diff --git a/src/etc/testcases/taskdefs/ant.xml b/src/etc/testcases/taskdefs/ant.xml
index 3a0262d88..4024bc3d2 100644
--- a/src/etc/testcases/taskdefs/ant.xml
+++ b/src/etc/testcases/taskdefs/ant.xml
@@ -2,6 +2,13 @@
 
 <project name="ant-test" basedir="." default="test1">
 
+  <target name="cleanup">
+    <delete file="test1.log" />
+    <delete file="test2.log" />
+    <delete file="ant/test3.log" />
+    <delete file="ant/test4.log" />
+  </target>
+
   <target name="all" depends="test1,test2,test3,test4"/>
 
   <target name="test1">
@@ -67,4 +74,13 @@
     </ant>
   </target>
 
+  <target name="testLogfilePlacement">
+    <ant antfile="ant.xml" target="dummy" output="test1.log"
+         inheritall="false" />
+    <ant antfile="ant.xml" target="dummy" output="test2.log" />
+    <ant antfile="ant.xml" target="dummy" output="test3.log"
+         inheritall="false" dir="ant" />
+    <ant antfile="ant.xml" target="dummy" output="test4.log" 
+         dir="ant" />
+  </target>
 </project>
diff --git a/src/main/org/apache/tools/ant/taskdefs/Ant.java b/src/main/org/apache/tools/ant/taskdefs/Ant.java
index e960337d1..748f57105 100644
--- a/src/main/org/apache/tools/ant/taskdefs/Ant.java
+++ b/src/main/org/apache/tools/ant/taskdefs/Ant.java
@@ -105,7 +105,6 @@ public class Ant extends Task {
     
     /** the output */
     private String output  = null;
-    private String outfile = null;
     
     /** should we inherit properties from the parent ? */
     private boolean inheritAll = true;
@@ -175,9 +174,11 @@ public class Ant extends Task {
         }
 
         if (output != null) {
+            File outfile = null;
             if (dir != null) {
-                File file = FileUtils.newFileUtils().resolveFile(dir, output);
-                outfile = file.getAbsolutePath();
+                outfile = FileUtils.newFileUtils().resolveFile(dir, output);
+            } else {
+                outfile = getProject().resolveFile(output);
             }
             try {
                 PrintStream out = new PrintStream(new FileOutputStream(outfile));
diff --git a/src/testcases/org/apache/tools/ant/taskdefs/AntTest.java b/src/testcases/org/apache/tools/ant/taskdefs/AntTest.java
index 4bb6b9534..97ffc5c73 100644
--- a/src/testcases/org/apache/tools/ant/taskdefs/AntTest.java
+++ b/src/testcases/org/apache/tools/ant/taskdefs/AntTest.java
@@ -1,7 +1,7 @@
 /*
  * The Apache Software License, Version 1.1
  *
- * Copyright (c) 2000-2001 The Apache Software Foundation.  All rights
+ * Copyright (c) 2000-2002 The Apache Software Foundation.  All rights
  * reserved.
  *
  * Redistribution and use in source and binary forms, with or without
@@ -78,6 +78,10 @@ public class AntTest extends BuildFileTest {
         configureProject("src/etc/testcases/taskdefs/ant.xml");
     }
     
+    public void tearDown() {
+        executeTarget("cleanup");
+    }
+
     public void test1() { 
         expectBuildException("test1", "recursive call");
     }
@@ -213,6 +217,26 @@ public class AntTest extends BuildFileTest {
         project.removeBuildListener(rc);
     }
 
+    public void testLogfilePlacement() {
+        File[] logFiles = new File[] {
+            getProject().resolveFile("test1.log"),
+            getProject().resolveFile("test2.log"),
+            getProject().resolveFile("ant/test3.log"),
+            getProject().resolveFile("ant/test3.log")
+        };
+        for (int i=0; i<logFiles.length; i++) {
+            assertTrue(logFiles[i].getName()+" doesn\'t exist",
+                       !logFiles[i].exists());
+        }
+        
+        executeTarget("testLogfilePlacement");
+
+        for (int i=0; i<logFiles.length; i++) {
+            assertTrue(logFiles[i].getName()+" exists",
+                       logFiles[i].exists());
+        }
+    }
+
     private class BasedirChecker implements BuildListener {
         private String[] expectedBasedirs;
         private int calls = 0;
@@ -232,8 +256,13 @@ public class AntTest extends BuildFileTest {
         public void targetStarted(BuildEvent event) {
             if (error == null) {
                 try {
-                    assertEquals(expectedBasedirs[calls++],
-                                 event.getProject().getBaseDir().getAbsolutePath());
+                    if (calls == expectedBasedirs.length) {
+                        assertEquals("cleanup",
+                                     event.getTarget().getName());
+                    } else {
+                        assertEquals(expectedBasedirs[calls++],
+                                     event.getProject().getBaseDir().getAbsolutePath());
+                    }
                 } catch (AssertionFailedError e) {
                     error = e;
                 }