diff --git a/v2/example/generate/Jamroot b/v2/example/generate/Jamroot
new file mode 100644
index 000000000..b179e7d19
--- /dev/null
+++ b/v2/example/generate/Jamroot
@@ -0,0 +1,32 @@
+
+import common ;
+import "class" : new ;
+
+rule generate-example ( project name ? : property-set : sources * )
+{
+    local result ;
+    for local s in $(sources)
+    {
+	#local ea = [ $(s).action ] ;
+	#local ep = [ $(ea).properties ] ;
+	
+	# Create a new action, that takes the source target
+	# and runs 'common.copy' comamnd on it.
+        local a  = [ 
+	   new non-scanning-action $(s) : common.copy : $(property-set) ] ; 
+	   
+	local source-name = [ $(s).name ] ;
+	
+	# Create the target to represent the result of the action.
+	# The target has the name that was specified in Jamfile
+	# and passed here via the 'name' parameter, 
+	# and the same type and project as the source.
+	result += [ new file-target $(name) 
+	    : [ $(s).type ] 
+		: $(project) 
+		    : $(a) ] ; 
+    }	   
+    return $(result) ;
+}
+
+generate a2 : a.cpp : <generating-rule>@generate-example ;
\ No newline at end of file
diff --git a/v2/example/generate/REAME.txt b/v2/example/generate/REAME.txt
new file mode 100644
index 000000000..e4e9e9781
--- /dev/null
+++ b/v2/example/generate/REAME.txt
@@ -0,0 +1,12 @@
+
+This example shows the 'generate' rule, that
+allows you to construct target using any arbitrary
+set of transformation and commands.
+
+The rule is similar to 'make' and 'notfile', but
+unlike those, you can operate in terms of
+Boost.Build 'virtual targets', which is more
+flexible.
+
+Please consult the docs for more explanations.
+
diff --git a/v2/example/generate/a.cpp b/v2/example/generate/a.cpp
new file mode 100644
index 000000000..42187a0de
--- /dev/null
+++ b/v2/example/generate/a.cpp
@@ -0,0 +1,4 @@
+
+int main() 
+{
+}