diff --git a/lib/tests/Makefile.am b/lib/tests/Makefile.am
index 20e92dd32..1f1ac742c 100644
--- a/lib/tests/Makefile.am
+++ b/lib/tests/Makefile.am
@@ -5,7 +5,8 @@ LIBS=@CHECK_LIBS@  $(top_builddir)/lib/libmc.la
 
 TESTS = \
 	library_independ \
-	serialize
+	serialize \
+	x_basename
 
 check_PROGRAMS = $(TESTS)
 
@@ -14,3 +15,6 @@ library_independ_SOURCES = \
 
 serialize_SOURCES = \
 	serialize.c
+
+x_basename_SOURCES = \
+	x_basename.c
diff --git a/lib/tests/x_basename.c b/lib/tests/x_basename.c
new file mode 100644
index 000000000..1eb710e5f
--- /dev/null
+++ b/lib/tests/x_basename.c
@@ -0,0 +1,98 @@
+/* lib/vfs - x_basename() function testing
+
+   Copyright (C) 2011 Free Software Foundation, Inc.
+
+   Written by:
+    Slava Zanko <slavazanko@gmail.com>, 2011
+
+   This program is free software; you can redistribute it and/or
+   modify it under the terms of the GNU Library General Public License
+   as published by the Free Software Foundation; either version 2 of
+   the License, or (at your option) any later version.
+
+   This program is distributed in the hope that it will be useful,
+   but WITHOUT ANY WARRANTY; without even the implied warranty of
+   MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+   GNU Library General Public License for more details.
+
+   You should have received a copy of the GNU Library General Public
+   License along with this program; if not, write to the Free Software
+   Foundation, Inc., 51 Franklin Street, Fifth Floor, Boston, MA 02110-1301, USA.
+*/
+
+#define TEST_SUITE_NAME "/lib"
+
+#include <check.h>
+
+#include <stdio.h>
+
+#include "lib/global.h"
+#include "lib/strutil.h"
+#include "lib/util.h"
+
+
+static void
+setup (void)
+{
+}
+
+static void
+teardown (void)
+{
+}
+
+/* --------------------------------------------------------------------------------------------- */
+#define check_x_basename( input, etalon ) \
+{ \
+    result = x_basename ( input ); \
+    fail_unless(strcmp(result, etalon) == 0, \
+    "\ninput (%s)\nactial  (%s) not equal to\netalon (%s)", input, result, etalon); \
+}
+
+START_TEST (test_x_basename)
+{
+    const char *result;
+    check_x_basename ("/test/path/test2/path2", "path2");
+
+    check_x_basename ("/test/path/test2/path2#vfsprefix", "path2#vfsprefix");
+
+    check_x_basename ("/test/path/test2/path2/vfsprefix://", "path2/vfsprefix://");
+
+
+    check_x_basename ("/test/path/test2/path2/vfsprefix://subdir", "subdir");
+
+    check_x_basename ("/test/path/test2/path2/vfsprefix://subdir/", "subdir/");
+
+    check_x_basename ("/test/path/test2/path2/vfsprefix://subdir/subdir2", "subdir2");
+
+    check_x_basename ("/test/path/test2/path2/vfsprefix:///", "/");
+}
+END_TEST
+
+/* --------------------------------------------------------------------------------------------- */
+
+int
+main (void)
+{
+    int number_failed;
+
+    Suite *s = suite_create (TEST_SUITE_NAME);
+    TCase *tc_core = tcase_create ("Core");
+    SRunner *sr;
+
+    tcase_add_checked_fixture (tc_core, setup, teardown);
+
+    /* Add new tests here: *************** */
+    tcase_add_test (tc_core, test_x_basename);
+    /* *********************************** */
+
+    suite_add_tcase (s, tc_core);
+    sr = srunner_create (s);
+    srunner_set_log (sr, "x_basename.log");
+    srunner_run_all (sr, CK_NORMAL);
+    number_failed = srunner_ntests_failed (sr);
+    srunner_free (sr);
+    return (number_failed == 0) ? 0 : 1;
+}
+
+/* --------------------------------------------------------------------------------------------- */
diff --git a/lib/util.c b/lib/util.c
index 25e0f726c..3a93a0cef 100644
--- a/lib/util.c
+++ b/lib/util.c
@@ -668,16 +668,29 @@ extract_line (const char *s, const char *top)
 const char *
 x_basename (const char *s)
 {
-    const char *where;
+    const char *url_delim, *path_sep;
 
-    where = g_strrstr (s, VFS_PATH_URL_DELIMITER);
-    if (where == NULL)
-        return ((where = strrchr (s, PATH_SEP))) ? where + 1 : s;
+    url_delim = g_strrstr (s, VFS_PATH_URL_DELIMITER);
+    path_sep = strrchr (s, PATH_SEP);
 
-    while (--where > s && *where != PATH_SEP);
-    while (--where > s && *where != PATH_SEP);
+    if (url_delim == NULL
+        || url_delim < path_sep - strlen (VFS_PATH_URL_DELIMITER)
+        || url_delim - s + strlen (VFS_PATH_URL_DELIMITER) < strlen (s))
+    {
+        /* avoid trailing PATH_SEP, if present */
+        if (s[strlen (s) - 1] == PATH_SEP)
+        {
+            while (--path_sep > s && *path_sep != PATH_SEP);
+            return (path_sep != s) ? path_sep + 1 : s;
+        }
+        else
+            return (path_sep != NULL) ? path_sep + 1 : s;
+    }
 
-    return (where == s ) ? s: where + 1;
+    while (--url_delim > s && *url_delim != PATH_SEP);
+    while (--url_delim > s && *url_delim != PATH_SEP);
+
+    return (url_delim == s) ? s : url_delim + 1;
 }
 
 /* --------------------------------------------------------------------------------------------- */