diff --git a/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceParameter/KotlinIntroduceParameterHandler.kt b/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceParameter/KotlinIntroduceParameterHandler.kt
index ee5fece9b89..3b10f43df59 100644
--- a/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceParameter/KotlinIntroduceParameterHandler.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/refactoring/introduce/introduceParameter/KotlinIntroduceParameterHandler.kt
@@ -36,6 +36,7 @@ import org.jetbrains.kotlin.idea.caches.resolve.resolveToDescriptor
 import org.jetbrains.kotlin.idea.core.KotlinNameSuggester
 import org.jetbrains.kotlin.idea.core.NewDeclarationNameValidator
 import org.jetbrains.kotlin.idea.core.getResolutionScope
+import org.jetbrains.kotlin.idea.core.moveInsideParenthesesAndReplaceWith
 import org.jetbrains.kotlin.idea.core.refactoring.runRefactoringWithPostprocessing
 import org.jetbrains.kotlin.idea.refactoring.JetRefactoringBundle
 import org.jetbrains.kotlin.idea.refactoring.changeSignature.*
@@ -268,7 +269,10 @@ public open class KotlinIntroduceParameterHandler(
                 null,
                 fun() {
                     val isTestMode = ApplicationManager.getApplication().isUnitTestMode()
-                    val inplaceIsAvailable = editor.getSettings().isVariableInplaceRenameEnabled() && !isTestMode
+                    val haveLambdaArgumentsToReplace = occurrencesToReplace.any {
+                        it.elements.any { it is JetFunctionLiteralExpression && it.parent is JetFunctionLiteralArgument }
+                    }
+                    val inplaceIsAvailable = editor.settings.isVariableInplaceRenameEnabled && !isTestMode && !haveLambdaArgumentsToReplace
 
                     val originalExpression = JetPsiUtil.safeDeparenthesize(expression)
                     val psiFactory = JetPsiFactory(project)
@@ -285,7 +289,16 @@ public open class KotlinIntroduceParameterHandler(
                                             parametersUsages = parametersUsages,
                                             occurrencesToReplace = occurrencesToReplace,
                                             occurrenceReplacer = {
-                                                it.elements.single().replace(psiFactory.createExpression(newParameterName))
+                                                val expressionToReplace = it.elements.single() as JetExpression
+                                                val replacingExpression = psiFactory.createExpression(newParameterName)
+                                                if (expressionToReplace.isFunctionLiteralOutsideParentheses()) {
+                                                    expressionToReplace
+                                                            .getStrictParentOfType<JetFunctionLiteralArgument>()!!
+                                                            .moveInsideParenthesesAndReplaceWith(replacingExpression, context)
+                                                }
+                                                else {
+                                                    expressionToReplace.replace(replacingExpression)
+                                                }
                                             }
                                     )
                             )
diff --git a/idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt b/idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt
new file mode 100644
index 00000000000..ea1a8ba2f37
--- /dev/null
+++ b/idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt
@@ -0,0 +1,2 @@
+// WITH_RUNTIME
+fun foo(list: List<String>) = list.filter <selection>{ it.length() > 6 }</selection>
\ No newline at end of file
diff --git a/idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt.after b/idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt.after
new file mode 100644
index 00000000000..68abb9310bb
--- /dev/null
+++ b/idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt.after
@@ -0,0 +1,2 @@
+// WITH_RUNTIME
+fun foo(list: List<String>, function: () -> (String) -> Boolean = { { it.length() > 6 } }) = list.filter(function())
\ No newline at end of file
diff --git a/idea/testData/refactoring/introduceParameter/lambdaArgument.kt b/idea/testData/refactoring/introduceParameter/lambdaArgument.kt
new file mode 100644
index 00000000000..ea1a8ba2f37
--- /dev/null
+++ b/idea/testData/refactoring/introduceParameter/lambdaArgument.kt
@@ -0,0 +1,2 @@
+// WITH_RUNTIME
+fun foo(list: List<String>) = list.filter <selection>{ it.length() > 6 }</selection>
\ No newline at end of file
diff --git a/idea/testData/refactoring/introduceParameter/lambdaArgument.kt.after b/idea/testData/refactoring/introduceParameter/lambdaArgument.kt.after
new file mode 100644
index 00000000000..a642c6a90be
--- /dev/null
+++ b/idea/testData/refactoring/introduceParameter/lambdaArgument.kt.after
@@ -0,0 +1,2 @@
+// WITH_RUNTIME
+fun foo(list: List<String>, function: (String) -> Boolean = { it.length() > 6 }) = list.filter(function)
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java
index c2ac4eefee6..aecaae99df2 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/refactoring/introduce/JetExtractionTestGenerated.java
@@ -2749,6 +2749,12 @@ public class JetExtractionTestGenerated extends AbstractJetExtractionTest {
             doIntroduceSimpleParameterTest(fileName);
         }
 
+        @TestMetadata("lambdaArgument.kt")
+        public void testLambdaArgument() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/introduceParameter/lambdaArgument.kt");
+            doIntroduceSimpleParameterTest(fileName);
+        }
+
         @TestMetadata("localVar.kt")
         public void testLocalVar() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/introduceParameter/localVar.kt");
@@ -2890,6 +2896,12 @@ public class JetExtractionTestGenerated extends AbstractJetExtractionTest {
             JetTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("idea/testData/refactoring/introduceLambdaParameter"), Pattern.compile("^(.+)\\.kt$"), true);
         }
 
+        @TestMetadata("lambdaArgument.kt")
+        public void testLambdaArgument() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/introduceLambdaParameter/lambdaArgument.kt");
+            doIntroduceLambdaParameterTest(fileName);
+        }
+
         @TestMetadata("lambdaParamInPrimaryConstructor.kt")
         public void testLambdaParamInPrimaryConstructor() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/introduceLambdaParameter/lambdaParamInPrimaryConstructor.kt");