diff --git a/v2/build/toolset.jam b/v2/build/toolset.jam
index 762a1f55e..dd5936be4 100644
--- a/v2/build/toolset.jam
+++ b/v2/build/toolset.jam
@@ -11,6 +11,7 @@ import errors : error ;
 import property ;
 import path ;
 import generators ;
+import set : difference ;
 
 .flag-no = 1 ;
 
@@ -288,29 +289,38 @@ rule inherit-generators ( toolset : base )
     }    
 }
 
-rule inherit-flags ( toolset : base )
+# properties listed in prohibited-properties won't
+# be inherited. Note that <debug-symbols>on and
+# <debug-symbols>off are two different properties
+rule inherit-flags ( toolset : base : prohibited-properties * )
 {
     for local f in $(.module-flags.$(base))
     {        
         local rule-or-module = $(.rule-or-module.$(f)) ; 
-        local rule_ = [ MATCH "[^.]*\.(.*)" : $(rule-or-module) ] ;
-        local new-rule-or-module ;
-        if $(rule_)
+        if [ set.difference
+                $(.$(rule-or-module).condition.$(f)) :
+                $(prohibited-properties)
+           ]
         {
-            new-rule-or-module = $(toolset).$(rule_) ;
-        }
-        else
-        {
-            new-rule-or-module = $(toolset) ;
-        }
+            local rule_ = [ MATCH "[^.]*\.(.*)" : $(rule-or-module) ] ;
+            local new-rule-or-module ;
+            if $(rule_)
+            {
+                new-rule-or-module = $(toolset).$(rule_) ;
+            }
+            else
+            {
+                new-rule-or-module = $(toolset) ;
+            }
                                         
-        add-flag
-           $(new-rule-or-module)
-           : $(.$(rule-or-module).match-type.$(f))
-           : $(.$(rule-or-module).variable.$(f)) 
-           : $(.$(rule-or-module).condition.$(f))              
-           : $(.$(rule-or-module).values.$(f))
-           ;
+            add-flag
+               $(new-rule-or-module)
+               : $(.$(rule-or-module).match-type.$(f))
+               : $(.$(rule-or-module).variable.$(f)) 
+               : $(.$(rule-or-module).condition.$(f))              
+               : $(.$(rule-or-module).values.$(f))
+               ;
+        }
     }            
 }
 
diff --git a/v2/build/type.jam b/v2/build/type.jam
index 4ccc20438..6bd2ec6e6 100644
--- a/v2/build/type.jam
+++ b/v2/build/type.jam
@@ -107,7 +107,7 @@ rule type-from-rule-name ( main-target-name )
 # Specifies that targets with suffix from 'suffixes' has the type 'type'. 
 # If different type is already specified for any of syffixes,
 # issues an error.
-local rule register-suffixes ( suffixes + : type )
+rule register-suffixes ( suffixes + : type )
 {
     for local s in $(suffixes)
     {        
diff --git a/v2/test/BoostBuild.py b/v2/test/BoostBuild.py
index f4f77948a..588848043 100644
--- a/v2/test/BoostBuild.py
+++ b/v2/test/BoostBuild.py
@@ -31,6 +31,9 @@ def prepare_suffix_map(toolset):
         if toolset in ["gcc"]:
             suffixes['.lib'] = '.a' # static libs have '.a' suffix with mingw...
             suffixes['.obj'] = '.o'
+    if os.uname()[0] == 'Darwin':
+        suffixes['.dll'] = '.dylib'
+
         
     
     
@@ -90,6 +93,8 @@ class Tester(TestCmd.TestCmd):
                 jam_build_dir = "bin.linuxx86"
             elif os.uname()[0] == 'SunOS':
                 jam_build_dir = "bin.solaris"
+            elif os.uname()[0] == 'Darwin':
+                jam_build_dir = "bin.macosxppc"
             else:
                 raise "Don't know directory where jam is build for this system: " + os.name + "/" + os.uname()[0]
         else:
diff --git a/v2/test/prebuilt.py b/v2/test/prebuilt.py
index 6cf734db5..5f367eb56 100644
--- a/v2/test/prebuilt.py
+++ b/v2/test/prebuilt.py
@@ -7,6 +7,8 @@ t = Tester()
 
 t.set_tree('prebuilt')
 
+t.expand_toolset("ext/project-root.jam")
+t.expand_toolset("project-root.jam")
 # First, build the external project
 t.run_build_system("debug release", subdir="ext")
 
diff --git a/v2/test/prebuilt/ext/Jamfile2 b/v2/test/prebuilt/ext/Jamfile2
index 0fcc301e7..f116f81cd 100644
--- a/v2/test/prebuilt/ext/Jamfile2
+++ b/v2/test/prebuilt/ext/Jamfile2
@@ -13,7 +13,10 @@ if [ modules.peek : OS ] in CYGWIN NT
       dll-suffix = lib ;
    }
 }
-
+if $toolset = darwin
+{
+   dll-suffix = dylib ;
+}
 
 project ext ;
 
