diff --git a/new/targets.jam b/new/targets.jam
index a55b41a9e..196944ba7 100644
--- a/new/targets.jam
+++ b/new/targets.jam
@@ -261,12 +261,12 @@ rule basic-target ( name : project
     rule generate-source ( source : properties * )
     {
         # Separate target name from properties override
-        local split = [ MATCH "([^<]*)(/<.*)?" : $(source) ] ;
+        local split = [ MATCH "^([^<]*)(/(<.*))?$" : $(source) ] ;
         local id = $(split[1]) ;
         local sproperties = ;
-        if $(split[2])
+        if $(split[3])
         {
-            sproperties = [ property.make [ feature.split $(split[2]) ] ] ;
+            sproperties = [ property.make [ feature.split $(split[3]) ] ] ;
         }
 
         # Check if such target exists
diff --git a/test/project-test4/Jamfile b/test/project-test4/Jamfile
new file mode 100644
index 000000000..d8a22032d
--- /dev/null
+++ b/test/project-test4/Jamfile
@@ -0,0 +1,3 @@
+
+make a.exe : a.obj lib/b.obj/<optimization>on : yfc-link ;
+make a.obj : a.cpp : yfc-compile ;
diff --git a/test/project-test4/a.cpp b/test/project-test4/a.cpp
new file mode 100644
index 000000000..e69de29bb
diff --git a/test/project-test4/lib/Jamfile b/test/project-test4/lib/Jamfile
new file mode 100644
index 000000000..be2c3649a
--- /dev/null
+++ b/test/project-test4/lib/Jamfile
@@ -0,0 +1,2 @@
+
+make b.obj : b.cpp : yfc-compile ;
diff --git a/test/project-test4/lib/b.cpp b/test/project-test4/lib/b.cpp
new file mode 100644
index 000000000..e69de29bb
diff --git a/test/project-test4/project-root.jam b/test/project-test4/project-root.jam
new file mode 100644
index 000000000..a6f85e166
--- /dev/null
+++ b/test/project-test4/project-root.jam
@@ -0,0 +1,27 @@
+
+import property ;
+
+rule yfc-compile ( target : sources * : property-set * )
+{
+    PROPERTIES on $(target) = [ property.as-path $(property-set) ] ;
+}
+
+actions yfc-compile
+{
+    echo $(PROPERTIES) > $(<)
+    echo $(>) >> $(<)
+}
+
+rule yfc-link ( target : sources * : property-set * )
+{
+    PROPERTIES on $(target) = [ property.as-path $(property-set) ] ;
+}
+
+actions yfc-link
+{
+    echo $(PROPERTIES) > $(<)
+    echo $(>) >> $(<)
+}
+
+
+IMPORT $(__name__) : yfc-compile yfc-link : : yfc-compile yfc-link ;
diff --git a/test/project-test4/readme.txt b/test/project-test4/readme.txt
new file mode 100644
index 000000000..ec68724af
--- /dev/null
+++ b/test/project-test4/readme.txt
@@ -0,0 +1,2 @@
+
+This test checks for correct properties of generated and used targets.
\ No newline at end of file
diff --git a/test/project_test4.py b/test/project_test4.py
new file mode 100644
index 000000000..ec6595db5
--- /dev/null
+++ b/test/project_test4.py
@@ -0,0 +1,32 @@
+#!/usr/bin/python
+
+from BoostBuild import Tester
+import os
+from string import strip
+
+t = Tester()
+
+
+t.set_tree("project-test4")
+
+t.run_build_system()
+
+t.expect_addition("bin/gcc/debug/threading-single/a.obj")
+t.expect_content("bin/gcc/debug/threading-single/a.obj",
+"""gcc/debug/threading-single
+a.cpp
+""")
+
+t.expect_addition("bin/gcc/debug/threading-single/a.exe")
+t.expect_content("bin/gcc/debug/threading-single/a.exe",
+"gcc/debug/threading-single\n" +
+"bin/gcc/debug/threading-single/a.obj lib/bin/gcc/debug/optimization-on/threading-single/b.obj\n"
+)
+
+t.expect_addition("lib/bin/gcc/debug/optimization-on/threading-single/b.obj")
+t.expect_content("lib/bin/gcc/debug/optimization-on/threading-single/b.obj",
+"""gcc/debug/optimization-on/threading-single
+lib/b.cpp
+""")
+
+os.chdir(t.original_workdir)
\ No newline at end of file
diff --git a/test/test_all.py b/test/test_all.py
index 8a91a40d2..99644baa9 100644
--- a/test/test_all.py
+++ b/test/test_all.py
@@ -17,4 +17,5 @@ import startup_v1
 import startup_v2
 import project_test1
 import project_test2
-import project_test3
\ No newline at end of file
+import project_test3
+import project_test4
diff --git a/v2/build/targets.jam b/v2/build/targets.jam
