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The news is on the street: SpringSource has been working with Google in secret to ensure that Groovy would run on Google App Engine Java! We've released Groovy 1.6.1 just in time, with key patches to ensure that Groovy would be working as expected, under the strict security constraints imposed by the platform.

You can have a look at this tutorial on how to write and deploy a Groovy application on App Engine.

Have fun!