diff --git a/gulpfile.js b/gulpfile.js
index 83b53a0972..e40833556e 100644
--- a/gulpfile.js
+++ b/gulpfile.js
@@ -21,19 +21,27 @@ var js2es5Options = {
   script: false, // parse as a module
   modules: 'register',
   typeAssertionModule: 'assert',
-  typeAssertions: true,
-  moduleName: true
+  typeAssertions: true
 };
 
 var js2dartOptions = {
   annotations: true, // parse annotations
   types: true, // parse types
   script: false, // parse as a module
-  outputLanguage: 'dart',
-  moduleName: true
+  outputLanguage: 'dart'
 };
 
-var traceur = require('./tools/js2dart/gulp-traceur');
+var gulpTraceur = require('./tools/js2dart/gulp-traceur');
+
+function resolveModuleName(fileName) {
+  var moduleName = fileName
+    .replace(/.*\/modules\//, '')
+    .replace(/\/src\//, '/')
+    .replace(/\/lib\//, '/')
+    .replace(/\/test\//, '/');
+  return moduleName;
+}
+
 
 // ---------
 // rtts-assert and traceur runtime
@@ -45,9 +53,9 @@ gulp.task('jsRuntime/build', function() {
 function createJsRuntimeTask(isWatch) {
   var srcFn = isWatch ? watch : gulp.src.bind(gulp);
   var rttsAssert = srcFn('tools/rtts-assert/src/assert.js')
-    .pipe(traceur(js2es5Options))
+    .pipe(gulpTraceur(js2es5Options, resolveModuleName))
     .pipe(gulp.dest('build/js'));
-  var traceurRuntime = srcFn('tools/js2dart/node_modules/traceur/bin/traceur-runtime.js')
+  var traceurRuntime = srcFn(gulpTraceur.RUNTIME_PATH)
     .pipe(gulp.dest('build/js'));
   return mergeStreams(rttsAssert, traceurRuntime);
 }
@@ -57,7 +65,7 @@ function createJsRuntimeTask(isWatch) {
 var sourceTypeConfigs = {
   dart: {
     compiler: function() {
-      return traceur(js2dartOptions, true);
+      return gulpTraceur(js2dartOptions, resolveModuleName);
     },
     transpileSrc: ['modules/**/*.js'],
     htmlSrc: ['modules/*/src/**/*.html'],
@@ -78,7 +86,7 @@ var sourceTypeConfigs = {
   },
   js: {
     compiler: function() {
-      return traceur(js2es5Options, true);
+      return gulpTraceur(js2es5Options, resolveModuleName);
     },
     transpileSrc: ['modules/**/*.js', 'modules/**/*.es6'],
     htmlSrc: ['modules/*/src/**/*.html'],
@@ -174,26 +182,12 @@ gulp.task('serve', connect.server({
 
 gulp.task('clean', ['js2dart/clean', 'modules/clean']);
 
-gulp.task('build', function() {
-  return runSequence(
-    // sequential
-    'js2dart/build',
-    // parallel
-    ['jsRuntime/build', 'modules/build.dart', 'modules/build.js']
-  );
-});
+gulp.task('build', ['jsRuntime/build', 'modules/build.dart', 'modules/build.js']);
 
