diff --git a/compiler/frontend/src/org/jetbrains/kotlin/cfg/ControlFlowInformationProvider.kt b/compiler/frontend/src/org/jetbrains/kotlin/cfg/ControlFlowInformationProvider.kt
index def819a534a..deb53e970d5 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/cfg/ControlFlowInformationProvider.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/cfg/ControlFlowInformationProvider.kt
@@ -302,7 +302,6 @@ class ControlFlowInformationProvider private constructor(
     }
 
     private fun PropertyDescriptor.isDefinitelyInitialized(): Boolean {
-        if (isLateInit) return true
         if (trace.get(BACKING_FIELD_REQUIRED, this) ?: false) return false
         val property = DescriptorToSourceUtils.descriptorToDeclaration(this)
         if (property is KtProperty && property.hasDelegate()) return false
@@ -325,6 +324,10 @@ class ControlFlowInformationProvider private constructor(
             if (variableDescriptor !is PropertyDescriptor) {
                 variableDescriptor?.let { varWithUninitializedErrorGenerated.add(it) }
             }
+            else if (variableDescriptor.isLateInit) {
+                trace.record(MUST_BE_LATEINIT, variableDescriptor)
+                return
+            }
             when (variableDescriptor) {
                 is ValueParameterDescriptor ->
                     report(Errors.UNINITIALIZED_PARAMETER.on(element, variableDescriptor), ctxt)
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/BindingContext.java b/compiler/frontend/src/org/jetbrains/kotlin/resolve/BindingContext.java
index c999ece3325..2d95d8a4a58 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/BindingContext.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/BindingContext.java
@@ -204,6 +204,7 @@ public interface BindingContext {
         }
     };
     WritableSlice<PropertyDescriptor, Boolean> IS_UNINITIALIZED = Slices.createSimpleSetSlice();
+    WritableSlice<PropertyDescriptor, Boolean> MUST_BE_LATEINIT = Slices.createSimpleSetSlice();
 
     WritableSlice<KtLambdaExpression, Boolean> BLOCK = new SetSlice<KtLambdaExpression>(DO_NOTHING) {
         @Override
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt
index 4eeb316c76a..f975b1e2d27 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt
@@ -29,8 +29,7 @@ import org.jetbrains.kotlin.diagnostics.Errors.*
 import org.jetbrains.kotlin.lexer.KtTokens
 import org.jetbrains.kotlin.psi.*
 import org.jetbrains.kotlin.psi.psiUtil.visibilityModifier
-import org.jetbrains.kotlin.resolve.BindingContext.TYPE
-import org.jetbrains.kotlin.resolve.BindingContext.TYPE_PARAMETER
+import org.jetbrains.kotlin.resolve.BindingContext.*
 import org.jetbrains.kotlin.resolve.DescriptorUtils.classCanHaveAbstractMembers
 import org.jetbrains.kotlin.resolve.DescriptorUtils.classCanHaveOpenMembers
 import org.jetbrains.kotlin.types.*
@@ -670,7 +669,10 @@ class DeclarationsChecker(
                 trace.report(PROPERTY_WITH_NO_TYPE_NO_INITIALIZER.on(property))
             }
             if (backingFieldRequired && !inTrait && propertyDescriptor.isLateInit && !isUninitialized) {
-                trace.report(UNNECESSARY_LATEINIT.on(property))
+                if (trace[MUST_BE_LATEINIT, propertyDescriptor] ?: false) {}
+                else {
+                    trace.report(UNNECESSARY_LATEINIT.on(property))
+                }
             }
         }
     }
diff --git a/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.kt b/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.kt
new file mode 100644
index 00000000000..718684da9b5
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.kt
@@ -0,0 +1,6 @@
+class Test {
+    lateinit var someRunnable: Runnable
+    init {
+        someRunnable = Runnable { someRunnable.run() }
+    }
+}
diff --git a/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.txt b/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.txt
new file mode 100644
index 00000000000..ad0e3aed30c
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.txt
@@ -0,0 +1,9 @@
+package
+
+public final class Test {
+    public constructor Test()
+    public final lateinit var someRunnable: java.lang.Runnable
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitWithPlusAssign.kt b/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitWithPlusAssign.kt
index 1a7b5dd5573..332526497b9 100644
--- a/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitWithPlusAssign.kt
+++ b/compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitWithPlusAssign.kt
@@ -1,10 +1,8 @@
 class Foo {
-    // Erroneous case: after lateinit removal, we'll have error at 'bar += baz', not here
-    // However, looks like we must have error at 'bar += baz' even with lateinit
-    // because nobody can initialize this 'bar' before constructor is called
-    <!UNNECESSARY_LATEINIT!>lateinit<!> var bar: String
+    lateinit var bar: String
 
     constructor(baz: Int) {
+        // At best, we should have error here despite of lateinit
         bar += baz
     }
 }
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index c39697add0d..9d72fc44285 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -3890,6 +3890,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                     KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit"), Pattern.compile("^(.+)\\.kt$"), true);
                 }
 
+                @TestMetadata("lateinitRecursiveInLambda.kt")
+                public void testLateinitRecursiveInLambda() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitRecursiveInLambda.kt");
+                    doTest(fileName);
+                }
+
                 @TestMetadata("lateinitWithConstructor.kt")
                 public void testLateinitWithConstructor() throws Exception {
                     String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/controlFlowAnalysis/unnecessaryLateinit/lateinitWithConstructor.kt");