diff --git a/CHANGES.txt b/CHANGES.txt
index d9d04e36ca7..84df59c3eed 100644
--- a/CHANGES.txt
+++ b/CHANGES.txt
@@ -31,6 +31,9 @@
 * Fixed :issue:`1769`. `pip wheel` now returns an error code if any wheels
   fail to build.
 
+* Fixed :issue:`1775`. `pip wheel` wasn't building wheels for dependencies of
+  editable requirements.
+
 
 **1.5.5 (2014-05-03)**
 
diff --git a/pip/cmdoptions.py b/pip/cmdoptions.py
index 93fa62dbdc6..08b6069f44c 100644
--- a/pip/cmdoptions.py
+++ b/pip/cmdoptions.py
@@ -9,7 +9,7 @@
 """
 import copy
 from optparse import OptionGroup, SUPPRESS_HELP, Option
-from pip.locations import build_prefix, default_log_file
+from pip.locations import build_prefix, default_log_file, src_prefix
 
 
 def make_option_group(group, parser):
@@ -286,6 +286,26 @@ def make(self):
     help='Install from the given requirements file. '
     'This option can be used multiple times.')
 
+editable = OptionMaker(
+    '-e', '--editable',
+    dest='editables',
+    action='append',
+    default=[],
+    metavar='path/url',
+    help=('Install a project in editable mode (i.e. setuptools '
+          '"develop mode") from a local project path or a VCS url.'),
+)
+
+src = OptionMaker(
+    '--src', '--source', '--source-dir', '--source-directory',
+    dest='src_dir',
+    metavar='dir',
+    default=src_prefix,
+    help='Directory to check out editable projects into. '
+    'The default in a virtualenv is "<venv path>/src". '
+    'The default for global installs is "<current dir>/src".'
+)
+
 use_wheel = OptionMaker(
     '--use-wheel',
     dest='use_wheel',
diff --git a/pip/commands/install.py b/pip/commands/install.py
index 850a6ff6768..55690990f96 100644
--- a/pip/commands/install.py
+++ b/pip/commands/install.py
@@ -4,7 +4,7 @@
 
 from pip.req import InstallRequirement, RequirementSet, parse_requirements
 from pip.log import logger
-from pip.locations import (src_prefix, virtualenv_no_global, distutils_scheme,
+from pip.locations import (virtualenv_no_global, distutils_scheme,
                            build_prefix)
 from pip.basecommand import Command
 from pip.index import PackageFinder
@@ -43,16 +43,7 @@ def __init__(self, *args, **kw):
 
         cmd_opts = self.cmd_opts
 
-        cmd_opts.add_option(
-            '-e', '--editable',
-            dest='editables',
-            action='append',
-            default=[],
-            metavar='path/url',
-            help=('Install a project in editable mode (i.e. setuptools '
-                  '"develop mode") from a local project path or a VCS url.'),
-        )
-
+        cmd_opts.add_option(cmdoptions.editable.make())
         cmd_opts.add_option(cmdoptions.requirements.make())
         cmd_opts.add_option(cmdoptions.build_dir.make())
 
@@ -73,15 +64,7 @@ def __init__(self, *args, **kw):
         )
 
         cmd_opts.add_option(cmdoptions.download_cache.make())
-
-        cmd_opts.add_option(
-            '--src', '--source', '--source-dir', '--source-directory',
-            dest='src_dir',
-            metavar='dir',
-            default=src_prefix,
-            help='Directory to check out editable projects into. '
-            'The default in a virtualenv is "<venv path>/src". '
-            'The default for global installs is "<current dir>/src".')
+        cmd_opts.add_option(cmdoptions.src.make())
 
         cmd_opts.add_option(
             '-U', '--upgrade',
diff --git a/pip/commands/wheel.py b/pip/commands/wheel.py
index ee755423864..c86d2af21b7 100644
--- a/pip/commands/wheel.py
+++ b/pip/commands/wheel.py
@@ -34,8 +34,8 @@ class WheelCommand(Command):
     usage = """
       %prog [options] <requirement specifier> ...
       %prog [options] -r <requirements file> ...
-      %prog [options] <vcs project url> ...
-      %prog [options] <local project path> ...
+      %prog [options] [-e] <vcs project url> ...
+      %prog [options] [-e] <local project path> ...
       %prog [options] <archive url/path> ..."""
 