 gulp.task('watch', function() {
-  runSequence('js2dart/test/watch');
-  var js2dartWatch = watch(js2dartTasks.paths.js2dartSrc, function(_, done) {
-    runSequence(
-      // sequential
-      'js2dart/build', 'js2dart/test',
-      // parallel
-      ['jsRuntime/build', 'modules/build.dart', 'modules/build.js'],
-      done);
-  });
+  // parallel is important as both streams are infinite!
+  runSequence(['js2dart/test/watch', 'js2dart/src/watch']);
   var dartModuleWatch = createModuleTask(sourceTypeConfigs.dart, true);
   var jsModuleWatch = createModuleTask(sourceTypeConfigs.js, true);
-  return mergeStreams(js2dartWatch, dartModuleWatch, jsModuleWatch, createJsRuntimeTask(true));
+  return mergeStreams(dartModuleWatch, jsModuleWatch, createJsRuntimeTask(true));
 });
diff --git a/karma-dart.conf.js b/karma-dart.conf.js
new file mode 100644
index 0000000000..81643b456e
--- /dev/null
+++ b/karma-dart.conf.js
@@ -0,0 +1,61 @@
+// Karma configuration
+// Generated on Thu Sep 25 2014 11:52:02 GMT-0700 (PDT)
+
+module.exports = function(config) {
+  config.set({
+
+    frameworks: ['dart-unittest'],
+
+    files: [
+      {pattern: 'packages/**/*.dart', included: false},
+      {pattern: 'modules/*/src/**/*.js', included: false},
+      {pattern: 'modules/*/test/**/*.js', included: true},
+      {pattern: 'modules/**/*.dart', included: false},
+      'packages/browser/dart.js'
+    ],
+
+    karmaDartImports: {
+      guinness: 'package:guinness/guinness_html.dart'
+    },
+
+    preprocessors: {
+      'modules/**/*.js': ['traceur']
+    },
+    customFileHandlers: [{
+      urlRegex: /.*\/packages\/.*$/,
+      handler: function(request, response, fa, fb, basePath) {
+        var url = request.url;
+        var path = url.indexOf('?') > -1 ? url.substring(0, url.indexOf('?')) : url;
+        var contets = fs.readFileSync(basePath + path);
+        response.writeHead(200);
+        response.end(contets);
+      }
+    }],
+    traceurPreprocessor: {
+      options: {
+        outputLanguage: 'dart',
+        script: false,
+        modules: 'register',
+        types: true,
+        // typeAssertions: true,
+        // typeAssertionModule: 'assert',
+        annotations: true
+      },
+      resolveModuleName: function(fileName) {
+        var moduleName = fileName
+          .replace(/.*\/modules\//, '')
+          .replace(/\/src\//, '/')
+          .replace(/\/test\//, '/');
+        return moduleName;
+      },
+      transformPath: function(fileName) {
+        return fileName.replace('.js', '.dart');
+      }
+    },
+
+    browsers: ['Dartium']
+  });
+
+
+  config.plugins.push(require('./tools/js2dart/karma-traceur-preprocessor'));
+};
diff --git a/karma-js.conf.js b/karma-js.conf.js
new file mode 100644
index 0000000000..8f91d870eb
--- /dev/null
+++ b/karma-js.conf.js
@@ -0,0 +1,50 @@
+// Karma configuration
+// Generated on Thu Sep 25 2014 11:52:02 GMT-0700 (PDT)
+
+module.exports = function(config) {
+  config.set({
