diff --git a/api.specification b/api.specification
index b4d177b66..210bc07e3 100644
--- a/api.specification
+++ b/api.specification
@@ -234,6 +234,7 @@ Modifiers
 	isImplicit: Boolean
 	isLazy: Boolean
 	isSynthetic: Boolean
+	isMacro: Boolean
 }}}
 
 {{{
diff --git a/compile/api/APIUtil.scala b/compile/api/APIUtil.scala
index 4a7c800a2..c05db8bfa 100644
--- a/compile/api/APIUtil.scala
+++ b/compile/api/APIUtil.scala
@@ -9,11 +9,11 @@ object APIUtil
 	val modifiersToByte = (m: Modifiers) => {
 			import m._
 		def x(b: Boolean, bit: Int) = if(b) 1 << bit else 0
-		( x(isAbstract, 0) | x(isOverride, 1) | x(isFinal, 2) | x(isSealed, 3) | x(isImplicit, 4) | x(isLazy, 5) ).toByte
+		( x(isAbstract, 0) | x(isOverride, 1) | x(isFinal, 2) | x(isSealed, 3) | x(isImplicit, 4) | x(isLazy, 5) | x(isMacro, 6) ).toByte
 	}
 	val byteToModifiers = (b: Byte) => {
 		def x(bit: Int) = (b & (1 << bit)) != 0
-		new Modifiers( x(0), x(1), x(2), x(3), x(4), x(5) )
+		new Modifiers( x(0), x(1), x(2), x(3), x(4), x(5), x(6) )
 	}
 
 	def verifyTypeParameters(s: SourceAPI): Boolean =
@@ -43,6 +43,25 @@ object APIUtil
 			super.visitParameterRef(ref)
 		}
 	}
+
+	def hasMacro(s: SourceAPI): Boolean =
+	{
+		val check = new HasMacro
+		check.visitAPI(s)
+		check.hasMacro
+	}
+
+	private[this] class HasMacro extends Visit
+	{
+		var hasMacro = false
+
+		override def visitModifiers(m: Modifiers)
+		{
+			hasMacro ||= m.isMacro
+			super.visitModifiers(m)
+		}
+	}
+
 	def minimize(api: SourceAPI): SourceAPI =
 		new SourceAPI(api.packages, minimizeDefinitions(api.definitions))
 	def minimizeDefinitions(ds: Array[Definition]): Array[Definition] =
diff --git a/compile/api/ClassToAPI.scala b/compile/api/ClassToAPI.scala
index 07366e71c..10c863361 100644
--- a/compile/api/ClassToAPI.scala
+++ b/compile/api/ClassToAPI.scala
@@ -166,7 +166,7 @@ object ClassToAPI
 	def modifiers(i: Int): api.Modifiers =
 	{
 		import Modifier.{isAbstract, isFinal}
-		new api.Modifiers( isAbstract(i), false, isFinal(i), false, false, false)
+		new api.Modifiers( isAbstract(i), false, isFinal(i), false, false, false, false)
 	}
 	def access(i: Int, pkg: Option[String]): api.Access =
 	{
diff --git a/compile/api/SameAPI.scala b/compile/api/SameAPI.scala
index e9fff1962..7ace3cfbd 100644
--- a/compile/api/SameAPI.scala
+++ b/compile/api/SameAPI.scala
@@ -43,7 +43,9 @@ object TopLevel
 /** Checks the API of two source files for equality.*/
 object SameAPI
 {
-	def apply(a: Source, b: Source): Boolean = a.apiHash == b.apiHash && (a.hash.length > 0 && b.hash.length > 0) && apply(a.api, b.api)
+	def apply(a: Source, b: Source): Boolean =
+		a.apiHash == b.apiHash && (a.hash.length > 0 && b.hash.length > 0) && apply(a.api, b.api)
+
 	def apply(a: SourceAPI, b: SourceAPI): Boolean =
 	{
 		val start = System.currentTimeMillis
@@ -208,6 +210,7 @@ class SameAPI(tagsA: TypeVars, tagsB: TypeVars, includePrivate: Boolean, include
 		setIf(bs, isSealed, 3)
 		setIf(bs, isImplicit, 4)
 		setIf(bs, isLazy, 5)
+		setIf(bs, isMacro, 6)
 		bs.toImmutable
 	}
 	def setIf(bs: mutable.BitSet, flag: Boolean, i: Int): Unit =
diff --git a/compile/inc/APIs.scala b/compile/inc/APIs.scala
index 5ff893f79..451aaf2ec 100644
--- a/compile/inc/APIs.scala
+++ b/compile/inc/APIs.scala
@@ -38,7 +38,7 @@ object APIs
 	
