diff --git a/HISTORY.rst b/HISTORY.rst
index 68c2dd16..52dcf346 100644
--- a/HISTORY.rst
+++ b/HISTORY.rst
@@ -8,6 +8,8 @@ Release History
   `platformio boards <http://docs.platformio.org/en/latest/userguide/cmd_boards.html>`__
   command which allows to return the output in `JSON <http://en.wikipedia.org/wiki/JSON>`_ format
   (`issue #42 <https://github.com/ivankravets/platformio/issues/42>`_)
+* Fixed an issue with the libraries that are git repositories (`issue #49 <https://github.com/ivankravets/platformio/issues/49>`_)
+
 
 0.10.2 (2015-01-06)
 -------------------
diff --git a/platformio/builder/tools/platformio.py b/platformio/builder/tools/platformio.py
index 732d71b8..10db16f4 100644
--- a/platformio/builder/tools/platformio.py
+++ b/platformio/builder/tools/platformio.py
@@ -139,7 +139,10 @@ def VariantDirRecursive(env, variant_dir, src_dir, duplicate=True):
         if not dirnames:
             continue
         for dn in dirnames:
-            env.VariantDir(join(variant_dir, dn), join(root, dn), duplicate)
+            source_dir = join(root, dn)
+            if ".git" in source_dir or ".svn" in source_dir:
+                continue
+            env.VariantDir(join(variant_dir, dn), source_dir, duplicate)
             variants.append(join(variant_dir, dn))
     return variants