+
+    frameworks: ['jasmine'],
+
+    files: [
+      'node_modules/traceur/bin/traceur-runtime.js',
+      './karma-mock-annotations.js',
+      'modules/**/test_lib/**/*.es6',
+      'modules/**/*.js',
+      'modules/**/*.es6',
+      'test-main.js'
+    ],
+
+    preprocessors: {
+      'modules/**/*.js': ['traceur'],
+      'modules/**/*.es6': ['traceur']
+    },
+
+    traceurPreprocessor: {
+      options: {
+        outputLanguage: 'es5',
+        script: false,
+        modules: 'register',
+        types: true,
+        // TODO: turn this on!
+        // typeAssertions: true,
+        // typeAssertionModule: 'assert',
+        annotations: true
+      },
+      resolveModuleName: function(fileName) {
+        var moduleName = fileName
+          .replace(/.*\/modules\//, '')
+          .replace(/\/src\//, '/')
+          .replace(/\/test\//, '/');
+        return moduleName;
+      },
+      transformPath: function(fileName) {
+        return fileName.replace('.es6', '');
+      }
+    },
+
+    browsers: ['Chrome']
+  });
+
+  config.plugins.push(require('./tools/js2dart/karma-traceur-preprocessor'));
+};
diff --git a/karma-mock-annotations.js b/karma-mock-annotations.js
new file mode 100644
index 0000000000..c59b287bac
--- /dev/null
+++ b/karma-mock-annotations.js
@@ -0,0 +1,3 @@
+
+// TODO: Remove these annotations in the JS traceur build as they are only needed in Dart
+window.FIELD = function() {};
\ No newline at end of file
diff --git a/modules/change_detection/pubspec.yaml b/modules/change_detection/pubspec.yaml
index cbcecb376a..70f6b4688a 100644
--- a/modules/change_detection/pubspec.yaml
+++ b/modules/change_detection/pubspec.yaml
@@ -3,4 +3,5 @@ environment:
   sdk: '>=1.4.0'
 dependencies:
 dev_dependencies:
-  unittest: '>=0.10.1 <0.12.0'
+  test_lib:
+    path: ../test_lib
diff --git a/modules/core/pubspec.yaml b/modules/core/pubspec.yaml
index 56df496cee..79e6e01bb4 100644
--- a/modules/core/pubspec.yaml
+++ b/modules/core/pubspec.yaml
@@ -9,4 +9,5 @@ dependencies:
   facade:
     path: ../facade
 dev_dependencies:
-  unittest: '>=0.10.1 <0.12.0'
+  test_lib:
+    path: ../test_lib
diff --git a/modules/core/src/compiler/compiler.js b/modules/core/src/compiler/compiler.js
index 3ff9b4471a..0c4290a1e6 100644
--- a/modules/core/src/compiler/compiler.js
+++ b/modules/core/src/compiler/compiler.js
@@ -1,4 +1,4 @@
-import {Future} from 'facade/lang';
+import {Future, Type} from 'facade/lang';
 import {Element} from 'facade/dom';
 import {ProtoView} from '../view/proto_view';
 import {TemplateLoader} from './template_loader';
diff --git a/modules/core/test/compiler/compiler_spec.js b/modules/core/test/compiler/compiler_spec.js
index f4d50cd01e..aef400851f 100644
--- a/modules/core/test/compiler/compiler_spec.js
+++ b/modules/core/test/compiler/compiler_spec.js
@@ -1,6 +1,7 @@
-import {describe, id} from 'spec/spec';
+import {describe, id} from 'test_lib/test_lib';
+import {Compiler} from './compiler';
 
