diff --git a/.gitignore b/.gitignore
index 2b5ad6a1..7656807b 100644
--- a/.gitignore
+++ b/.gitignore
@@ -24,3 +24,6 @@ out/
 
 # Mac
 .DS_Store
+
+# Vim
+*.swp
diff --git a/src/main/scala-sbt-0.13/com/typesafe/sbteclipse/core/Eclipse.scala b/src/main/scala-sbt-0.13/com/typesafe/sbteclipse/core/Eclipse.scala
index 429a140c..308e045e 100644
--- a/src/main/scala-sbt-0.13/com/typesafe/sbteclipse/core/Eclipse.scala
+++ b/src/main/scala-sbt-0.13/com/typesafe/sbteclipse/core/Eclipse.scala
@@ -305,11 +305,17 @@ private object Eclipse extends EclipseSDTConfig {
       srcEntries <- srcEntriesIoSeq.toList.sequence;
       linkEntries <- srcLinkEntriesIoSeq.toList.sequence
     ) yield {
+      def classDirectory = srcEntries.flatMap { _.output }.distinct match {
+        case Nil =>
+          "bin"
+        case dir :: _ =>
+          dir
+      }
       val entries = srcEntries ++ linkEntries ++
         (projectDependencies map EclipseClasspathEntry.Project) ++
         (externalDependencies map libEntry(buildDirectory, baseDirectory, relativizeLibs, state)) ++
         (Seq(jreContainer) map EclipseClasspathEntry.Con) ++
-        (Seq("bin") map EclipseClasspathEntry.Output)
+        (Seq(classDirectory) map EclipseClasspathEntry.Output)
       <classpath>{ entries map (_.toXml) }</classpath>
     }
   }
diff --git a/src/main/scala-sbt-1.0/com/typesafe/sbteclipse/core/Eclipse.scala b/src/main/scala-sbt-1.0/com/typesafe/sbteclipse/core/Eclipse.scala
index fe34f9f6..bc206c14 100644
--- a/src/main/scala-sbt-1.0/com/typesafe/sbteclipse/core/Eclipse.scala
+++ b/src/main/scala-sbt-1.0/com/typesafe/sbteclipse/core/Eclipse.scala
@@ -305,11 +305,17 @@ private object Eclipse extends EclipseSDTConfig {
       srcEntries <- srcEntriesIoSeq.toList.sequence;
       linkEntries <- srcLinkEntriesIoSeq.toList.sequence
     ) yield {
+      def classDirectory = srcEntries.flatMap { _.output }.distinct match {
+        case Nil =>
+          "bin"
+        case dir :: _ =>
+          dir
+      }
       val entries = srcEntries ++ linkEntries ++
         (projectDependencies map EclipseClasspathEntry.Project) ++
         (externalDependencies map libEntry(buildDirectory, baseDirectory, relativizeLibs, state)) ++
         (Seq(jreContainer) map EclipseClasspathEntry.Con) ++
-        (Seq("bin") map EclipseClasspathEntry.Output)
+        (Seq(classDirectory) map EclipseClasspathEntry.Output)
       <classpath>{ entries map (_.toXml) }</classpath>
     }
   }
diff --git a/src/sbt-test/sbteclipse/02-contents/tasks.sbt b/src/sbt-test/sbteclipse/02-contents/tasks.sbt
index 79997097..9aab3b89 100644
--- a/src/sbt-test/sbteclipse/02-contents/tasks.sbt
+++ b/src/sbt-test/sbteclipse/02-contents/tasks.sbt
@@ -208,6 +208,8 @@ TaskKey[Unit]("verify-classpath-xml-subc") := {
     error("""Expected .classpath of subc project to contain <classpathentry kind="con" path="org.scala-ide.sdt.launching.SCALA_CONTAINER"/> """)
   if (!(classpath.child contains <classpathentry kind="lib" path="libs/my.jar"/>))
     error("""Expected .classpath of subc project to contain <classpathentry kind="lib" path="libs/my.jar"/>!""")
+  if (!(classpath.child contains <classpathentry kind="output" path=".target" />))
+    error("""Expected .classpath of subc project to contain <classpathentry kind="output" path=".target" /> """)
   if (!(project.child contains <foo bar="baz"/>))
     error("""Expected .project of subc project to contain <foo bar="baz"/>!""")
 }