diff --git a/v2/tools/builtin.jam b/v2/tools/builtin.jam
index 8dd28959f..42e726dfa 100644
--- a/v2/tools/builtin.jam
+++ b/v2/tools/builtin.jam
@@ -404,7 +404,10 @@ class lib-generator : generator
             local properties = [ $(property-set).raw ] ;
             # Determine the needed target type
             local actual-type ;
-            if <search> in $(properties:G) || <name> in $(properties:G)
+	        # <source>files can be generated by <conditional>@rule feature
+	        # in which case we don't consider it a SEARCHED_LIB type.
+            if ! <source> in $(properties:G) &&
+               ( <search> in $(properties:G) || <name> in $(properties:G) )
             {
                 actual-type = SEARCHED_LIB ;
             }