-function main() {
+export function main() {
   describe('compiler', () => {
     it('should hello', () => {
       print('I am working');
diff --git a/modules/di/pubspec.yaml b/modules/di/pubspec.yaml
index 29ee7a0ee0..47f23d1078 100644
--- a/modules/di/pubspec.yaml
+++ b/modules/di/pubspec.yaml
@@ -5,4 +5,5 @@ dependencies:
   facade:
     path: ../facade
 dev_dependencies:
-  unittest: '>=0.10.1 <0.12.0'
+  test_lib:
+    path: ../test_lib
diff --git a/modules/di/src/key.js b/modules/di/src/key.js
new file mode 100644
index 0000000000..3495ba68ce
--- /dev/null
+++ b/modules/di/src/key.js
@@ -0,0 +1,3 @@
+export class Key {
+
+}
\ No newline at end of file
diff --git a/modules/di/src/module.js b/modules/di/src/module.js
index ed453bbb8e..62cf0bb562 100644
--- a/modules/di/src/module.js
+++ b/modules/di/src/module.js
@@ -1,5 +1,6 @@
 import {Type} from 'facade/lang';
 import {Map, MapWrapper wraps Map} from 'facade/collection';
+import {Key} from './key';
 
 /// becouse we need to know when toValue was not set.
 /// (it could be that toValue is set to null or undefined in js)
diff --git a/modules/examples/pubspec.yaml b/modules/examples/pubspec.yaml
index 03b2478582..4fef0f5046 100644
--- a/modules/examples/pubspec.yaml
+++ b/modules/examples/pubspec.yaml
@@ -3,4 +3,5 @@ environment:
   sdk: '>=1.4.0'
 dependencies:
 dev_dependencies:
-  unittest: '>=0.10.1 <0.12.0'
+  test_lib:
+    path: ../test_lib
diff --git a/modules/facade/pubspec.yaml b/modules/facade/pubspec.yaml
index e5bd9d2b19..7814562608 100644
--- a/modules/facade/pubspec.yaml
+++ b/modules/facade/pubspec.yaml
@@ -3,4 +3,5 @@ environment:
   sdk: '>=1.4.0'
 dependencies:
 dev_dependencies:
-  unittest: '>=0.10.1 <0.12.0'
+  test_lib:
+    path: ../test_lib
diff --git a/modules/test_lib/pubspec.yaml b/modules/test_lib/pubspec.yaml
new file mode 100644
index 0000000000..5e4aefe794
--- /dev/null
+++ b/modules/test_lib/pubspec.yaml
@@ -0,0 +1,6 @@
+name: test_lib
+environment:
+  sdk: '>=1.4.0'
+dependencies:
+dev_dependencies:
+  guinness: ">=0.1.5 <0.2.0"
diff --git a/modules/test_lib/src/test_lib.dart b/modules/test_lib/src/test_lib.dart
new file mode 100644
index 0000000000..812d464e61
--- /dev/null
+++ b/modules/test_lib/src/test_lib.dart
@@ -0,0 +1 @@
+export 'package:guinness/guinness.dart' show describe, it, beforeEach, afterEach, expect;
diff --git a/modules/test_lib/src/test_lib.es6 b/modules/test_lib/src/test_lib.es6
new file mode 100644
index 0000000000..cfe98c6c19
--- /dev/null
+++ b/modules/test_lib/src/test_lib.es6
@@ -0,0 +1,8 @@
+export var describe = window.describe;
+export var it = window.it;
+export var beforeEach = window.beforeEach;
+export var afterEach = window.afterEach;
+export var expect = window.expect;
+
+// To make testing consistent between dart and js
+window.print = window.dump || window.console.log;
diff --git a/package.json b/package.json
index d06447da5a..3fb7d97630 100644
--- a/package.json
+++ b/package.json
@@ -12,6 +12,10 @@
     "gulp-rename": "^1.2.0",
     "gulp-shell": "^0.2.9",
     "gulp-watch": "^1.0.3",
+    "karma": "^0.12.23",
+    "karma-chrome-launcher": "^0.1.4",
+    "karma-dart": "^0.2.8",
+    "karma-jasmine": "^0.2.2",
     "q": "^1.0.1",
     "through2": "^0.6.1",
     "event-stream": "^3.1.5",
@@ -19,6 +23,7 @@
     "gulp-rimraf": "^0.1.0",
     "run-sequence": "^0.3.6",
     "glob": "^4.0.6",
-    "gulp-ejs": "^0.3.1"
-   }
+    "gulp-ejs": "^0.3.1",
+    "traceur": "0.0.66"
+  }
 }
diff --git a/pubspec.yaml b/pubspec.yaml
index 6cedec6afc..0a174e8213 100644
--- a/pubspec.yaml
+++ b/pubspec.yaml
@@ -2,9 +2,13 @@ name: angular
 version: 0.0.0
 authors:
 - Vojta Jina <vojta.jina@gmail.com>
-description: Compile JavaScript to Dart so that you can compile it back to JavaScript and run.
+description: Angular
 environment:
   sdk: '>=1.4.0'
 dependencies:
 dev_dependencies:
+  test_lib:
+    path: modules/test_lib
   unittest: '>=0.10.1 <0.12.0'
+  guinness: ">=0.1.5 <0.2.0"
+  browser: '>=0.10.0 <0.11.0'
diff --git a/test-main.js b/test-main.js
new file mode 100644
index 0000000000..536f040d2f
--- /dev/null
+++ b/test-main.js
@@ -0,0 +1,12 @@
+var TEST_REGEXP = /^\/base\/modules\/[^\/]*\/test\/.*/;
+
+Object.keys(window.__karma__.files).forEach(function(path) {
+  if (TEST_REGEXP.test(path)) {
+    var moduleName = path
+      .replace(/.*\/modules\//, '')
+      .replace(/\/src\//, '/')
+      .replace(/\/test\//, '/')
+      .replace(/\.\w*$/, '');
+    System.get(moduleName).main();
+  }
+});
diff --git a/tools/js2dart/gulp-tasks.js b/tools/js2dart/gulp-tasks.js
index 2c4a2af844..de2cfac5ad 100644
--- a/tools/js2dart/gulp-tasks.js
+++ b/tools/js2dart/gulp-tasks.js
@@ -12,7 +12,6 @@ var traceurDir = baseDir+'/../traceur';
 var buildDir = baseDir + '/build';
 
 var paths = {
-  traceurSrc: traceurDir+'/src/**/*.js',
   js2dartSrc: baseDir + '/src/**/*.js',
   specTranspile: baseDir + '/spec/**/*.js',
   specTemplates: baseDir + '/spec/**/*.template',
@@ -26,29 +25,11 @@ module.exports.paths = paths;
 function install(gulp) {
   var runSequence = require('run-sequence').use(gulp);
 
