diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/Client.scala b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/Client.scala
new file mode 100644
index 000000000..d80fd559e
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/Client.scala
@@ -0,0 +1,5 @@
+package macro
+
+object Client {
+	Provider.printTree(Provider.printTree(Foo.str))
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/Foo.scala b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/Foo.scala
new file mode 100644
index 000000000..1908f0673
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/Foo.scala
@@ -0,0 +1,5 @@
+package macro
+
+object Foo {
+  def str: String = "abc"
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/changes/Foo.scala b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/changes/Foo.scala
new file mode 100644
index 000000000..e3deb0f43
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-client/changes/Foo.scala
@@ -0,0 +1,3 @@
+package macro
+object Foo {
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-provider/Provider.scala b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-provider/Provider.scala
new file mode 100644
index 000000000..facc4a468
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/macro-provider/Provider.scala
@@ -0,0 +1,12 @@
+package macro
+import scala.language.experimental.macros
+import scala.reflect.macros._
+
+object Provider {
+	def printTree(arg: Any) = macro printTreeImpl
+	def printTreeImpl(c: Context)(arg: c.Expr[Any]): c.Expr[String] = {
+	  val argStr = arg.tree.toString
+	  val literalStr = c.universe.Literal(c.universe.Constant(argStr))
+	  c.Expr[String](literalStr)
+	}
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/project/build.scala b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/project/build.scala
new file mode 100644
index 000000000..a5382240f
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/project/build.scala
@@ -0,0 +1,29 @@
+import sbt._
+import Keys._
+
+object build extends Build {
+	val defaultSettings = Seq(
+		libraryDependencies <+= scalaVersion("org.scala-lang" % "scala-reflect" % _ ),
+		incOptions := incOptions.value.withNameHashing(true)
+	)
+
+	lazy val root = Project(
+	   base = file("."),
+	   id = "macro",
+	   aggregate = Seq(macroProvider, macroClient),
+	   settings = Defaults.defaultSettings ++ defaultSettings
+	)
+
+	lazy val macroProvider = Project(
+	   base = file("macro-provider"),
+	   id = "macro-provider",
+	   settings = Defaults.defaultSettings ++ defaultSettings
+	)
+
+	lazy val macroClient = Project(
+	   base = file("macro-client"),
+	   id = "macro-client",
+	   dependencies = Seq(macroProvider),
+	   settings = Defaults.defaultSettings ++ defaultSettings
+	)
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/test b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/test
new file mode 100644
index 000000000..231939418
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep-nested/test
@@ -0,0 +1,13 @@
+> compile
+
+# remove `Foo.str` which is an argument to a macro
+# (this macro itself that is an argument to another macro)
+$ copy-file macro-client/changes/Foo.scala macro-client/Foo.scala
+
+# we should recompile Foo.scala first and then fail to compile Client.scala due to missing
+# `Foo.str`
+-> macro-client/compile
+
+> clean
+
+-> compile
diff --git a/sbt/src/sbt-test/source-dependencies/macro-arg-dep/test b/sbt/src/sbt-test/source-dependencies/macro-arg-dep/test
index e6486db5e..183aa6c49 100644
--- a/sbt/src/sbt-test/source-dependencies/macro-arg-dep/test
+++ b/sbt/src/sbt-test/source-dependencies/macro-arg-dep/test
@@ -1,13 +1,10 @@
 > compile
 
-# remove `Foo.str` which is an argument to a macro that incremental compiler doesn't see in
-# Client.scala because macro has been already expanded
-
+# remove `Foo.str` which is an argument to a macro
 $ copy-file macro-client/changes/Foo.scala macro-client/Foo.scala
 
 # we should recompile Foo.scala first and then fail to compile Client.scala due to missing
-# `Foo.str`; however recompilation of Client.scala is never triggered due to missing
-# dependency
+# `Foo.str`
 -> macro-client/compile
 
 > clean