diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/LateinitModifierApplicabilityChecker.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/LateinitModifierApplicabilityChecker.kt
index 5c1d0da97fa..04164a4174a 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/LateinitModifierApplicabilityChecker.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/LateinitModifierApplicabilityChecker.kt
@@ -45,9 +45,12 @@ object LateinitModifierApplicabilityChecker {
             trace.report(Errors.INAPPLICABLE_LATEINIT_MODIFIER.on(modifier, "is allowed only on mutable $variables"))
         }
 
-        if (TypeUtils.isNullableType(type)) {
+        if (type.isMarkedNullable) {
             trace.report(Errors.INAPPLICABLE_LATEINIT_MODIFIER.on(modifier, "is not allowed on $variables of nullable types"))
         }
+        else if (TypeUtils.isNullableType(type)) {
+            trace.report(Errors.INAPPLICABLE_LATEINIT_MODIFIER.on(modifier, "is not allowed on $variables of a type with nullable upper bound"))
+        }
 
         if (KotlinBuiltIns.isPrimitiveType(type)) {
             trace.report(Errors.INAPPLICABLE_LATEINIT_MODIFIER.on(modifier, "is not allowed on $variables of primitive types"))
diff --git a/idea/testData/checker/diagnosticsMessage/lateinitOfATypeWithNullableUpperBound.kt b/idea/testData/checker/diagnosticsMessage/lateinitOfATypeWithNullableUpperBound.kt
new file mode 100644
index 00000000000..fed09f7e74c
--- /dev/null
+++ b/idea/testData/checker/diagnosticsMessage/lateinitOfATypeWithNullableUpperBound.kt
@@ -0,0 +1,3 @@
+class C<V>() {
+    <error descr="[INAPPLICABLE_LATEINIT_MODIFIER] 'lateinit' modifier is not allowed on properties of a type with nullable upper bound">lateinit</error> var item: V
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java b/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java
index 9e1920fc264..53da4bb1095 100644
--- a/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java
@@ -1004,6 +1004,12 @@ public class PsiCheckerTestGenerated extends AbstractPsiCheckerTest {
             doTest(fileName);
         }
 
+        @TestMetadata("lateinitOfATypeWithNullableUpperBound.kt")
+        public void testLateinitOfATypeWithNullableUpperBound() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("idea/testData/checker/diagnosticsMessage/lateinitOfATypeWithNullableUpperBound.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("nArgumentsExpectedMessage.kt")
         public void testNArgumentsExpectedMessage() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("idea/testData/checker/diagnosticsMessage/nArgumentsExpectedMessage.kt");