diff --git a/backends.py b/backends.py
index 6d6f68b45..1c8844be1 100755
--- a/backends.py
+++ b/backends.py
@@ -90,13 +90,16 @@ class Backend():
         obj_list = []
         if target.has_pch():
             self.generate_pch(target, outfile)
-        for src in target.get_sources():
-            if not self.environment.is_header(src):
-                obj_list.append(self.generate_single_compile(target, outfile, src))
+        header_deps = []
         for genlist in target.get_generated_sources():
             for src in genlist.get_outfilelist():
                 if not self.environment.is_header(src):
                     obj_list.append(self.generate_single_compile(target, outfile, src, True))
+                else:
+                    header_deps.append(src)
+        for src in target.get_sources():
+            if not self.environment.is_header(src):
+                obj_list.append(self.generate_single_compile(target, outfile, src, False, header_deps))
         elem = self.generate_link(target, outfile, outname, obj_list)
         self.generate_shlib_aliases(target, self.get_target_dir(target), outfile, elem)
         self.processed_targets[name] = True
@@ -429,7 +432,7 @@ class NinjaBackend(Backend):
             base_args = generator.get_arglist()
             for i in range(len(infilelist)):
                 infilename = os.path.join(self.build_to_src, infilelist[i])
-                outfilename = os.path.join(self.get_target_dir(target), outfilelist[i])
+                outfilename = os.path.join(self.get_target_private_dir(target), outfilelist[i])
                 args = [x.replace("@INPUT@", infilename).replace('@OUTPUT@', outfilename)\
                         for x in base_args]
                 cmdlist = [exe_file] + args
@@ -438,11 +441,12 @@ class NinjaBackend(Backend):
                 elem.add_item('COMMAND', cmdlist)
                 elem.write(outfile)
 
-    def generate_single_compile(self, target, outfile, src, is_generated=False):
+    def generate_single_compile(self, target, outfile, src, is_generated=False, header_deps=[]):
         compiler = self.get_compiler_for_source(src)
         commands = self.generate_basic_compiler_flags(target, compiler)
+        commands.append(compiler.get_include_arg(self.get_target_private_dir(target)))
         if is_generated:
-            abs_src = src
+            abs_src = os.path.join(self.get_target_private_dir(target), src)
         else:
             abs_src = os.path.join(self.build_to_src, target.get_source_subdir(), src)
         abs_obj = os.path.join(self.get_target_private_dir(target), src)
@@ -471,6 +475,8 @@ class NinjaBackend(Backend):
         compiler_name = '%s_COMPILER' % compiler.get_language()
 
         element = NinjaBuildElement(abs_obj, compiler_name, abs_src)
+        if len(header_deps) > 0:
+            element.add_dep([os.path.join(self.get_target_private_dir(target), d) for d in header_deps])
         element.add_orderdep(pch_dep)
         element.add_item('DEPFILE', dep_file)
         element.add_item('FLAGS', commands)
diff --git a/meson_test.py b/meson_test.py
index 2cea912d2..98927e4f1 100755
--- a/meson_test.py
+++ b/meson_test.py
@@ -25,8 +25,8 @@ def run_tests(datafilename):
         (stdo, stde) = p.communicate()
         if p.returncode != 0:
             print('Error running test.')
-            print('Stdout:\n' + stdo)
-            print('Stderr:\n' + stde)
+            print('Stdout:\n' + stdo.decode())
+            print('Stderr:\n' + stde.decode())
             sys.exit(1)
         print('Test "%s": OK' % line)
 
diff --git a/test cases/31 generate header/input_src.dat b/test cases/31 generate header/input_src.dat
new file mode 100644
index 000000000..354499acd
--- /dev/null
+++ b/test cases/31 generate header/input_src.dat	
@@ -0,0 +1 @@
+#include<stdio.h>
diff --git a/test cases/31 generate header/meson.build b/test cases/31 generate header/meson.build
new file mode 100644
index 000000000..1948eeb6c
--- /dev/null
+++ b/test cases/31 generate header/meson.build	
@@ -0,0 +1,13 @@
+project('pipeline test', 'c')
+
+e1 = executable('srcgen', 'srcgen.c')
+
+gen = generator(e1, \
+ output_name  : '@BASENAME@.h', \
+ arguments : ['@INPUT@', '@OUTPUT@'])
+
+generated = gen.process('input_src.dat')
+
+e2 = executable('prog', 'prog.c', generated)
+
+add_test('pipelined', e2)
\ No newline at end of file
diff --git a/test cases/31 generate header/prog.c b/test cases/31 generate header/prog.c
new file mode 100644
index 000000000..34294816b
--- /dev/null
+++ b/test cases/31 generate header/prog.c	
@@ -0,0 +1,9 @@
+#include"input_src.dat.h"
+
+int main(int argc, char **argv) {
+    void *foo = printf;
+    if(foo) {
+        return 0;
+    }
+    return 1;
+}
diff --git a/test cases/31 generate header/srcgen.c b/test cases/31 generate header/srcgen.c
new file mode 100644
index 000000000..c4e412bef
--- /dev/null
+++ b/test cases/31 generate header/srcgen.c	
@@ -0,0 +1,33 @@
+#include<stdio.h>
+#include<assert.h>
+
+int main(int argc, char **argv) {
+    const int ARRSIZE = 80;
+    char arr[ARRSIZE];
+    if(argc != 3) {
+        fprintf(stderr, "%s <input file> <output file>\n", argv[0]);
+        return 1;
+    }
+    char *ifilename = argv[1];
+    char *ofilename = argv[2];
+    printf("%s\n", ifilename);
+    FILE *ifile = fopen(ifilename, "r");
+    if(!ifile) {
+        fprintf(stderr, "Could not open source file %s.\n", ifilename);
+        return 1;
+    }
+    FILE *ofile = fopen(ofilename, "w");
+    if(!ofile) {
+        fprintf(stderr, "Could not open target file %s\n", ofilename);
+        return 1;
+    }
+    size_t bytes;
+    bytes = fread(arr, 1, ARRSIZE, ifile);
+    assert(bytes < 80);
+    assert(bytes > 0);
+    fwrite(arr, 1, bytes, ofile);
+
+    fclose(ifile);
+    fclose(ofile);
+    return 0;
+}