diff --git a/harbour/source/hbpp/harb.h b/harbour/source/hbpp/harb.h
index 8988147042..35df092667 100644
--- a/harbour/source/hbpp/harb.h
+++ b/harbour/source/hbpp/harb.h
@@ -16,6 +16,12 @@ typedef long LONG;
 typedef unsigned long ULONG;
 #define PATH_DELIMITER  "/\\"
 #define IS_PATH_SEP( c ) (strchr(PATH_DELIMITER, (c))!=NULL)
+#define OPT_DELIMITER  "/-"
+#define IS_OPT_SEP( c ) (strchr(OPT_DELIMITER, (c))!=NULL)
+typedef struct _PATHNAMES { /* the list of pathnames to search with #include */
+  char *szPath;
+  struct _PATHNAMES *pNext;
+} PATHNAMES;
 #ifndef _POSIX_PATH_MAX
    #define _POSIX_PATH_MAX    255
 #endif
diff --git a/harbour/source/hbpp/hbpp.c b/harbour/source/hbpp/hbpp.c
index 87f320abb5..3bb79113a7 100644
--- a/harbour/source/hbpp/hbpp.c
+++ b/harbour/source/hbpp/hbpp.c
@@ -58,6 +58,7 @@ int strotrim ( char* );
 char* strodup ( char * );
 int NextWord ( char**, char*, int);
 int NextName ( char**, char*, char**);
+int Include( char *, PATHNAMES *, FILE** );
 
 #define isname(c)  (isalnum(c) || c=='_' || (c) > 0x7e)
 #define SKIPTABSPACES(sptr) while ( *sptr == ' ' || *sptr == '\t' ) (sptr)++
@@ -90,6 +91,7 @@ int nline=0;
 int Repeate;
 char groupchar;
 
+extern PATHNAMES *_pIncludePath;
 extern DEFINES aDefines[] ;
 extern int koldef;
 DEFINES *aDefnew ;
@@ -134,9 +136,9 @@ int ParseDirective( char* sLine )
    if ( *(sLine+i) != '\"' ) return 1000;
    *(sLine+i) = '\0';
 
-   if ((handl_i = fopen(sLine, "r")) == NULL)
+//   if ((handl_i = fopen(sLine, "r")) == NULL)
+   if ( !OpenInclude( sLine, _pIncludePath, &handl_i ) )
     { printf("\nCan't open %s",sLine); return 1001; }
-
    lInclude++;
    Hp_Parse(handl_i, 0 );
    lInclude--;
@@ -1400,3 +1402,33 @@ int NextName ( char** sSource, char* sDest, char **sOut )
  *sDest = '\0';
  return i;
 }
+
+int OpenInclude( char * szFileName, PATHNAMES *pSearch, FILE** fptr )
+{
+  if( ! ( *fptr = fopen( szFileName, "r" ) ) )
+  {
+    if( pSearch )
+    {
+      FILENAME *pFileName =SplitFilename( szFileName );
+      char szFName[ _POSIX_PATH_MAX ];    /* filename to parse */
+
+      pFileName->name =szFileName;
+      pFileName->extension =NULL;
+      while( pSearch && !*fptr )
+      {
+        pFileName->path =pSearch->szPath;
+        MakeFilename( szFName, pFileName );
+        if( ! ( *fptr = fopen( szFName, "r" ) ) )
+        {
+            pSearch = pSearch->pNext;
+            if( ! pSearch )
+              return 0;
+        }
+      }
+      _xfree( pFileName );
+    }
+    else
+      return 0;
+  }
+  return 1;
+}
\ No newline at end of file
diff --git a/harbour/source/hbpp/hbppmain.c b/harbour/source/hbpp/hbppmain.c
index cd6619c5c8..0f4a4f7f14 100644
--- a/harbour/source/hbpp/hbppmain.c
+++ b/harbour/source/hbpp/hbppmain.c
@@ -33,33 +33,74 @@ extern DEFINES *aDefnew ;
 extern COMMANDS *aCommnew ;
 extern TRANSLATES *aTranslates ;
 
+PATHNAMES *_pIncludePath = NULL;
+void AddSearchPath( char *, PATHNAMES * * ); /* add pathname to a search list */
+
 int main (int argc,char* argv[])
 {
 FILE *handl_i,*handl_o;
 char szFileName[ _POSIX_PATH_MAX ];
 FILENAME *pFileName =NULL;
+int iArg = 1;
 