 	val emptyAPI = new xsbti.api.SourceAPI(Array(), Array())
 	val emptyCompilation = new xsbti.api.Compilation(-1, "")
-	val emptySource = new xsbti.api.Source(emptyCompilation, Array(), emptyAPI, 0)
+	val emptySource = new xsbti.api.Source(emptyCompilation, Array(), emptyAPI, 0, false)
 	def getAPI[T](map: Map[T, Source], src: T): Source = map.getOrElse(src, emptySource)
 }
 
diff --git a/compile/inc/Compile.scala b/compile/inc/Compile.scala
index 02bf7ddc3..8baa39426 100644
--- a/compile/inc/Compile.scala
+++ b/compile/inc/Compile.scala
@@ -52,6 +52,8 @@ private final class AnalysisCallback(internalMap: File => Option[File], external
 	private[this] val sourceDeps = new HashMap[File, Set[File]]
 	private[this] val extSrcDeps = new ListBuffer[(File, String, Source)]
 	private[this] val binaryClassName = new HashMap[File, String]
+		 // source files containing a macro def.
+	private[this] val macroSources = Set[File]()
 
 	private def add[A,B](map: Map[A,Set[B]], a: A, b: B): Unit =
 		map.getOrElseUpdate(a, new HashSet[B]) += b
@@ -99,7 +101,12 @@ private final class AnalysisCallback(internalMap: File => Option[File], external
 		classToSource.put(module, source)
 	}
 	
-	def api(sourceFile: File, source: SourceAPI) { apis(sourceFile) = (xsbt.api.HashAPI(source), xsbt.api.APIUtil.minimize(source)) }
+	def api(sourceFile: File, source: SourceAPI) {
+		import xsbt.api.{APIUtil, HashAPI}
+		if (APIUtil.hasMacro(source)) macroSources += sourceFile
+		apis(sourceFile) = (HashAPI(source), APIUtil.minimize(source))
+	}
+
 	def endSource(sourcePath: File): Unit =
 		assert(apis.contains(sourcePath))
 	
@@ -110,7 +117,9 @@ private final class AnalysisCallback(internalMap: File => Option[File], external
 		(base /: apis) { case (a, (src, api) ) =>
 			val stamp = current.internalSource(src)
 			val hash = stamp match { case h: Hash => h.value; case _ => new Array[Byte](0) }
-			val s = new xsbti.api.Source(compilation, hash, api._2, api._1)
+			// TODO store this in Relations, rather than Source.
+			val hasMacro: Boolean = macroSources.contains(src)
+			val s = new xsbti.api.Source(compilation, hash, api._2, api._1, hasMacro)
 			a.addSource(src, s, stamp, sourceDeps.getOrElse(src, Nil: Iterable[File]))
 		}
 	def addExternals(base: Analysis): Analysis = (base /: extSrcDeps) { case (a, (source, name, api)) => a.addExternalDep(source, name, api) }
diff --git a/compile/inc/Incremental.scala b/compile/inc/Incremental.scala
index 211db2ce1..4c35b6b6a 100644
--- a/compile/inc/Incremental.scala
+++ b/compile/inc/Incremental.scala
@@ -59,7 +59,12 @@ object Incremental
 
 		new APIChanges(modifiedAPIs, changedNames)
 	}
-	def sameSource(a: Source, b: Source): Boolean  =  shortcutSameSource(a, b) || SameAPI(a,b)
+	def sameSource(a: Source, b: Source): Boolean = {
+		// Clients of a modified source file (ie, one that doesn't satisfy `shortcutSameSource`) containing macros must be recompiled.
+		val hasMacro = a.hasMacro || b.hasMacro
+		shortcutSameSource(a, b) || (!hasMacro && SameAPI(a,b))
+	}
+
 	def shortcutSameSource(a: Source, b: Source): Boolean  =  !a.hash.isEmpty && !b.hash.isEmpty && sameCompilation(a.compilation, b.compilation) && (a.hash deepEquals b.hash)
 	def sameCompilation(a: Compilation, b: Compilation): Boolean  =  a.startTime == b.startTime && a.target == b.target
 