     summary = 'Build wheels from your requirements.'
@@ -61,8 +61,10 @@ def __init__(self, *args, **kw):
             metavar='options',
             action='append',
             help="Extra arguments to be supplied to 'setup.py bdist_wheel'.")
+        cmd_opts.add_option(cmdoptions.editable.make())
         cmd_opts.add_option(cmdoptions.requirements.make())
         cmd_opts.add_option(cmdoptions.download_cache.make())
+        cmd_opts.add_option(cmdoptions.src.make())
         cmd_opts.add_option(cmdoptions.no_deps.make())
         cmd_opts.add_option(cmdoptions.build_dir.make())
 
@@ -158,7 +160,7 @@ def run(self, options, args):
         options.build_dir = os.path.abspath(options.build_dir)
         requirement_set = RequirementSet(
             build_dir=options.build_dir,
-            src_dir=None,
+            src_dir=options.src_dir,
             download_dir=None,
             download_cache=options.download_cache,
             ignore_dependencies=options.ignore_dependencies,
@@ -175,16 +177,19 @@ def run(self, options, args):
         for name in args:
             requirement_set.add_requirement(
                 InstallRequirement.from_line(name, None))
-
+        for name in options.editables:
+            requirement_set.add_requirement(
+                InstallRequirement.from_editable(
+                    name,
+                    default_vcs=options.default_vcs
+                )
+            )
         for filename in options.requirements:
             for req in parse_requirements(
                     filename,
                     finder=finder,
                     options=options,
                     session=session):
-                if req.editable:
-                    logger.notify("ignoring %s" % req.url)
-                    continue
                 requirement_set.add_requirement(req)
 
         # fail if no requirements
diff --git a/pip/wheel.py b/pip/wheel.py
index 81513c283ac..e4853950ee0 100644
--- a/pip/wheel.py
+++ b/pip/wheel.py
@@ -546,7 +546,16 @@ def build(self):
 
         reqset = self.requirement_set.requirements.values()
 
-        buildset = [req for req in reqset if not req.is_wheel]
+        buildset = []
+        for req in reqset:
+            if req.is_wheel:
+                logger.notify(
+                    'Skipping %s, due to already being wheel.' % req.name)
+            elif req.editable:
+                logger.notify(
+                    'Skipping %s, due to being editable' % req.name)
+            else:
+                buildset.append(req)
 
         if not buildset:
             return True
diff --git a/tests/data/src/requires_simple/requires_simple/__init__.py b/tests/data/src/requires_simple/requires_simple/__init__.py
new file mode 100644
index 00000000000..792d6005489
--- /dev/null
+++ b/tests/data/src/requires_simple/requires_simple/__init__.py
@@ -0,0 +1 @@
+#
diff --git a/tests/data/src/requires_simple/setup.py b/tests/data/src/requires_simple/setup.py
new file mode 100644
index 00000000000..3f7983b82c7
--- /dev/null
+++ b/tests/data/src/requires_simple/setup.py
@@ -0,0 +1,6 @@
+from setuptools import setup, find_packages
+
+setup(name='requires_simple',
+      version='0.1',
+      install_requires=['simple==1.0']
+      )
diff --git a/tests/functional/test_wheel.py b/tests/functional/test_wheel.py
index d6f51642e54..039fd50b1e6 100644
--- a/tests/functional/test_wheel.py
+++ b/tests/functional/test_wheel.py
@@ -1,14 +1,11 @@
 """'pip wheel' tests"""
 import os
-import sys
-import textwrap
 
 from os.path import exists
 
-from pip.download import path_to_url as path_to_url_d
 from pip.locations import write_delete_marker_file
 from pip.status_codes import PREVIOUS_BUILD_DIR_ERROR
-from tests.lib import pyversion, path_to_url
+from tests.lib import pyversion
 
 
 def test_pip_wheel_fails_without_wheel(script, data):
@@ -50,6 +47,20 @@ def test_pip_wheel_downloads_wheels(script, data):
     assert "Saved" in result.stdout, result.stdout
 
 
+def test_pip_wheel_builds_editable_deps(script, data):
+    """
+    Test 'pip wheel' finds and builds dependencies of editables
+    """
+    script.pip('install', 'wheel')
+    editable_path = os.path.join(data.src, 'requires_simple')
+    result = script.pip(
+        'wheel', '--no-index', '-f', data.find_links, '-e', editable_path
+    )
+    wheel_file_name = 'simple-1.0-py%s-none-any.whl' % pyversion[0]
+    wheel_file_path = script.scratch / 'wheelhouse' / wheel_file_name
+    assert wheel_file_path in result.files_created, result.stdout
+
+
 def test_pip_wheel_fail(script, data):
     """
     Test 'pip wheel' failure.
@@ -70,38 +81,6 @@ def test_pip_wheel_fail(script, data):
     assert result.returncode != 0
 