-  // -- js2dart
-  var buildJs2DartOptions = {
-    modules: 'register',
-    moduleName: true,
-    referrer: 'js2dart/src/',
-    script: false // parse as a module
-  };
-
-  var js2dartOptions = {
+  var spec2dartOptions = {
     annotations: true, // parse annotations
     types: true, // parse types
     script: false, // parse as a module
-    outputLanguage: 'dart',
-    moduleName: true
-  };
-
-  var js2es5Options = {
-    annotations: true, // parse annotations
-    types: true, // parse types
-    script: false, // parse as a module
-    modules: 'register',
-    typeAssertions: true,
-    moduleName: true
+    outputLanguage: 'dart'
   };
 
   gulp.task('js2dart/clean', function() {
@@ -56,14 +37,6 @@ function install(gulp) {
         .pipe(clean());
   });
 
-  gulp.task('js2dart/build', function() {
-    return gulp
-      .src(paths.js2dartSrc)
-      .pipe(gulpTraceur(buildJs2DartOptions, false))
-      .pipe(gulp.dest(buildDir + '/js2dart'))
-      .on('end', gulpTraceur.reloadPatches);
-  });
-
   gulp.task('js2dart/test/build', function() {
     return mergeStreams(specTranspile(false), specCopy(false), specRunner(false));
   });
@@ -76,6 +49,13 @@ function install(gulp) {
     runSequence('js2dart/test/build', 'js2dart/test/run', done);
   });
 
+  gulp.task('js2dart/src/watch', function(done) {
+    return watch(paths.js2dartSrc, function(changes, done) {
+      gulpTraceur.sourcesChanged();
+      runSequence('js2dart/test', done);
+    });
+  });
+
   gulp.task('js2dart/test/watch', function(done) {
     var streams = [];
     streams.push(specTranspile(true)
@@ -93,7 +73,7 @@ function install(gulp) {
   function specTranspile(isWatch) {
     var srcFn = isWatch ? watch : gulp.src.bind(gulp);
     return srcFn(paths.specTranspile)
-      .pipe(gulpTraceur(js2dartOptions, true))
+      .pipe(gulpTraceur(spec2dartOptions))
       .pipe(rename({extname: '.dart'}))
       .pipe(gulp.dest(buildDir+'/spec'));
   }
diff --git a/tools/js2dart/gulp-traceur.js b/tools/js2dart/gulp-traceur.js
index 39f4cbca86..e59390a1d0 100644
--- a/tools/js2dart/gulp-traceur.js
+++ b/tools/js2dart/gulp-traceur.js
@@ -1,22 +1,12 @@
 'use strict';
 var through = require('through2');
-var fs = require('fs');
-var path = require('path');
-var originalTraceur = require('traceur');
-var glob = require('glob');
+var compiler = require('./index');
 
 module.exports = gulpTraceur;
-gulpTraceur.reloadPatches = function() {
-  loadPatches(true);
-};
-gulpTraceur.loadPatches = loadPatches;
+gulpTraceur.RUNTIME_PATH = compiler.RUNTIME_PATH;
+gulpTraceur.sourcesChanged = compiler.sourcesChanged;
 
-
-/// usePatches: whether to use plain traceur or apply
-/// our patches...
-function gulpTraceur(options, usePatches) {
-  var lastLoadCounter = loadCounter;
-  var lastCompiler = null;
+function gulpTraceur(options, resolveModuleName) {
   options = options || {};
 
   return through.obj(function (file, enc, done) {
@@ -29,14 +19,13 @@ function gulpTraceur(options, usePatches) {
       throw new Error('gulp-traceur: Streaming not supported');
     }
 
