diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.kt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.kt
index 88d32c0a381..d91b74d30d3 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.kt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.kt
@@ -1,9 +1,13 @@
 package test
 
-public trait LoadIterable<T> : java.lang.Object {
-    public fun getIterable(): MutableIterable<T>?
-    public fun setIterable(p0: MutableIterable<T>?)
+import org.jetbrains.annotations.*
 
+public trait LoadIterable<T> : java.lang.Object {
+    Mutable
+    public fun getIterable(): MutableIterable<T>?
+    public fun setIterable([Mutable] p0: MutableIterable<T>?)
+
+    ReadOnly
     public fun getReadOnlyIterable(): Iterable<T>?
-    public fun setReadOnlyIterable(p0: Iterable<T>?)
+    public fun setReadOnlyIterable([ReadOnly] p0: Iterable<T>?)
 }
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.txt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.txt
index 682538136eb..3c2780a0948 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.txt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterable.txt
@@ -1,8 +1,8 @@
 package test
 
 public trait LoadIterable</*0*/ T> : java.lang.Object {
-    public abstract fun getIterable(): jet.MutableIterable<T>?
-    public abstract fun getReadOnlyIterable(): jet.Iterable<T>?
-    public abstract fun setIterable(/*0*/ p0: jet.MutableIterable<T>?): jet.Unit
-    public abstract fun setReadOnlyIterable(/*0*/ p0: jet.Iterable<T>?): jet.Unit
+    org.jetbrains.annotations.Mutable() public abstract fun getIterable(): jet.MutableIterable<T>?
+    org.jetbrains.annotations.ReadOnly() public abstract fun getReadOnlyIterable(): jet.Iterable<T>?
+    public abstract fun setIterable(/*0*/ org.jetbrains.annotations.Mutable() p0: jet.MutableIterable<T>?): jet.Unit
+    public abstract fun setReadOnlyIterable(/*0*/ org.jetbrains.annotations.ReadOnly() p0: jet.Iterable<T>?): jet.Unit
 }
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.kt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.kt
index 4c8ef4e6521..a29754daca8 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.kt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.kt
@@ -1,6 +1,9 @@
 package test
 
+import org.jetbrains.annotations.*
+
 public trait LoadIterableWithConflict<T> : java.lang.Object {
+    [ReadOnly] [Mutable]
     public fun getIterable(): MutableIterable<T>?
-    public fun setIterable(p0: MutableIterable<T>?)
+    public fun setIterable([ReadOnly] [Mutable] p0: MutableIterable<T>?)
 }
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.txt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.txt
index 30aafb28ab7..be5cfed70da 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.txt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithConflict.txt
@@ -1,6 +1,6 @@
 package test
 
 public trait LoadIterableWithConflict</*0*/ T> : java.lang.Object {
-    public abstract fun getIterable(): jet.MutableIterable<T>?
-    public abstract fun setIterable(/*0*/ p0: jet.MutableIterable<T>?): jet.Unit
+    org.jetbrains.annotations.ReadOnly() org.jetbrains.annotations.Mutable() public abstract fun getIterable(): jet.MutableIterable<T>?
+    public abstract fun setIterable(/*0*/ org.jetbrains.annotations.ReadOnly() org.jetbrains.annotations.Mutable() p0: jet.MutableIterable<T>?): jet.Unit
 }
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.kt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.kt
index 4a3753195a7..a953b293032 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.kt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.kt
@@ -1,9 +1,13 @@
 package test
 
-public trait LoadIterableWithNullability<T> : java.lang.Object {
-    public fun getIterable(): MutableIterable<T>
-    public fun setIterable(p0: MutableIterable<T>)
+import org.jetbrains.annotations.*
 
