diff --git a/build.xml b/build.xml
index 151ffa261..3914c3ade 100644
--- a/build.xml
+++ b/build.xml
@@ -32,6 +32,8 @@
   <property name="checkstyle.minimum.javaversion" value="1.4" />
   <property name="checkstyle.testinputs.minimum.javaversion" value="1.5" />
   <property name="version" value="4.0-beta5" />
+  <property name="testcases" value="**/*Test.java"/>
+
 
   <path id="build.classpath">
     <pathelement location="${antlr.jar}" />
@@ -405,8 +407,7 @@ For users of JDK 1.5 at least version 1.6.2 of Ant is required.
 
     <mkdir dir="${testreport.dir}"/>
     <property name="testinputs.dir"
-              location="src/testinputs/com/puppycrawl/tools/checkstyle"/>
-    <property name="testcases" value="**/*Test.java"/>
+              location="${basedir}/src/testinputs/com/puppycrawl/tools/checkstyle"/>
 
     <junit printsummary="yes"
            fork="yes"
@@ -416,6 +417,9 @@ For users of JDK 1.5 at least version 1.6.2 of Ant is required.
            failureProperty="tests.have.failed">
 
       <sysproperty key="testinputs.dir" value="${testinputs.dir}"/>
+      <sysproperty key="checkstyle.use.recursive.algorithm"
+                   value="${checkstyle.use.recursive.algorithm}"/>
+      <sysproperty key="checkstyle.root" value="${basedir}" />
 
       <sysproperty key="emma.coverage.out.file"
                    file="${emma.coverage.out.file}"
diff --git a/src/checkstyle/com/puppycrawl/tools/checkstyle/TreeWalker.java b/src/checkstyle/com/puppycrawl/tools/checkstyle/TreeWalker.java
index 820df7866..8401b64c5 100644
--- a/src/checkstyle/com/puppycrawl/tools/checkstyle/TreeWalker.java
+++ b/src/checkstyle/com/puppycrawl/tools/checkstyle/TreeWalker.java
@@ -125,12 +125,31 @@ public final class TreeWalker
     /** a factory for creating submodules (i.e. the Checks) */
     private ModuleFactory mModuleFactory;
 
+    /** contrals whether we should use recursive or iterative
+     * algorithm for tree processing.
+     */
+    private final boolean mRecursive;
+
     /**
      * Creates a new <code>TreeWalker</code> instance.
      */
     public TreeWalker()
     {
         setFileExtensions(new String[]{"java"});
+        // Tree walker can use two possible algorithms for
+        // tree processing (iterative and recursive.
+        // Recursive is default for now.
+        String recursive =
+            System.getProperty("checkstyle.use.recursive.algorithm", "true");
+        mRecursive = "true".equals(recursive);
+        if (mRecursive) {
+            Utils.getExceptionLogger()
+                .debug("TreeWalker uses recursive algorithm");
+        }
+        else {
+            Utils.getExceptionLogger()
+                .debug("TreeWalker uses iterative algorithm");
+        }
     }
 
     /** @param aTabWidth the distance between tab stops */
@@ -389,7 +408,12 @@ public final class TreeWalker
 
          // empty files are not flagged by javac, will yield aAST == null
         if (aAST != null) {
-            process(aAST);
+            if (useRecursiveAlgorithm()) {
+                processRec(aAST);
+            }
+            else {
+                processIter(aAST);
+            }
         }
 
         notifyEnd(aAST);
@@ -426,9 +450,10 @@ public final class TreeWalker
 
     /**
      * Recursively processes a node calling interested checks at each node.
+     * Uses recursive algorithm.
      * @param aAST the node to start from
      */
-    private void process(DetailAST aAST)
+    private void processRec(DetailAST aAST)
     {
         if (aAST == null) {
             return;
@@ -438,16 +463,15 @@ public final class TreeWalker
 
         final DetailAST child = (DetailAST) aAST.getFirstChild();
         if (child != null) {
-            process(child);
+            processRec(child);
         }
 
         notifyLeave(aAST);
 
         final DetailAST sibling = (DetailAST) aAST.getNextSibling();
         if (sibling != null) {
-            process(sibling);
+            processRec(sibling);
         }
-
     }
 
     /**
@@ -570,4 +594,34 @@ public final class TreeWalker
         super.destroy();
     }
 
