diff --git a/v2/test/dll_path.py b/v2/test/dll_path.py
new file mode 100644
index 000000000..0d979f17f
--- /dev/null
+++ b/v2/test/dll_path.py
@@ -0,0 +1,128 @@
+#!/usr/bin/python
+
+#  Copyright (C) Vladimir Prus 2003. Permission to copy, use, modify, sell and
+#  distribute this software is granted provided this copyright notice appears in
+#  all copies. This software is provided "as is" without express or implied
+#  warranty, and with no claim as to its suitability for any purpose.
+
+#  Test that the <dll-path> property is correctly set when using
+#  <hardcode-dll-paths>true.
+from BoostBuild import Tester, List
+from string import find
+
+
+t = Tester()
+
+# The point of this test is to have exe "main" which uses library "b",
+# which uses library "a". When "main" is built with <hardcode-dll-paths>true,
+# paths to both libraries should be present as values of <dll-path> feature.
+# We create a special target type which reports <dll-path> values on its sources
+# and compare the list of found values with out expectations.
+
+t.write("Jamfile", """ 
+exe main : main.cpp b//b ;
+explicit main ;
+
+path-list mp : main ; 
+""")
+
+t.write("main.cpp", """ 
+int main() { return 0; }
+
+""")
+
+t.write("project-root.jam", """ 
+using dll-paths ; 
+""")
+
+t.write("dll-paths.jam", """ 
+import type ;
+import generators ;
+import feature ;
+import sequence ;
+import print ;
+import "class" : new ;
+
+rule init ( ) 
+{ 
+    type.register PATH_LIST : pathlist : : main ;
+    
+    class dll-paths-list-generator : generator 
+    {
+        rule __init__ ( )
+        {
+            generator.__init__ dll-paths.list : EXE : PATH_LIST ;
+        }
+        
+        rule generated-targets ( sources + : property-set : project name ? )        
+        {
+            local dll-paths ;
+            for local s in $(sources)
+            {
+                local a = [ $(s).action ] ;
+                if $(a)
+                {
+                    local p = [ $(a).properties ] ;
+                    dll-paths += [ $(p).get <dll-path> ] ;
+                }                                                
+            }
+            return [ generator.generated-targets $(sources) 
+              : [ $(property-set).add-raw $(dll-paths:G=<dll-path>) ] : $(project) $(name) ] ;
+            
+        }
+    }
+    generators.register [ new dll-paths-list-generator ] ;
+    
+}
+
+rule list ( target : sources * : properties * )
+{
+    local paths = [ feature.get-values <dll-path> : $(properties) ] ;
+    paths = [ sequence.insertion-sort $(paths) ] ;
+    print.output $(target) ;
+    print.text $(paths) ;
+}
+
+""")
+
+t.write("a/a.cpp", """ 
+void
+#if defined(_WIN32)
+__declspec(dllexport)
+#endif
+foo() {}
+
+
+""")
+
+t.write("a/Jamfile", """ 
+lib a : a.cpp ; 
+""")
+
+t.write("b/b.cpp", """ 
+void
+#if defined(_WIN32)
+__declspec(dllexport)
+#endif
+bar() {}
+
+
+""")
+
+t.write("b/Jamfile", """ 
+lib b : b.cpp ../a//a ; 
+""")
+
+t.run_build_system("hardcode-dll-paths=true")
+
+t.expect_addition("bin/$toolset/debug/mp.pathlist")
+
+es1 = t.adjust_names(["a/bin/$toolset/debug"])[0]
+es2 = t.adjust_names(["b/bin/$toolset/debug"])[0]
+content = t.read("bin/$toolset/debug/mp.pathlist")
+
+t.fail_test(find(content, es1) == -1)
+t.fail_test(find(content, es2) == -1)
+
+t.cleanup()
+
diff --git a/v2/test/test_all.py b/v2/test/test_all.py
index 5fd20e80c..6cc9ef6fe 100644
--- a/v2/test/test_all.py
+++ b/v2/test/test_all.py
@@ -108,6 +108,7 @@ tests = [ "project_test1",
           "glob",
           "project_root_constants",
           "double_loading",
+          "dll_path",
 	  ]
 
 if os.name == 'posix':
diff --git a/v2/tools/builtin.jam b/v2/tools/builtin.jam
index 4b900659b..2ac9854de 100644
--- a/v2/tools/builtin.jam
+++ b/v2/tools/builtin.jam
@@ -460,9 +460,17 @@ class lib-target-class : basic-target
             {
                 result = [ $(result).add 
                   [ property-set.create $(paths:G=<dll-path>) ] ] ;
-            }            
+            }                                    
         }
-                
+        
+        # Pass <dll-path> features that we've got from sources.
+        if <hardcode-dll-paths>true in $(raw)
+        {
+            local u = [ $(subvariant).sources-usage-requirements ] ;
+            local values = [ $(u).get <dll-path> ] ;
+            result = [ $(result).add-raw $(values:G=<dll-path>) ] ;
+        }
+                        
         return $(result) ;
     }