index a55b41a9e..196944ba7 100644
--- a/v2/build/targets.jam
+++ b/v2/build/targets.jam
@@ -261,12 +261,12 @@ rule basic-target ( name : project
     rule generate-source ( source : properties * )
     {
         # Separate target name from properties override
-        local split = [ MATCH "([^<]*)(/<.*)?" : $(source) ] ;
+        local split = [ MATCH "^([^<]*)(/(<.*))?$" : $(source) ] ;
         local id = $(split[1]) ;
         local sproperties = ;
-        if $(split[2])
+        if $(split[3])
         {
-            sproperties = [ property.make [ feature.split $(split[2]) ] ] ;
+            sproperties = [ property.make [ feature.split $(split[3]) ] ] ;
         }
 
         # Check if such target exists
diff --git a/v2/test/project-test4/Jamfile b/v2/test/project-test4/Jamfile
new file mode 100644
index 000000000..d8a22032d
--- /dev/null
+++ b/v2/test/project-test4/Jamfile
@@ -0,0 +1,3 @@
+
+make a.exe : a.obj lib/b.obj/<optimization>on : yfc-link ;
+make a.obj : a.cpp : yfc-compile ;
diff --git a/v2/test/project-test4/a.cpp b/v2/test/project-test4/a.cpp
new file mode 100644
index 000000000..e69de29bb
diff --git a/v2/test/project-test4/lib/Jamfile b/v2/test/project-test4/lib/Jamfile
new file mode 100644
index 000000000..be2c3649a
--- /dev/null
+++ b/v2/test/project-test4/lib/Jamfile
@@ -0,0 +1,2 @@
+
+make b.obj : b.cpp : yfc-compile ;
diff --git a/v2/test/project-test4/lib/b.cpp b/v2/test/project-test4/lib/b.cpp
new file mode 100644
index 000000000..e69de29bb
diff --git a/v2/test/project-test4/project-root.jam b/v2/test/project-test4/project-root.jam
new file mode 100644
index 000000000..a6f85e166
--- /dev/null
+++ b/v2/test/project-test4/project-root.jam
@@ -0,0 +1,27 @@
+
+import property ;
+
+rule yfc-compile ( target : sources * : property-set * )
+{
+    PROPERTIES on $(target) = [ property.as-path $(property-set) ] ;
+}
+
+actions yfc-compile
+{
+    echo $(PROPERTIES) > $(<)
+    echo $(>) >> $(<)
+}
+
+rule yfc-link ( target : sources * : property-set * )
+{
+    PROPERTIES on $(target) = [ property.as-path $(property-set) ] ;
+}
+
+actions yfc-link
+{
+    echo $(PROPERTIES) > $(<)
+    echo $(>) >> $(<)
+}
+
+
+IMPORT $(__name__) : yfc-compile yfc-link : : yfc-compile yfc-link ;
diff --git a/v2/test/project-test4/readme.txt b/v2/test/project-test4/readme.txt
new file mode 100644
index 000000000..ec68724af
--- /dev/null
+++ b/v2/test/project-test4/readme.txt
@@ -0,0 +1,2 @@
+
+This test checks for correct properties of generated and used targets.
\ No newline at end of file
diff --git a/v2/test/project_test4.py b/v2/test/project_test4.py
new file mode 100644
index 000000000..ec6595db5
--- /dev/null
+++ b/v2/test/project_test4.py
@@ -0,0 +1,32 @@
+#!/usr/bin/python
+
+from BoostBuild import Tester
+import os
+from string import strip
+
+t = Tester()
+
+
+t.set_tree("project-test4")
+
+t.run_build_system()
+
+t.expect_addition("bin/gcc/debug/threading-single/a.obj")
+t.expect_content("bin/gcc/debug/threading-single/a.obj",
+"""gcc/debug/threading-single
+a.cpp
+""")
+
+t.expect_addition("bin/gcc/debug/threading-single/a.exe")
+t.expect_content("bin/gcc/debug/threading-single/a.exe",
+"gcc/debug/threading-single\n" +
+"bin/gcc/debug/threading-single/a.obj lib/bin/gcc/debug/optimization-on/threading-single/b.obj\n"
+)
+
+t.expect_addition("lib/bin/gcc/debug/optimization-on/threading-single/b.obj")
+t.expect_content("lib/bin/gcc/debug/optimization-on/threading-single/b.obj",
+"""gcc/debug/optimization-on/threading-single
+lib/b.cpp
+""")
+
+os.chdir(t.original_workdir)
\ No newline at end of file
diff --git a/v2/test/test_all.py b/v2/test/test_all.py
index 8a91a40d2..99644baa9 100644
--- a/v2/test/test_all.py
+++ b/v2/test/test_all.py
@@ -17,4 +17,5 @@ import startup_v1
 import startup_v2
 import project_test1
 import project_test2
-import project_test3
\ No newline at end of file
+import project_test3
+import project_test4