+    /**
+     * @return true if we should use recursive algorithm
+     *         for tree processing, false for iterative one.
+     */
+    private boolean useRecursiveAlgorithm()
+    {
+        return mRecursive;
+    }
+
+    /**
+     * Processes a node calling interested checks at each node.
+     * Uses iterative algorithm.
+     * @param aRoot the root of tree for process
+     */
+    private void processIter(DetailAST aRoot)
+    {
+        DetailAST curNode = aRoot;
+        while (curNode != null) {
+            notifyVisit(curNode);
+            DetailAST toVisit = (DetailAST) curNode.getFirstChild();
+            while (curNode != null && toVisit == null) {
+                notifyLeave(curNode);
+                toVisit = (DetailAST) curNode.getNextSibling();
+                if (toVisit == null) {
+                    curNode = curNode.getParent();
+                }
+            }
+            curNode = toVisit;
+        }
+    }
 }
diff --git a/src/tests/com/puppycrawl/tools/checkstyle/PackageNamesLoaderTest.java b/src/tests/com/puppycrawl/tools/checkstyle/PackageNamesLoaderTest.java
index 5070090ca..e2083d8e5 100644
--- a/src/tests/com/puppycrawl/tools/checkstyle/PackageNamesLoaderTest.java
+++ b/src/tests/com/puppycrawl/tools/checkstyle/PackageNamesLoaderTest.java
@@ -42,7 +42,8 @@ public class PackageNamesLoaderTest extends TestCase
     {
         final ModuleFactory moduleFactory =
             PackageNamesLoader.loadModuleFactory(
-                "src/checkstyle/com/puppycrawl/tools/checkstyle/checkstyle_packages.xml");
+                System.getProperty("checkstyle.root")
+                + "/src/checkstyle/com/puppycrawl/tools/checkstyle/checkstyle_packages.xml");
         validateFactory(moduleFactory);
     }
 
diff --git a/src/tests/com/puppycrawl/tools/checkstyle/filters/SuppressionsLoaderTest.java b/src/tests/com/puppycrawl/tools/checkstyle/filters/SuppressionsLoaderTest.java
index 82cdc5004..dd8641833 100644
--- a/src/tests/com/puppycrawl/tools/checkstyle/filters/SuppressionsLoaderTest.java
+++ b/src/tests/com/puppycrawl/tools/checkstyle/filters/SuppressionsLoaderTest.java
@@ -17,7 +17,8 @@ public class SuppressionsLoaderTest extends TestCase
     {
         final FilterSet fc =
             SuppressionsLoader.loadSuppressions(
-                "src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_none.xml");
+                System.getProperty("testinputs.dir")
+                + "/suppressions_none.xml");
         final FilterSet fc2 = new FilterSet();
         assertEquals(fc, fc2);
     }
@@ -27,7 +28,8 @@ public class SuppressionsLoaderTest extends TestCase
     {
         final FilterSet fc =
             SuppressionsLoader.loadSuppressions(
-                "src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_multiple.xml");
+                System.getProperty("testinputs.dir")
+                + "/suppressions_multiple.xml");
         final FilterSet fc2 = new FilterSet();
         SuppressElement se0 = new SuppressElement("file0", "check0");
         fc2.addFilter(se0);
@@ -47,13 +49,14 @@ public class SuppressionsLoaderTest extends TestCase
     public void testNoFile()
         throws CheckstyleException
     {
+        final String fn = System.getProperty("testinputs.dir")
+            + "/suppressions_no_file.xml";
         try {
-            SuppressionsLoader.loadSuppressions(
-                "src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_no_file.xml");
+            SuppressionsLoader.loadSuppressions(fn);
         }
         catch (CheckstyleException ex) {
             assertEquals(
-                "unable to parse src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_no_file.xml - Attribute \"files\" is required and must be specified for element type \"suppress\".",
+                "unable to parse " + fn + " - Attribute \"files\" is required and must be specified for element type \"suppress\".",
                 ex.getMessage());
         }
     }
@@ -61,13 +64,14 @@ public class SuppressionsLoaderTest extends TestCase
     public void testNoCheck()
         throws CheckstyleException
     {
+        final String fn = System.getProperty("testinputs.dir")
+            + "/suppressions_no_check.xml";
         try {
-            SuppressionsLoader.loadSuppressions(
-                "src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_no_check.xml");
+            SuppressionsLoader.loadSuppressions(fn);
         }
         catch (CheckstyleException ex) {
             assertEquals(
-                "unable to parse src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_no_check.xml - Attribute \"checks\" is required and must be specified for element type \"suppress\".",
+                "unable to parse " + fn + " - Attribute \"checks\" is required and must be specified for element type \"suppress\".",
                 ex.getMessage());
         }
     }
@@ -75,14 +79,15 @@ public class SuppressionsLoaderTest extends TestCase
     public void testBadInt()
         throws CheckstyleException
     {
+        final String fn = System.getProperty("testinputs.dir")
+            + "/suppressions_bad_int.xml";
         try {
-            SuppressionsLoader.loadSuppressions(
-                "src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_bad_int.xml");
+            SuppressionsLoader.loadSuppressions(fn);
         }
         catch (CheckstyleException ex) {
             assertTrue(
                 ex.getMessage(),
-                ex.getMessage().startsWith("number format exception src/testinputs/com/puppycrawl/tools/checkstyle/suppressions_bad_int.xml - "));
+                ex.getMessage().startsWith("number format exception " + fn + " - "));
         }
     }
 }