diff --git a/compile/interface/API.scala b/compile/interface/API.scala
index 7e3b39ac9..3c174201f 100644
--- a/compile/interface/API.scala
+++ b/compile/interface/API.scala
@@ -275,7 +275,7 @@ final class API(val global: Global, val callback: xsbti.AnalysisCallback) extend
 	{
 		import Flags._
 		new xsbti.api.Modifiers(s.hasFlag(ABSTRACT) || s.hasFlag(DEFERRED), s.hasFlag(OVERRIDE),
-			s.isFinal, s.hasFlag(SEALED), isImplicit(s), s.hasFlag(LAZY))
+			s.isFinal, s.hasFlag(SEALED), isImplicit(s), s.hasFlag(LAZY), hasMacro(s))
 	}
 
 	private def isImplicit(s: Symbol) = s.hasFlag(Flags.IMPLICIT)
diff --git a/compile/interface/Analyzer.scala b/compile/interface/Analyzer.scala
index b4d2dd65d..32c79d764 100644
--- a/compile/interface/Analyzer.scala
+++ b/compile/interface/Analyzer.scala
@@ -130,12 +130,21 @@ abstract class Compat
 		def LOCALCHILD = sourceCompatibilityOnly
 
 		def NullaryMethodType = NullaryMethodTpe
+
+		def MACRO = DummyValue
 	}
 	// in 2.9, NullaryMethodType was added to Type
 	object NullaryMethodTpe {
 		def unapply(t: Type): Option[Type] = None
 	}
 
+	val DummyValue = 0
+	def hasMacro(s: Symbol): Boolean =
+	{
+		val MACRO = Flags.MACRO // will be DummyValue for versions before 2.10
+	  MACRO != DummyValue && s.hasFlag(MACRO)
+	}
+
 	private[this] def sourceCompatibilityOnly: Nothing = throw new RuntimeException("For source compatibility only: should not get here.")
 
 	private[this] final implicit def miscCompat(n: AnyRef): MiscCompat = new MiscCompat
diff --git a/interface/other b/interface/other
index 993c9d4f6..aeec1ae5a 100644
--- a/interface/other
+++ b/interface/other
@@ -3,6 +3,7 @@ Source
 	hash: Byte*
 	api: SourceAPI
 	apiHash: Int
+	hasMacro: Boolean
 
 SourceAPI
 	packages : Package*
diff --git a/interface/src/main/java/xsbti/api/Modifiers.java b/interface/src/main/java/xsbti/api/Modifiers.java
index 14737be57..575879608 100644
--- a/interface/src/main/java/xsbti/api/Modifiers.java
+++ b/interface/src/main/java/xsbti/api/Modifiers.java
@@ -8,13 +8,14 @@ public final class Modifiers implements java.io.Serializable
 	private static final int SealedBit = 3;
 	private static final int ImplicitBit = 4;
 	private static final int LazyBit = 5;
+	private static final int MacroBit = 6;
 
 	private static final int flag(boolean set, int bit)
 	{
 		return set ? (1 << bit) : 0;
 	}
 
-	public Modifiers(boolean isAbstract, boolean isOverride, boolean isFinal, boolean isSealed, boolean isImplicit, boolean isLazy)
+	public Modifiers(boolean isAbstract, boolean isOverride, boolean isFinal, boolean isSealed, boolean isImplicit, boolean isLazy, boolean isMacro)
 	{
 		this.flags = (byte)(
 			flag(isAbstract, AbstractBit) |
@@ -22,7 +23,8 @@ public final class Modifiers implements java.io.Serializable
 			flag(isFinal, FinalBit) |
 			flag(isSealed, SealedBit) |
 			flag(isImplicit, ImplicitBit) |
-			flag(isLazy, LazyBit)
+			flag(isLazy, LazyBit) |
+			flag(isMacro, MacroBit)
 		);
 	}
 
