diff --git a/test/project-test2.py b/test/project-test2.py
new file mode 100644
index 000000000..16cf7e171
--- /dev/null
+++ b/test/project-test2.py
@@ -0,0 +1,55 @@
+#!/usr/bin/python
+
+from BoostBuild import Tester
+import os
+from string import strip
+
+t = Tester("--build-system=project-test2")
+t.set_tree("project-test2")
+
+
+t.run_build_system()
+print t.stdout()
+
+# Note that without this line the test would be brittle: it would silently
+# pass if those files were accicendally present in the original 'project-test2'
+# dir.
+t.expect_addition("bin/foo1")
+t.expect_addition("bin/foo2")
+t.expect_addition("dir/bin/foo1")
+
+if os.name == 'nt':
+    props = '" <variant>debug <optimization>off <rtti>on  "'
+else:
+    props = ' <variant>debug <optimization>off <rtti>on  \n'
+
+
+t.fail_test(strip(t.read("bin/foo1")) != strip(props))
+t.fail_test(strip(t.read("bin/foo2")) != strip(props))   
+
+# Now check that incompatible requirements for subproject are checked.
+
+t.copy("dir/Jamfile2", "dir/Jamfile")
+
+expected="""Requirements for project at 'dir' conflict with parent's.
+Explanation:  link-incompatible properties <threading>multi and
+<threading>single
+
+"""
+t.run_build_system(stdout=expected, status=None)
+
+
+# Check incompatible requirements on main target
+t.copy("dir/Jamfile3", "dir/Jamfile")
+
+expected="""Cannot satisfy request to build dir/foo1 with properties  <variant>debug
+<optimization>off <rtti>on
+Explanation: link-incompatible properties <rtti>on and <rtti>off
+
+"""
+
+t.run_build_system(stdout=expected, status=None)
+
+
+t.pass_test()
+
diff --git a/v2/test/project-test2.py b/v2/test/project-test2.py
new file mode 100644
index 000000000..16cf7e171
--- /dev/null
+++ b/v2/test/project-test2.py
@@ -0,0 +1,55 @@
+#!/usr/bin/python
+
+from BoostBuild import Tester
+import os
+from string import strip
+
+t = Tester("--build-system=project-test2")
+t.set_tree("project-test2")
+
+
+t.run_build_system()
+print t.stdout()
+
+# Note that without this line the test would be brittle: it would silently
+# pass if those files were accicendally present in the original 'project-test2'
+# dir.
+t.expect_addition("bin/foo1")
+t.expect_addition("bin/foo2")
+t.expect_addition("dir/bin/foo1")
+
+if os.name == 'nt':
+    props = '" <variant>debug <optimization>off <rtti>on  "'
+else:
+    props = ' <variant>debug <optimization>off <rtti>on  \n'
+
+
+t.fail_test(strip(t.read("bin/foo1")) != strip(props))
+t.fail_test(strip(t.read("bin/foo2")) != strip(props))   
+
+# Now check that incompatible requirements for subproject are checked.
+
+t.copy("dir/Jamfile2", "dir/Jamfile")
+
+expected="""Requirements for project at 'dir' conflict with parent's.
+Explanation:  link-incompatible properties <threading>multi and
+<threading>single
+
+"""
+t.run_build_system(stdout=expected, status=None)
+
+
+# Check incompatible requirements on main target
+t.copy("dir/Jamfile3", "dir/Jamfile")
+
+expected="""Cannot satisfy request to build dir/foo1 with properties  <variant>debug
+<optimization>off <rtti>on
+Explanation: link-incompatible properties <rtti>on and <rtti>off
+
+"""
+
+t.run_build_system(stdout=expected, status=None)
+
+
+t.pass_test()
+