-    var compiler = createCompilerIfNeeded();
-    var ret;
     try {
-      var fileName = file.relative;
-      if (options.referrer) {
-        fileName = options.referrer + '/' + fileName;
-      }
-      var compiled = compiler.compile(file.contents.toString(), fileName, fileName);
+      var moduleName = resolveModuleName ? resolveModuleName(file.relative) : null;
+      var compiled = compiler.compile(options, {
+        inputPath: file.relative,
+        outputPath: file.relative,
+        moduleName: moduleName
+      }, file.contents.toString());
       file.contents = new Buffer(compiled);
       this.push(file);
       done();
@@ -48,79 +37,4 @@ function gulpTraceur(options, usePatches) {
       }
     }
   });
-
-  function createCompilerIfNeeded() {
-    loadPatches(false);
-    if (!lastCompiler || lastLoadCounter !== loadCounter) {
-      lastLoadCounter = loadCounter;
-      var CompilerBase;
-      if (usePatches) {
-        CompilerBase = System.get('js2dart/src/compiler').Compiler;
-      } else {
-        CompilerBase = System.get(System.map.traceur+'/src/Compiler').Compiler;
-      }
-      var Compiler = createCompilerConstructor(CompilerBase);
-      lastCompiler = new Compiler(options);
-    }
-    return lastCompiler;
-  }
 };
-
-function createCompilerConstructor(CompilerBase) {
-  // See traceur/src/NodeCompiler.js
-  // Needed here as we want to be able to reload
-  // traceur sources once they changed
-  function NodeCompiler(options, sourceRoot) {
-    var sourceRoot = sourceRoot || process.cwd();
-    CompilerBase.call(this, options, sourceRoot);
-  }
-
-  NodeCompiler.prototype = {
-    __proto__: CompilerBase.prototype,
-
-    resolveModuleName: function(filename) {
-      debugger;
-      if (!filename)
-        return;
-      var moduleName = filename.replace(/\.js$/, '');
-      return path.relative(this.sourceRoot, moduleName).replace(/\\/g,'/');
-    },
-
-    sourceName: function(filename) {
-      return path.relative(this.sourceRoot, filename);
-    }
-  }
-
-  return NodeCompiler;
-}
-
-var loadCounter = 0;
-function loadPatches(reload) {
-  if (loadCounter && !reload) {
-    return;
-  }
-  loadCounter++;
-  // see traceur/src/traceur.js
-  // To reload the js2dart modules we need
-  // to clear the registry. To do that we
-  // reload the traceur module...
-  loadModule(path.dirname(module.filename), './node_modules/traceur/bin/traceur.js');
-
-  var buildDir = __dirname + '/build/js2dart';
-  var moduleNames = [].slice.call(glob.sync('**/*.js', {
-    cwd: buildDir
-  }));
-  moduleNames.forEach(function(filename) {
-    loadModule(buildDir, filename);
-  });
-
-  function loadModule(baseFolder, filename) {
-    filename = path.join(baseFolder, filename);
-    var data = fs.readFileSync(filename, 'utf8');
-    if (!data)
-      throw new Error('Failed to import ' + filename);
-
-    ('global', eval)(data);
-  }
-
-}
diff --git a/tools/js2dart/gulpfile.js b/tools/js2dart/gulpfile.js
index f6ef366e1a..636631ef00 100644
--- a/tools/js2dart/gulpfile.js
+++ b/tools/js2dart/gulpfile.js
@@ -6,20 +6,13 @@ var mergeStreams = require('event-stream').merge;
 
 tasks.install(gulp);
 
-gulp.task('build', function() {
-  return runSequence('js2dart/build');
-});
-
 gulp.task('test', function() {
-  return runSequence('build', 'js2dart/test');
+  return runSequence('js2dart/test');
 });
 
 gulp.task('clean', ['js2dart/clean']);
 