@@ -62,8 +64,12 @@ public final class Modifiers implements java.io.Serializable
 	{
 		return flag(LazyBit);
 	}
+	public final boolean isMacro()
+	{
+		return flag(MacroBit);
+	}
 	public String toString()
 	{
-		return "Modifiers(" + "isAbstract: " + isAbstract() + ", " + "isOverride: " + isOverride() + ", " + "isFinal: " + isFinal() + ", " + "isSealed: " + isSealed() + ", " + "isImplicit: " + isImplicit() + ", " + "isLazy: " + isLazy()+ ")";
+		return "Modifiers(" + "isAbstract: " + isAbstract() + ", " + "isOverride: " + isOverride() + ", " + "isFinal: " + isFinal() + ", " + "isSealed: " + isSealed() + ", " + "isImplicit: " + isImplicit() + ", " + "isLazy: " + isLazy() + ", " + "isMacro: " + isMacro()+ ")";
 	}
 }
diff --git a/project/Sbt.scala b/project/Sbt.scala
index a4e93d5af..f3a48ab52 100644
--- a/project/Sbt.scala
+++ b/project/Sbt.scala
@@ -143,7 +143,8 @@ object Sbt extends Build
 			val loader = classpath.ClasspathUtilities.toLoader(scriptedSbtClasspath.files, scriptedSbtInstance.loader)
 			val m = ModuleUtilities.getObject("sbt.test.ScriptedTests", loader)
 			val r = m.getClass.getMethod("run", classOf[File], classOf[Boolean], classOf[String], classOf[String], classOf[String], classOf[Array[String]], classOf[File], classOf[Array[String]])
-			try { r.invoke(m, sourcePath, true: java.lang.Boolean, v, sv, ssv, args.toArray[String], launcher, Array[String]()) }
+			val launcherVmOptions = Array("-XX:MaxPermSize=256M") // increased after a failure in scripted source-dependencies/macro
+			try { r.invoke(m, sourcePath, true: java.lang.Boolean, v, sv, ssv, args.toArray[String], launcher, launcherVmOptions) }
 			catch { case ite: java.lang.reflect.InvocationTargetException => throw ite.getCause }
 		}
 	}
diff --git a/sbt/src/sbt-test/source-dependencies/macro/macro-client/Client.scala b/sbt/src/sbt-test/source-dependencies/macro/macro-client/Client.scala
new file mode 100644
index 000000000..90932d136
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro/macro-client/Client.scala
@@ -0,0 +1,5 @@
+package macro
+
+object Client {
+	Provider.tree(0)
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro/macro-provider/Provider.scala b/sbt/src/sbt-test/source-dependencies/macro/macro-provider/Provider.scala
new file mode 100644
index 000000000..93764e1b4
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro/macro-provider/Provider.scala
@@ -0,0 +1,5 @@
+package macro
+
+object Provider {
+	def macro tree(args: Any) = reify(args)
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro/macro-provider/changes/Provider.scala b/sbt/src/sbt-test/source-dependencies/macro/macro-provider/changes/Provider.scala
new file mode 100644
index 000000000..53a086bb8
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro/macro-provider/changes/Provider.scala
@@ -0,0 +1,5 @@
+package macro
+
+object Provider {
+	def macro tree(args: Any) = sys.error("no macro for you!")
+}
diff --git a/sbt/src/sbt-test/source-dependencies/macro/project/build.scala b/sbt/src/sbt-test/source-dependencies/macro/project/build.scala
new file mode 100644
index 000000000..1f95fbeb9
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro/project/build.scala
@@ -0,0 +1,29 @@
+import sbt._
+import Keys._
+
+object build extends Build {
+	val defaultSettings = Seq(
+		scalaVersion := "2.10.0-M2",
+		scalacOptions += "-Xmacros"
+	)
+
+	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/test b/sbt/src/sbt-test/source-dependencies/macro/test
new file mode 100644
index 000000000..b3755d4ee
--- /dev/null
+++ b/sbt/src/sbt-test/source-dependencies/macro/test
@@ -0,0 +1,13 @@
+> compile
+
+# replace macro with one that throws an error
+
+$ copy-file macro-provider/changes/Provider.scala macro-provider/Provider.scala
+
+> macro-provider/compile
+
+-> macro-client/compile
+
+> clean
+
+-> compile