+public trait LoadIterableWithNullability<T> : java.lang.Object {
+    Mutable
+    public fun getIterable(): MutableIterable<T>
+    public fun setIterable([Mutable] p0: MutableIterable<T>)
+
+    ReadOnly
     public fun getReadOnlyIterable(): Iterable<T>
-    public fun setReadOnlyIterable(p0: Iterable<T>)
+    public fun setReadOnlyIterable([ReadOnly] p0: Iterable<T>)
 }
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.txt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.txt
index 39cf9a0b94f..a5d7dec8a19 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.txt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithNullability.txt
@@ -1,8 +1,8 @@
 package test
 
 public trait LoadIterableWithNullability</*0*/ T> : java.lang.Object {
-    public abstract fun getIterable(): jet.MutableIterable<T>
-    public abstract fun getReadOnlyIterable(): jet.Iterable<T>
-    public abstract fun setIterable(/*0*/ p0: jet.MutableIterable<T>): jet.Unit
-    public abstract fun setReadOnlyIterable(/*0*/ p0: jet.Iterable<T>): jet.Unit
+    org.jetbrains.annotations.Mutable() public abstract fun getIterable(): jet.MutableIterable<T>
+    org.jetbrains.annotations.ReadOnly() public abstract fun getReadOnlyIterable(): jet.Iterable<T>
+    public abstract fun setIterable(/*0*/ org.jetbrains.annotations.Mutable() p0: jet.MutableIterable<T>): jet.Unit
+    public abstract fun setReadOnlyIterable(/*0*/ org.jetbrains.annotations.ReadOnly() p0: jet.Iterable<T>): jet.Unit
 }
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.kt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.kt
index 8f90e700924..b9d4da2ba73 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.kt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.kt
@@ -1,14 +1,17 @@
 package test
 
 import java.util.ArrayList
+import org.jetbrains.annotations.*
 
 public trait LoadIterableWithPropagation: java.lang.Object {
     public trait LoadIterable<T> : java.lang.Object {
+        Mutable
         public fun getIterable(): MutableIterable<T>?
-        public fun setIterable(p0: MutableIterable<T>?)
+        public fun setIterable([Mutable] p0: MutableIterable<T>?)
 
+        ReadOnly
         public fun getReadOnlyIterable(): Iterable<T>?
-        public fun setReadOnlyIterable(p0: Iterable<T>?)
+        public fun setReadOnlyIterable([ReadOnly] p0: Iterable<T>?)
     }
 
     public open class LoadIterableImpl<T> : LoadIterable<T> {
diff --git a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.txt b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.txt
index ec577680d19..d835f62fc3f 100644
--- a/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.txt
+++ b/compiler/testData/loadJava/compiledJavaCompareWithKotlin/mutability/LoadIterableWithPropagation.txt
@@ -3,10 +3,10 @@ package test
 public trait LoadIterableWithPropagation : java.lang.Object {
     
     public trait LoadIterable</*0*/ T> : java.lang.Object {
-        public abstract fun getIterable(): jet.MutableIterable<T>?
-        public abstract fun getReadOnlyIterable(): jet.Iterable<T>?
-        public abstract fun setIterable(/*0*/ p0: jet.MutableIterable<T>?): jet.Unit
-        public abstract fun setReadOnlyIterable(/*0*/ p0: jet.Iterable<T>?): jet.Unit
+        org.jetbrains.annotations.Mutable() public abstract fun getIterable(): jet.MutableIterable<T>?
+        org.jetbrains.annotations.ReadOnly() public abstract fun getReadOnlyIterable(): jet.Iterable<T>?
+        public abstract fun setIterable(/*0*/ org.jetbrains.annotations.Mutable() p0: jet.MutableIterable<T>?): jet.Unit
+        public abstract fun setReadOnlyIterable(/*0*/ org.jetbrains.annotations.ReadOnly() p0: jet.Iterable<T>?): jet.Unit
     }
     
