diff --git a/src/build/property-set.jam b/src/build/property-set.jam
index b3217f0da..d3e76a35d 100644
--- a/src/build/property-set.jam
+++ b/src/build/property-set.jam
@@ -378,10 +378,15 @@ rule create-with-validation ( raw-properties * )
 #
 rule create-from-user-input ( raw-properties * : jamfile-module location )
 {
+    import project ;
+    import path ;
     local specification = [ property.translate-paths $(raw-properties)
         : $(location) ] ;
     specification = [ property.translate-indirect $(specification)
         : $(jamfile-module) ] ;
+    local project-id = [ project.attribute $(jamfile-module) id ] ;
+    project-id ?= [ path.root [ project.attribute $(jamfile-module) location ] [ path.pwd ] ] ;
+    specification = [ property.translate-dependencies $(specification) : $(project-id) ] ;
     specification =
         [ property.expand-subfeatures-in-conditions $(specification) ] ;
     specification = [ property.make $(specification) ] ;
diff --git a/src/build/property.jam b/src/build/property.jam
index 92b59673a..66bd96858 100644
--- a/src/build/property.jam
+++ b/src/build/property.jam
@@ -511,6 +511,35 @@ rule translate-indirect ( specification * : context-module )
     return $(result) ;
 }
 
+rule translate-dependencies ( specification * : project-id )
+{
+    local result ;
+    for local p in $(specification)
+    {
+        local split = [ split-conditional $(p) ] ;
+        local condition = "" ;
+        if $(split)
+        {
+            condition = $(split[1]): ;
+            p = $(split[2]) ;
+        }
+
+        if dependency in [ feature.attributes $(p:G) ]
+        {
+            if [ regex.match (.*//.*) : $(p:G=) ] {
+                result += $(condition)$(p) ;
+            } else {
+                result += $(condition)$(p:G)$(project-id)//$(p:G=) ;
+            }
+        }
+        else
+        {
+            result += $(condition)$(p) ;
+        }
+    }
+    return $(result) ;
+}
+
 
 # Class maintaining a property set -> string mapping.
 #
diff --git a/test/inherited_dependency.py b/test/inherited_dependency.py
new file mode 100644
index 000000000..cb74163c2
--- /dev/null
+++ b/test/inherited_dependency.py
@@ -0,0 +1,55 @@
+#!/usr/bin/python
+#
+# Copyright (c) 2008 Steven Watanabe
+#
+# Distributed under the Boost Software License, Version 1.0. (See
+# accompanying file LICENSE_1_0.txt) or copy at
+# http://www.boost.org/LICENSE_1_0.txt)
+
+from BoostBuild import Tester
+
+tester = Tester()
+
+# test without giving the project an explicit id.
+tester.write("Jamroot", """
+    lib test : test.cpp ;
+    project : requirements <library>test ;
+    build-project a ;
+""")
+
+tester.write("test.cpp", """
+    #ifdef _WIN32
+        __declspec(dllexport)
+    #endif
+    void foo() {}
+""")
+
+tester.write("a/test1.cpp", """
+    int main() {}
+""")
+
+tester.write("a/Jamfile", """
+    exe test1 : test1.cpp ;
+""")
+
+tester.run_build_system()
+
+tester.expect_addition("bin/$toolset/debug/test.obj")
+tester.expect_addition("a/bin/$toolset/debug/test1.exe")
+
+tester.rm("bin")
+tester.rm("a/bin")
+
+# this time, do give the project an id.
+tester.write("Jamroot", """
+    lib test : test.cpp ;
+    project test_project : requirements <library>test ;
+    build-project a ;
+""")
+
+tester.run_build_system()
+
+tester.expect_addition("bin/$toolset/debug/test.obj")
+tester.expect_addition("a/bin/$toolset/debug/test1.exe")
+
+tester.cleanup()
diff --git a/test/test_all.py b/test/test_all.py
index 13e878498..b7f6c3da4 100644
--- a/test/test_all.py
+++ b/test/test_all.py
@@ -168,7 +168,8 @@ tests = [ "rebuilds",
           "remove_requirement",
           "free_features_request",
           "file_name_handling",
-          "sort_rule"
+          "sort_rule",
+          "inherited_dependency"
           ]
 
 if os.name == 'posix':