.max(2, Runtime.getRuntime().availableProcessors());
   public static final String SERVER_SUCCESS_START_MESSAGE = "Compile Server started successfully. Listening on port: ";
   public static final String SERVER_ERROR_START_MESSAGE = "Error starting Compile Server: ";
+  private static final String LOG_FILE_NAME = "log.xml";
 
   private final ChannelGroup myAllOpenChannels = new DefaultChannelGroup("compile-server");
   private final ChannelFactory myChannelFactory;
@@ -98,72 +99,14 @@ public class Server {
       }
 
       final Server server = new Server(systemDir);
-
-      if (new File("log.xml").exists()) {
-        DOMConfigurator.configure("log.xml");
-      }
-
-      Logger.setFactory(new Logger.Factory() {
-        @Override
-        public Logger getLoggerInstance(String category) {
-          final org.apache.log4j.Logger logger = org.apache.log4j.Logger.getLogger(category);
-          
-          return new Logger(){
-            @Override
-            public boolean isDebugEnabled() {
-              return logger.isDebugEnabled();
-            }
-
-            @Override
-            public void debug(@NonNls String message) {
-              logger.debug(message);
-            }
-
-            @Override
-            public void debug(@Nullable Throwable t) {
-              logger.debug("", t);
-            }
-
-            @Override
-            public void debug(@NonNls String message, @Nullable Throwable t) {
-              logger.debug(message, t);
-            }
-
-            @Override
-            public void error(@NonNls String message, @Nullable Throwable t, @NonNls String... details) {
-              logger.debug(message, t);
-            }
-
-            @Override
-            public void info(@NonNls String message) {
-              logger.info(message);
-            }
-
-            @Override
-            public void info(@NonNls String message, @Nullable Throwable t) {
-              logger.info(message, t);
-            }
-
-            @Override
-            public void warn(@NonNls String message, @Nullable Throwable t) {
-              logger.warn(message, t);
-            }
-
-            @Override
-            public void setLevel(Level level) {
-              logger.setLevel(level);
-            }
-          };
-        }
-      });
-
-      server.start(port);
       Runtime.getRuntime().addShutdownHook(new Thread("Shutdown hook thread") {
         public void run() {
           server.stop();
         }
       });
 
+      initLoggers();
+      server.start(port);
       ServerState.getInstance().setKeepTempCachesInMemory(System.getProperty(GlobalOptions.USE_MEMORY_TEMP_CACHE_OPTION) != null);
 
       System.out.println("Server classpath: " + System.getProperty("java.class.path"));
@@ -176,6 +119,66 @@ public class Server {
     }
   }
 
+  private static void initLoggers() {
+    if (new File(LOG_FILE_NAME).exists()) {
+      DOMConfigurator.configure(LOG_FILE_NAME);
+    }
+
+    Logger.setFactory(new Logger.Factory() {
+      @Override
+      public Logger getLoggerInstance(String category) {
+        final org.apache.log4j.Logger logger = org.apache.log4j.Logger.getLogger(category);
+
+        return new Logger() {
+          @Override
+          public boolean isDebugEnabled() {
+            return logger.isDebugEnabled();
+          }
+
+          @Override
+          public void debug(@NonNls String message) {
+            logger.debug(message);
+          }
+
+          @Override
+          public void debug(@Nullable Throwable t) {
+            logger.debug("", t);
+          }
+
+          @Override
+          public void debug(@NonNls String message, @Nullable Throwable t) {
+            logger.debug(message, t);
+          }
+
+          @Override
+          public void error(@NonNls String message, @Nullable Throwable t, @NonNls String... details) {
+            logger.debug(message, t);
+          }
+
+          @Override
+          public void info(@NonNls String message) {
+            logger.info(message);
+          }
+
+          @Override
+          public void info(@NonNls String message, @Nullable Throwable t) {
+            logger.info(message, t);
+          }
+
+          @Override
+          public void warn(@NonNls String message, @Nullable Throwable t) {
+            logger.warn(message, t);
+          }
+
+          @Override
+          public void setLevel(Level level) {
+            logger.setLevel(level);
+          }
+        };
+      }
+    });
+  }
+
   private class ChannelRegistrar extends SimpleChannelUpstreamHandler {
     public void channelOpen(ChannelHandlerContext ctx, ChannelStateEvent e) throws Exception {
       myAllOpenChannels.add(e.getChannel());