- if(argc<2) { printf("File name absent"); return 1; }
- pFileName =SplitFilename( argv[1] );
- if( !pFileName->extension )
-   pFileName->extension =".prg";
- MakeFilename( szFileName, pFileName );
+   while( iArg < argc )
+   {
+     if( IS_OPT_SEP(argv[ iArg ][ 0 ]))
+     {
+       switch( argv[ iArg ][ 1 ] )
+       {
+         case 'd':
+         case 'D':   /* defines a Lex #define from the command line */
+           {
+             unsigned int i = 0;
+             char * szDefText = strdup( argv[ iArg ] + 2 );
+             while( i < strolen( szDefText ) && szDefText[ i ] != '=' )
+             i++;
+             if( szDefText[ i ] != '=' )
+             AddDefine( szDefText, 0 );
+             else
+             {
+               szDefText[ i ] = 0;
+               AddDefine( szDefText, szDefText + i + 1 );
+             }
+             free( szDefText );
+           }
+           break;
+         case 'i':
+         case 'I':
+           AddSearchPath( argv[ iArg ]+2, &_pIncludePath );
+           break;
+         default:
+            printf( "Invalid command line option: %s\n", &argv[ iArg ][ 1 ] );
+            break;
+       }
+     }
+     else  pFileName =SplitFilename( argv[ iArg ] );
+     iArg++;
+   }
+   if( pFileName )
+   {
+     if( !pFileName->extension )   pFileName->extension =".prg";
+      MakeFilename( szFileName, pFileName );
 
- if ((handl_i = fopen(szFileName, "r")) == NULL)
- { printf("Can't open %s",szFileName); return 1; }
+      if ((handl_i = fopen(szFileName, "r")) == NULL)
+         { printf("Can't open %s",szFileName); return 1; }
+   }
+   else { printf("File name absent"); return 1; }
 
- pFileName->extension =".ppo";
- MakeFilename( szFileName, pFileName );
- if ((handl_o = fopen(szFileName, "wt" )) == NULL)
- { printf("Can't open %s",szFileName); return 1; }
+   pFileName->extension =".ppo";
+   MakeFilename( szFileName, pFileName );
 
- aCondCompile = (int*) _xgrab( sizeof(int) * 5 );
- aDefnew = ( DEFINES * ) _xgrab( sizeof(DEFINES) * 50 );
- aCommnew = ( COMMANDS * ) _xgrab( sizeof(COMMANDS) * INITIAL_ACOM_SIZE );
- aTranslates = ( TRANSLATES * ) _xgrab( sizeof(TRANSLATES) * 50 );
+   if ((handl_o = fopen(szFileName, "wt" )) == NULL)
+        { printf("Can't open %s",szFileName); return 1; }
 
- Hp_Parse(handl_i,handl_o );
- fclose(handl_i); fclose(handl_o);
+    aCondCompile = (int*) _xgrab( sizeof(int) * 5 );
+    aDefnew = ( DEFINES * ) _xgrab( sizeof(DEFINES) * 50 );
+    aCommnew = ( COMMANDS * ) _xgrab( sizeof(COMMANDS) * INITIAL_ACOM_SIZE );
+    aTranslates = ( TRANSLATES * ) _xgrab( sizeof(TRANSLATES) * 50 );
+
+    Hp_Parse(handl_i,handl_o );
+    fclose(handl_i); fclose(handl_o);
 /*
  for (int i=0;i<kolcommands;i++)
  {
@@ -244,6 +285,28 @@ char *MakeFilename( char *szFileName, FILENAME *pFileName )
   return szFileName;
 }
 
+/*
+ * Function that adds specified path to the list of pathnames to search
+ */
+void AddSearchPath( char *szPath, PATHNAMES * *pSearchList )
+{
+  PATHNAMES *pPath = *pSearchList;
+
+  if( pPath )
+  {
+    while( pPath->pNext )
+      pPath = pPath->pNext;
+    pPath->pNext = ( PATHNAMES * ) OurMalloc( sizeof( PATHNAMES ) );
+    pPath = pPath->pNext;
+  }
+  else
+  {
+    *pSearchList =pPath =(PATHNAMES *)OurMalloc( sizeof(PATHNAMES) );
+  }
+  pPath->pNext  = NULL;
+  pPath->szPath = szPath;
+}
+
 void * OurMalloc( LONG lSize )
 {
    void * pMem = malloc( lSize );