@@ -28,4 +31,4 @@ lib a :
     :
     : <include>release
     ;
-    
\ No newline at end of file
+    
diff --git a/v2/test/prebuilt/ext/Jamfile3 b/v2/test/prebuilt/ext/Jamfile3
index c3aff784f..c4d9a4201 100644
--- a/v2/test/prebuilt/ext/Jamfile3
+++ b/v2/test/prebuilt/ext/Jamfile3
@@ -17,6 +17,11 @@ if [ modules.peek : OS ] in CYGWIN NT
       dll-suffix = lib ;
    }
 }
+if $toolset = darwin
+{
+   dll-suffix = dylib ;
+}
+
 
 
 project ext ;
@@ -35,4 +40,4 @@ lib a :
     :
     : <include>release
     ;
-    
\ No newline at end of file
+    
diff --git a/v2/test/prebuilt/ext/project-root.jam b/v2/test/prebuilt/ext/project-root.jam
index be01ebeeb..1abafda7d 100644
--- a/v2/test/prebuilt/ext/project-root.jam
+++ b/v2/test/prebuilt/ext/project-root.jam
@@ -1,2 +1,2 @@
 
-import gcc ;
\ No newline at end of file
+import $toolset ;
diff --git a/v2/test/prebuilt/project-root.jam b/v2/test/prebuilt/project-root.jam
index be01ebeeb..1abafda7d 100644
--- a/v2/test/prebuilt/project-root.jam
+++ b/v2/test/prebuilt/project-root.jam
@@ -1,2 +1,2 @@
 
-import gcc ;
\ No newline at end of file
+import $toolset ;
diff --git a/v2/tools/darwin.jam b/v2/tools/darwin.jam
index af8225034..eedff4492 100644
--- a/v2/tools/darwin.jam
+++ b/v2/tools/darwin.jam
@@ -12,7 +12,14 @@ import toolset : flags ;
 import type ;
 
 toolset.register darwin ;
-toolset.inherit darwin : gcc ;
+import gcc ;
+toolset.inherit-generators darwin : gcc ;
+# we can't pass -s to ld unless we also pass -static
+# so we removed -s completly from OPTIONS and add it
+# to ST_OPTIONS
+toolset.inherit-flags darwin : gcc : <debug-symbols>off ;
+toolset.inherit-rules darwin : gcc ;
+flags darwin.link ST_OPTIONS <debug-symbols>off : -s ;
 
 # No additional initialization should be necessary
 rule init ( )
@@ -22,6 +29,8 @@ rule init ( )
 
 # Darwin has a different shared library suffix
 type.set-generated-target-suffix SHARED_LIB : <toolset>darwin : dylib ;
+# we need to be able to tell the type of .dylib files
+type.register-suffixes dylib : SHARED_LIB ;
 
 feature framework : : free ;
 
@@ -37,7 +46,7 @@ flags darwin.link FRAMEWORK <framework> ;
 
 actions link bind LIBRARIES
 {
-    $(NAME:E=g++) $(OPTIONS) -L"$(LINKPATH)" -o "$(<)" "$(>)" "$(LIBRARIES)" -l$(FINDLIBS-SA) -l$(FINDLIBS-ST) -framework$(_)$(FRAMEWORK)    
+    $(NAME:E=g++) $(ST_OPTIONS) $(OPTIONS) -L"$(LINKPATH)" -o "$(<)" "$(>)" "$(LIBRARIES)" -l$(FINDLIBS-SA) -l$(FINDLIBS-ST) -framework$(_)$(FRAMEWORK)    
 }
 
 rule link.dll
@@ -47,11 +56,11 @@ rule link.dll
 
 actions link.dll bind LIBRARIES
 {
-    $(NAME:E=g++) -dynamiclib $(OPTIONS) -o "$(<)" "$(>)" "$(LIBRARIES)" -l$(FINDLIBS-SA) -l$(FINDLIBS-ST) -framework$(_)$(FRAMEWORK)    
+    $(NAME:E=g++) -dynamiclib $(OPTIONS) -L"$(LINKPATH)" -o "$(<)" "$(>)" "$(LIBRARIES)" -l$(FINDLIBS-SA) -l$(FINDLIBS-ST) -framework$(_)$(FRAMEWORK) 
 }
 
 actions piecemeal archive
 {
-    ar -r -s $(ARFLAGS) "$(<:T)" "$(>:T)"
+    ar -c -r -s $(ARFLAGS) "$(<:T)" "$(>:T)"
 }