-gulp.task('watch', function() {
-  var js2dartWatch = watch(tasks.paths.js2dartSrc, function(_, done) {
-    runSequence('js2dart/build', 'js2dart/test', done);
-  });
-  runSequence('js2dart/test/watch');
-  return js2dartWatch;
+gulp.task('watch', function(done) {
+  // parallel is important as both streams are infinite!
+  runSequence(['js2dart/test/watch', 'js2dart/src/watch'], done);
 });
\ No newline at end of file
diff --git a/tools/js2dart/index.js b/tools/js2dart/index.js
new file mode 100644
index 0000000000..51d48535db
--- /dev/null
+++ b/tools/js2dart/index.js
@@ -0,0 +1,85 @@
+// Entry point for Node.
+
+var fs = require('fs');
+var glob = require('glob');
+var path = require('path');
+var traceur = require('traceur');
+
+exports.RUNTIME_PATH = traceur.RUNTIME_PATH;
+var TRACEUR_PATH = traceur.RUNTIME_PATH.replace('traceur-runtime.js', 'traceur.js');
+var SELF_SOURCE_REGEX = /js2dart\/src/;
+var SELF_COMPILE_OPTIONS = {
+  modules: 'register',
+  moduleName: true,
+  script: false // parse as a module
+};
+
+var needsReload = true;
+
+// TODO(vojta): call this if sources changed
+exports.sourcesChanged = function() {
+  needsReload = true;
+};
+
+exports.compile = function compile(options, paths, source) {
+  if (needsReload) {
+    reloadCompiler();
+    needsReload = false;
+  }
+  var inputPath, outputPath, moduleName;
+  if (typeof paths === 'string') {
+    inputPath = outputPath = paths;
+  } else {
+    inputPath = paths.inputPath;
+    outputPath = paths.inputPath;
+    moduleName = paths.moduleName;
+  }
+  outputPath = outputPath || inputPath;
+  moduleName = moduleName || inputPath;
+  moduleName = moduleName.replace(/\.\w*$/, '');
+
+  var localOptions = extend(options, {
+    moduleName: moduleName
+  });
+  var CompilerCls = System.get('js2dart/src/compiler').Compiler;
+  return (new CompilerCls(localOptions)).compile(source, inputPath, outputPath);
+};
+
+// Transpile and evaluate the code in `src`.
+// Use existing traceur to compile our sources.
+function reloadCompiler() {
+  loadModule(TRACEUR_PATH, false);
+  glob.sync(__dirname + '/src/**/*.js').forEach(function(fileName) {
+    loadModule(fileName, true);
+  });
+}
+
+function loadModule(filepath, transpile) {
+  var data = fs.readFileSync(filepath, 'utf8');
+
+  if (!data) {
+    throw new Error('Failed to import ' + filepath);
+  }
+
+  if (transpile) {
+    var moduleName = filepath
+      .replace(__dirname, 'js2dart')
+      .replace(/\.\w*$/, '');
+    data = (new traceur.NodeCompiler(
+      extend(SELF_COMPILE_OPTIONS, { moduleName: moduleName } )
+    )).compile(data, filepath, filepath);
+  }
+
+  ('global', eval)(data);
+}
+
+function extend(source, props) {
+  var res = {};
+  for (var prop in source) {
+    res[prop] = source[prop];
+  }
+  for (var prop in props) {
+    res[prop] = props[prop];
+  }
+  return res;
+}
\ No newline at end of file
diff --git a/tools/js2dart/karma-traceur-preprocessor.js b/tools/js2dart/karma-traceur-preprocessor.js
index 10a937a748..f7a247242f 100644
--- a/tools/js2dart/karma-traceur-preprocessor.js
+++ b/tools/js2dart/karma-traceur-preprocessor.js
@@ -1,61 +1,37 @@
-var traceur = require('traceur');
+var js2dart = require('./index.js');
 
-var createTraceurPreprocessor = function(args, config, logger, helper) {
-  config = config || {};
+module.exports = {
+  'preprocessor:traceur': ['factory', createJs2DartPreprocessor]
+};
 
-  var log = logger.create('preprocessor.traceur');
-  var defaultOptions = {
-    sourceMaps: false,
-    modules: 'amd'
-  };
-  var options = helper.merge(defaultOptions, args.options || {}, config.options || {});
-
-  var transformPath = args.transformPath || config.transformPath || function(filepath) {
-    return filepath.replace(/\.es6.js$/, '.js').replace(/\.es6$/, '.js');
-  };
+function createJs2DartPreprocessor(logger, basePath, config) {
+  var log = logger.create('traceur');
 
   return function(content, file, done) {
-    log.debug('Processing "%s".', file.originalPath);
-    file.path = transformPath(file.originalPath);
-    options.filename = file.originalPath;
 
