diff --git a/WHATSNEW b/WHATSNEW
index 184a5de74..8fe91d57e 100644
--- a/WHATSNEW
+++ b/WHATSNEW
@@ -169,6 +169,9 @@ Other changes:
 
 * Support for HP's NonStop (Tandem) OS has been added.
 
+* <cab>'s basedir attribute is now optional if you specify nested
+  filesets.  Bugzilla Report 18046.
+
 Changes from Ant 1.5.2 to Ant 1.5.3
 ===================================
 
diff --git a/docs/manual/OptionalTasks/cab.html b/docs/manual/OptionalTasks/cab.html
index 583e6d85a..307949732 100644
--- a/docs/manual/OptionalTasks/cab.html
+++ b/docs/manual/OptionalTasks/cab.html
@@ -39,7 +39,7 @@ supports all attributes of <code>&lt;fileset&gt;</code>
   <tr>
     <td valign="top">basedir</td>
     <td valign="top">the directory to start archiving files from.</td>
-    <td valign="top" align="center">Yes</td>
+    <td valign="top" align="center">No</td>
   </tr>
   <tr>
     <td valign="top">verbose</td>
@@ -91,6 +91,13 @@ supports all attributes of <code>&lt;fileset&gt;</code>
     <td valign="top" align="center">No</td>
   </tr>
 </table>
+<h3>Parameters specified as nested elements</h3>
+<h4>fileset</h4>
+
+<p>The cab task supports any number of nested <a
+href="../CoreTypes/fileset.html"><code>&lt;fileset&gt;</code></a>
+elements to specify the files to be included in the archive.</p>
+
 <h3>Examples</h3>
 <blockquote><pre>
 &lt;cab cabfile=&quot;${dist}/manual.cab&quot;
@@ -121,8 +128,21 @@ manual.cab in the ${dist} directory. Only html files under the
 directory api are archived, and files with the name todo.html are
 excluded. Output from the cabarc tool is displayed in the build
 output.</p>
+
+<blockquote><pre>
+&lt;cab cabfile=&quot;${dist}/manual.cab&quot;
+     verbose=&quot;yes&quot;&gt;
+  &lt;fileset
+       dir=&quot;htdocs/manual&quot;
+       includes=&quot;api/**/*.html&quot;
+       excludes=&quot;**/todo.html&quot;
+  /&gt;
+&lt;/cab&gt;
+</pre></blockquote>
+<p>is equivalent to the example above.</p>
+
 <hr>
-<p align="center">Copyright &copy; 2000-2002 Apache Software Foundation. All rights
+<p align="center">Copyright &copy; 2000-2003 Apache Software Foundation. All rights
 Reserved.</p>
 
 </body>
diff --git a/src/main/org/apache/tools/ant/taskdefs/optional/Cab.java b/src/main/org/apache/tools/ant/taskdefs/optional/Cab.java
index 235f41bc9..dd564a408 100644
--- a/src/main/org/apache/tools/ant/taskdefs/optional/Cab.java
+++ b/src/main/org/apache/tools/ant/taskdefs/optional/Cab.java
@@ -1,7 +1,7 @@
 /*
  * The Apache Software License, Version 1.1
  *
- * Copyright (c) 2000-2002 The Apache Software Foundation.  All rights
+ * Copyright (c) 2000-2003 The Apache Software Foundation.  All rights
  * reserved.
  *
  * Redistribution and use in source and binary forms, with or without
@@ -143,14 +143,17 @@ public class Cab extends MatchingTask {
      * for side-effects to me...
      */
     protected void checkConfiguration() throws BuildException {
-        if (baseDir == null) {
-            throw new BuildException("basedir attribute must be set!", getLocation());
+        if (baseDir == null && filesets.size() == 0) {
+            throw new BuildException("basedir attribute or at least one "
+                                     + "nested filest is required!", 
+                                     getLocation());
         }
-        if (!baseDir.exists()) {
+        if (baseDir != null && !baseDir.exists()) {
             throw new BuildException("basedir does not exist!", getLocation());
         }
         if (cabFile == null) {
-            throw new BuildException("cabfile attribute must be set!" , getLocation());
+            throw new BuildException("cabfile attribute must be set!",
+                                     getLocation());
         }
     }
 
@@ -175,7 +178,7 @@ public class Cab extends MatchingTask {
         boolean upToDate = true;
         for (int i = 0; i < files.size() && upToDate; i++) {
             String file = files.elementAt(i).toString();
-            if (new File(baseDir, file).lastModified() >
+            if (fileUtils.resolveFile(baseDir, file).lastModified() >
                 cabFile.lastModified()) {
                 upToDate = false;
             }
@@ -220,16 +223,16 @@ public class Cab extends MatchingTask {
     protected Vector getFileList() throws BuildException {
         Vector files = new Vector();
 
-        if (filesets.size() == 0) {
+        if (baseDir != null) {
             // get files from old methods - includes and nested include
             appendFiles(files, super.getDirectoryScanner(baseDir));
-        } else {
-            // get files from filesets
-            for (int i = 0; i < filesets.size(); i++) {
-                FileSet fs = (FileSet) filesets.elementAt(i);
-                if (fs != null) {
-                    appendFiles(files, fs.getDirectoryScanner(getProject()));
-                }
+        }
+
+        // get files from filesets
+        for (int i = 0; i < filesets.size(); i++) {
+            FileSet fs = (FileSet) filesets.elementAt(i);
+            if (fs != null) {
+                appendFiles(files, fs.getDirectoryScanner(getProject()));
             }
         }
 
@@ -264,7 +267,9 @@ public class Cab extends MatchingTask {
             try {
                 Process p = Execute.launch(getProject(),
                                            new String[] {"listcab"}, null,
-                                           baseDir, true);
+                                           baseDir != null ? baseDir 
+                                                   : getProject().getBaseDir(),
+                                           true);
                 OutputStream out = p.getOutputStream();
 
                 // Create the stream pumpers to forward listcab's stdout and stderr to the log