 
-def test_pip_wheel_ignore_wheels_editables(script, data):
-    """
-    Test 'pip wheel' ignores editables
-    """
-    script.pip('install', 'wheel')
-
-    local_wheel = '%s/simple.dist-0.1-py2.py3-none-any.whl' % data.find_links
-    local_editable = data.packages.join("FSPkg")
-    script.scratch_path.join("reqs.txt").write(textwrap.dedent("""\
-        %s
-        -e %s
-        simple
-        """ % (local_wheel, local_editable)))
-    result = script.pip(
-        'wheel', '--no-index', '-f', data.find_links, '-r',
-        script.scratch_path / 'reqs.txt',
-    )
-    wheel_file_name = 'simple-3.0-py%s-none-any.whl' % pyversion[0]
-    wheel_file_path = script.scratch / 'wheelhouse' / wheel_file_name
-    assert wheel_file_path in result.files_created, (
-        wheel_file_path,
-        result.files_created,
-    )
-    assert "Successfully built simple" in result.stdout, result.stdout
-    assert "Failed to build" not in result.stdout, result.stdout
-    ignore_editable = "ignoring %s" % path_to_url(local_editable)
-    # TODO: understand this divergence
-    if sys.platform == 'win32':
-        ignore_editable = "ignoring %s" % path_to_url_d(local_editable)
-    assert ignore_editable in result.stdout, result.stdout
-
-
 def test_no_clean_option_blocks_cleaning_after_wheel(script, data):
     """
     Test --no-clean option blocks cleaning after wheel build
@@ -153,4 +132,4 @@ def test_pip_wheel_fail_cause_of_previous_build_dir(script, data):
     )
 
     # Then I see that the error code is the right one
-    assert result.returncode == PREVIOUS_BUILD_DIR_ERROR
+    assert result.returncode == PREVIOUS_BUILD_DIR_ERROR, result
diff --git a/tests/lib/__init__.py b/tests/lib/__init__.py
index 69c265126b1..2d2e77ef2bc 100644
--- a/tests/lib/__init__.py
+++ b/tests/lib/__init__.py
@@ -70,6 +70,10 @@ def packages2(self):
     def packages3(self):
         return self.root.join("packages3")
 
+    @property
+    def src(self):
+        return self.root.join("src")
+
     @property
     def indexes(self):
         return self.root.join("indexes")
diff --git a/tests/unit/test_wheel.py b/tests/unit/test_wheel.py
index 7e838872458..5b813a91597 100644
--- a/tests/unit/test_wheel.py
+++ b/tests/unit/test_wheel.py
@@ -2,7 +2,7 @@
 import os
 
 import pytest
-from mock import patch
+from mock import patch, Mock
 
 from pip._vendor import pkg_resources
 from pip import wheel
@@ -283,3 +283,28 @@ def test_dist_info_contains_empty_dir(self, data, tmpdir):
         self.assert_installed()
         assert not os.path.isdir(
             os.path.join(self.dest_dist_info, 'empty_dir'))
+
+
+class TestWheelBuilder(object):
+
+    @patch('pip.log.Logger.log')
+    @patch('pip.wheel.WheelBuilder._build_one')
+    def test_skip_building_wheels(self, mock_build_one, mock_log):
+        wheel_req = Mock(is_wheel=True, editable=False)
+        reqset = Mock(requirements=Mock(values=lambda: [wheel_req]))
+        wb = wheel.WheelBuilder(reqset, Mock(), '/wheel/dir')
+        wb.build()
+        name, args, kwargs = mock_log.mock_calls[0]
+        assert "due to already being wheel" in args[1]
+        assert mock_build_one.mock_calls == []
+
+    @patch('pip.log.Logger.log')
+    @patch('pip.wheel.WheelBuilder._build_one')
+    def test_skip_building_editables(self, mock_build_one, mock_log):
+        editable_req = Mock(editable=True, is_wheel=False)
+        reqset = Mock(requirements=Mock(values=lambda: [editable_req]))
+        wb = wheel.WheelBuilder(reqset, Mock(), '/wheel/dir')
+        wb.build()
+        name, args, kwargs = mock_log.mock_calls[0]
+        assert "due to being editable" in args[1]
+        assert mock_build_one.mock_calls == []