-    var result = traceur.compile(content, options);
-    var transpiledContent = result.js;
-
-    result.errors.forEach(function(err) {
-      log.error(err);
-    });
-
-    if (result.errors.length) {
-      return done(new Error('TRACEUR COMPILE ERRORS\n' + result.errors.join('\n')));
+    try {
+      var moduleName = config.resolveModuleName(file.originalPath);
+      if (config.transformPath) {
+        file.path = config.transformPath(file.originalPath);
+      }
+      done(null, js2dart.compile(config.options, {
+        inputPath: file.originalPath,
+        moduleName: moduleName
+      }, content));
+    } catch (errors) {
+      var errorString;
+      if (errors.forEach) {
+        errors.forEach(function(error) {
+          log.error(error);
+        });
+        errorString = errors.join('\n');
+      } else {
+        log.error(errors);
+        errorString = errors;
+      }
+      done(new Error('TRACEUR COMPILE ERRORS\n' + errorString));
     }
-
-    // TODO(vojta): Tracer should return JS object, rather than a string.
-    if (result.generatedSourceMap) {
-      var map = JSON.parse(result.generatedSourceMap);
-      map.file = file.path;
-      transpiledContent += '\n//# sourceMappingURL=data:application/json;charset=utf-8;base64,';
-      transpiledContent += new Buffer(JSON.stringify(map)).toString('base64') + '\n';
-
-      file.sourceMap = map;
-    }
-
-    return done(null, transpiledContent);
   };
-};
+}
 
-createTraceurPreprocessor.$inject = ['args', 'config.traceurPreprocessor', 'logger', 'helper'];
-
-
-var initTraceurFramework = function(files) {
-  files.unshift({pattern: traceur.RUNTIME_PATH, included: true, served: true, watched: false});
-};
-
-initTraceurFramework.$inject = ['config.files'];
-
-
-// PUBLISH DI MODULE
-module.exports = {
-  'preprocessor:traceur': ['factory', createTraceurPreprocessor],
-  'framework:traceur': ['factory', initTraceurFramework]
-};
\ No newline at end of file
+createJs2DartPreprocessor.$inject = ['logger', 'config.basePath', 'config.traceurPreprocessor'];
diff --git a/tools/js2dart/src/compiler.js b/tools/js2dart/src/compiler.js
index 2724c44619..04d6b54a05 100644
--- a/tools/js2dart/src/compiler.js
+++ b/tools/js2dart/src/compiler.js
@@ -24,8 +24,8 @@ export class Compiler extends TraceurCompiler {
   }
 
   write(tree, outputName = undefined, sourceRoot = undefined) {
-   if (this.options_.outputLanguage.toLowerCase() === 'dart') {
-      var writer = new DartTreeWriter(outputName);
+    if (this.options_.outputLanguage.toLowerCase() === 'dart') {
+      var writer = new DartTreeWriter(this.options_.moduleName, outputName);
       writer.visitAny(tree);
       return writer.toString();
     } else {
diff --git a/tools/js2dart/src/dart_writer.js b/tools/js2dart/src/dart_writer.js
index e8999945bb..e0a23e4617 100644
--- a/tools/js2dart/src/dart_writer.js
+++ b/tools/js2dart/src/dart_writer.js
@@ -4,13 +4,11 @@ import {EQUAL_EQUAL_EQUAL, OPEN_PAREN, CLOSE_PAREN, IMPORT, SEMI_COLON, STAR, OP
 import {ParseTreeWriter as JavaScriptParseTreeWriter} from 'traceur/src/outputgeneration/ParseTreeWriter';
 
 export class DartTreeWriter extends JavaScriptParseTreeWriter {
-  constructor(moduleName) {
-    super();
+  constructor(moduleName, outputPath) {
+    super(outputPath);
     this.libName = moduleName
         .replace(/\//g, '.')
-        .replace(/[^\w.]/g, '_')
-        .replace('.lib.', '.')
-        .replace(/\.dart$/, '');
+        .replace(/[^\w.]/g, '_');
   }
 
   // VARIABLES - types