     public open class LoadIterableImpl</*0*/ T> : test.LoadIterableWithPropagation.LoadIterable<T> {
diff --git a/compiler/tests/org/jetbrains/jet/JetTestUtils.java b/compiler/tests/org/jetbrains/jet/JetTestUtils.java
index 8c660e2577d..53ea7177326 100644
--- a/compiler/tests/org/jetbrains/jet/JetTestUtils.java
+++ b/compiler/tests/org/jetbrains/jet/JetTestUtils.java
@@ -243,7 +243,7 @@ public class JetTestUtils {
             @NotNull TestJdkKind jdkKind
     ) {
         return JetCoreEnvironment.createForTests(disposable, compilerConfigurationForTests(
-                configurationKind, jdkKind, getAnnotationsJar(), getAnnotationsExtJar()));
+                configurationKind, jdkKind, getAnnotationsJar()));
     }
 
     public static File findMockJdkRtJar() {
@@ -254,10 +254,6 @@ public class JetTestUtils {
         return new File(JetTestCaseBuilder.getHomeDirectory(), "compiler/testData/mockJDK/jre/lib/annotations.jar");
     }
 
-    public static File getAnnotationsExtJar() {
-        return new File(JetTestCaseBuilder.getHomeDirectory(), "dist/kotlinc/lib/kotlin-annotations-ext.jar");
-    }
-
     public static void mkdirs(File file) throws IOException {
         if (file.isDirectory()) {
             return;
diff --git a/compiler/tests/org/jetbrains/jet/jvm/compiler/LoadDescriptorUtil.java b/compiler/tests/org/jetbrains/jet/jvm/compiler/LoadDescriptorUtil.java
index c4fcb844bbf..93386f41cfd 100644
--- a/compiler/tests/org/jetbrains/jet/jvm/compiler/LoadDescriptorUtil.java
+++ b/compiler/tests/org/jetbrains/jet/jvm/compiler/LoadDescriptorUtil.java
@@ -91,7 +91,8 @@ public final class LoadDescriptorUtil {
             @NotNull ConfigurationKind configurationKind
     ) {
         CompilerConfiguration configuration = JetTestUtils.compilerConfigurationForTests(
-                configurationKind, TestJdkKind.MOCK_JDK, JetTestUtils.getAnnotationsJar(),
+                configurationKind, TestJdkKind.MOCK_JDK,
+                JetTestUtils.getAnnotationsJar(),
                 javaRoot,
                 new File("compiler/tests") // for @ExpectLoadError annotation
         );
diff --git a/core/descriptor.loader.java/src/org/jetbrains/jet/lang/resolve/java/resolver/JavaValueParameterResolver.java b/core/descriptor.loader.java/src/org/jetbrains/jet/lang/resolve/java/resolver/JavaValueParameterResolver.java
index 6b3e8f43761..7c18c1da622 100644
--- a/core/descriptor.loader.java/src/org/jetbrains/jet/lang/resolve/java/resolver/JavaValueParameterResolver.java
+++ b/core/descriptor.loader.java/src/org/jetbrains/jet/lang/resolve/java/resolver/JavaValueParameterResolver.java
@@ -19,7 +19,6 @@ package org.jetbrains.jet.lang.resolve.java.resolver;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.jet.lang.descriptors.DeclarationDescriptor;
 import org.jetbrains.jet.lang.descriptors.ValueParameterDescriptor;
-import org.jetbrains.jet.lang.descriptors.annotations.AnnotationDescriptor;
 import org.jetbrains.jet.lang.descriptors.impl.ValueParameterDescriptorImpl;
 import org.jetbrains.jet.lang.resolve.java.structure.JavaArrayType;
 import org.jetbrains.jet.lang.resolve.java.structure.JavaMethod;
@@ -32,7 +31,6 @@ import org.jetbrains.jet.lang.types.lang.KotlinBuiltIns;
 
 import javax.inject.Inject;
 import java.util.ArrayList;
-import java.util.Collections;
 import java.util.List;
 
 public final class JavaValueParameterResolver {
@@ -85,7 +83,7 @@ public final class JavaValueParameterResolver {
         return new ValueParameterDescriptorImpl(
                 containingDeclaration,
                 i,
-                Collections.<AnnotationDescriptor>emptyList(), // TODO
+                annotationResolver.resolveAnnotations(parameter),
                 getParameterName(i, parameter), // TODO: must be very slow, make it lazy?
                 outType,
                 false,