diff --git a/WHATSNEW b/WHATSNEW
index 22b734ce9..838b65e1c 100644
--- a/WHATSNEW
+++ b/WHATSNEW
@@ -423,6 +423,9 @@ Fixed bugs:
 * TarInputStream#read() wasn't implemented correctly.  Bugzilla Report
   34097.
 
+* <xslt> failed to process file-hierarchies of more than one level if
+  scanincludeddirectories was true.  Bugzilla Report 24866.
+
 Changes from Ant 1.6.1 to Ant 1.6.2
 ===================================
 
diff --git a/src/main/org/apache/tools/ant/taskdefs/XSLTProcess.java b/src/main/org/apache/tools/ant/taskdefs/XSLTProcess.java
index e5c622463..0fca74069 100644
--- a/src/main/org/apache/tools/ant/taskdefs/XSLTProcess.java
+++ b/src/main/org/apache/tools/ant/taskdefs/XSLTProcess.java
@@ -263,7 +263,8 @@ public class XSLTProcess extends MatchingTask implements XSLTLogger {
                 for (int j = 0; j < dirs.length; ++j) {
                     list = new File(baseDir, dirs[j]).list();
                     for (int i = 0; i < list.length; ++i) {
-                        process(baseDir, list[i], destDir, stylesheet);
+                        process(baseDir, dirs[j] + File.separator + list[i],
+                                destDir, stylesheet);
                     }
                 }
             }