diff --git a/src/AddIns/BackendBindings/Ruby/RubyBinding/Project/Src/RubyTestRunnerApplication.cs b/src/AddIns/BackendBindings/Ruby/RubyBinding/Project/Src/RubyTestRunnerApplication.cs
index 7842a23c5a..1dbe4dcd25 100644
--- a/src/AddIns/BackendBindings/Ruby/RubyBinding/Project/Src/RubyTestRunnerApplication.cs
+++ b/src/AddIns/BackendBindings/Ruby/RubyBinding/Project/Src/RubyTestRunnerApplication.cs
@@ -11,6 +11,7 @@ using System.IO;
 using System.Text;
 using ICSharpCode.Core;
 using ICSharpCode.SharpDevelop.Dom;
+using ICSharpCode.SharpDevelop.Project;
 using ICSharpCode.UnitTesting;
 
 namespace ICSharpCode.RubyBinding
@@ -69,13 +70,19 @@ namespace ICSharpCode.RubyBinding
 		public ProcessStartInfo CreateProcessStartInfo(SelectedTests selectedTests)
 		{
 			consoleApplication.RubyScriptFileName = GetSharpDevelopTestRubyScriptFileName();
-			AddLoadPaths();
+			AddLoadPaths(selectedTests.Project);
 			consoleApplication.RubyScriptCommandLineArguments = GetCommandLineArguments(selectedTests);
 			consoleApplication.WorkingDirectory = selectedTests.Project.Directory;
 			return consoleApplication.GetProcessStartInfo();
 		}
 		
-		void AddLoadPaths()
+		void AddLoadPaths(IProject project)
+		{
+			AddLoadPathForRubyStandardLibrary();
+			AddLoadPathForReferencedProjects(project);
+		}
+		
+		void AddLoadPathForRubyStandardLibrary()
 		{
 			if (options.HasRubyLibraryPath) {
 				consoleApplication.AddLoadPath(options.RubyLibraryPath);
@@ -84,6 +91,17 @@ namespace ICSharpCode.RubyBinding
 			consoleApplication.AddLoadPath(testRunnerLoadPath);
 		}
 		
+		void AddLoadPathForReferencedProjects(IProject project)
+		{
+			foreach (ProjectItem item in project.Items) {
+				ProjectReferenceProjectItem projectRef = item as ProjectReferenceProjectItem;
+				if (projectRef != null) {
+					string directory = Path.GetDirectoryName(projectRef.FileName);
+					consoleApplication.AddLoadPath(directory);
+				}
+			}
+		}
+		
 		string GetSharpDevelopTestRubyScriptFileName()
 		{
 			string fileName = StringParser.Parse(@"${addinpath:ICSharpCode.RubyBinding}\TestRunner\sdtest.rb");
diff --git a/src/AddIns/BackendBindings/Ruby/RubyBinding/Test/Testing/RubyTestRunnerApplicationTests.cs b/src/AddIns/BackendBindings/Ruby/RubyBinding/Test/Testing/RubyTestRunnerApplicationTests.cs
index 725e58c7de..3e7dcd245f 100644
--- a/src/AddIns/BackendBindings/Ruby/RubyBinding/Test/Testing/RubyTestRunnerApplicationTests.cs
+++ b/src/AddIns/BackendBindings/Ruby/RubyBinding/Test/Testing/RubyTestRunnerApplicationTests.cs
@@ -11,6 +11,7 @@ using System.Diagnostics;
 using ICSharpCode.Core;
 using ICSharpCode.RubyBinding;
 using ICSharpCode.SharpDevelop.Dom;
+using ICSharpCode.SharpDevelop.Project;
 using ICSharpCode.UnitTesting;
 using NUnit.Framework;
 using RubyBinding.Tests.Testing;
@@ -125,5 +126,36 @@ namespace RubyBinding.Tests.Testing
 			
 			Assert.AreEqual(expectedCommandLine, processStartInfo.Arguments);
 		}
+		
+		[Test]
+		public void CreateProcessInfoReturnsCommandLineWithDirectoriesForReferencedProjects()
+		{
+			MockCSharpProject referencedProject = new MockCSharpProject();
+			referencedProject.FileName = @"c:\projects\rbproject\rbproject.rbproj";
+			
+			MockCSharpProject unitTestProject = new MockCSharpProject();
+			ProjectReferenceProjectItem projectRef = new ProjectReferenceProjectItem(unitTestProject, referencedProject);
+			projectRef.FileName = @"c:\projects\rbproject\pyproject.rbproj";
+			ProjectService.AddProjectItem(unitTestProject, projectRef);
+			
+			MockMethod method = MockMethod.CreateMockMethodWithoutAnyAttributes();
+			method.CompilationUnit.FileName = @"d:\mytest.rb";
+			FileProjectItem fileItem = new FileProjectItem(unitTestProject, ItemType.Compile);
+			fileItem.FileName = @"d:\mytest.rb";
+			ProjectService.AddProjectItem(unitTestProject, fileItem);
+			
+			SelectedTests tests = RubySelectedTestsHelper.CreateSelectedTests(unitTestProject);
+			ProcessStartInfo processStartInfo = GetProcessStartInfoFromTestRunnerApp(tests);
+						
+			string expectedCommandLine = 
+				"\"-Ic:\\rubybinding\\TestRunner\" " +
+				"\"-Ic:\\projects\\rbproject\" " +
+				"\"c:\\rubybinding\\TestRunner\\sdtest.rb\" " +
+				"-- " +
+				"\"results.txt\" " +
+				"\"temp.tmp\"";
+			
+			Assert.AreEqual(expectedCommandLine, processStartInfo.Arguments);
+		}
 	}
 }