diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 617fe35f263..5f7d32cd114 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -310,9 +310,9 @@ public interface Errors {
 
     // Inline classes
 
-    DiagnosticFactory0<KtClass> INLINE_CLASS_NOT_TOP_LEVEL = DiagnosticFactory0.create(ERROR);
+    DiagnosticFactory0<PsiElement> INLINE_CLASS_NOT_TOP_LEVEL = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<PsiElement> INLINE_CLASS_NOT_FINAL = DiagnosticFactory0.create(ERROR);
-    DiagnosticFactory0<KtClass> ABSENCE_OF_PRIMARY_CONSTRUCTOR_FOR_INLINE_CLASS = DiagnosticFactory0.create(ERROR);
+    DiagnosticFactory0<PsiElement> ABSENCE_OF_PRIMARY_CONSTRUCTOR_FOR_INLINE_CLASS = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<KtElement> INLINE_CLASS_CONSTRUCTOR_WRONG_PARAMETERS_SIZE = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<KtParameter> INLINE_CLASS_CONSTRUCTOR_NOT_FINAL_READ_ONLY_PARAMETER = DiagnosticFactory0.create(ERROR);
 
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt
index c37596a1592..f0d9b0bd52c 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt
@@ -14,6 +14,8 @@ import org.jetbrains.kotlin.lexer.KtTokens
 import org.jetbrains.kotlin.psi.KtClass
 import org.jetbrains.kotlin.psi.KtDeclaration
 import org.jetbrains.kotlin.psi.KtParameter
+import org.jetbrains.kotlin.psi.getModificationStamp
+import org.jetbrains.kotlin.psi.psiUtil.hasActualModifier
 import org.jetbrains.kotlin.psi.psiUtil.modalityModifier
 import org.jetbrains.kotlin.resolve.DescriptorUtils
 
@@ -23,9 +25,12 @@ object InlineClassDeclarationChecker : DeclarationChecker {
         if (descriptor !is ClassDescriptor || !descriptor.isInline) return
         if (descriptor.kind != ClassKind.CLASS) return
 
+        val inlineKeyword = declaration.modifierList?.getModifier(KtTokens.INLINE_KEYWORD)
+        require(inlineKeyword != null) { "Declaration of inline class must have 'inline' keyword" }
+
         val trace = context.trace
         if (!DescriptorUtils.isTopLevelDeclaration(descriptor)) {
-            trace.report(Errors.INLINE_CLASS_NOT_TOP_LEVEL.on(declaration))
+            trace.report(Errors.INLINE_CLASS_NOT_TOP_LEVEL.on(inlineKeyword))
             return
         }
 
@@ -37,7 +42,7 @@ object InlineClassDeclarationChecker : DeclarationChecker {
 
         val primaryConstructor = declaration.primaryConstructor
         if (primaryConstructor == null) {
-            trace.report(Errors.ABSENCE_OF_PRIMARY_CONSTRUCTOR_FOR_INLINE_CLASS.on(declaration))
+            trace.report(Errors.ABSENCE_OF_PRIMARY_CONSTRUCTOR_FOR_INLINE_CLASS.on(inlineKeyword))
             return
         }
 
diff --git a/compiler/testData/diagnostics/tests/inlineClasses/inlineClassDeclarationCheck.kt b/compiler/testData/diagnostics/tests/inlineClasses/inlineClassDeclarationCheck.kt
index af375ab0807..4af85c4f712 100644
--- a/compiler/testData/diagnostics/tests/inlineClasses/inlineClassDeclarationCheck.kt
+++ b/compiler/testData/diagnostics/tests/inlineClasses/inlineClassDeclarationCheck.kt
@@ -3,7 +3,7 @@
 
 inline class A0(val x: Int)
 
-<!ABSENCE_OF_PRIMARY_CONSTRUCTOR_FOR_INLINE_CLASS!>inline class A1<!>
+<!ABSENCE_OF_PRIMARY_CONSTRUCTOR_FOR_INLINE_CLASS!>inline<!> class A1
 inline class A2<!INLINE_CLASS_CONSTRUCTOR_WRONG_PARAMETERS_SIZE!>()<!>
 inline class A3(<!INLINE_CLASS_CONSTRUCTOR_NOT_FINAL_READ_ONLY_PARAMETER!>x: Int<!>)
 inline class A4(<!INLINE_CLASS_CONSTRUCTOR_NOT_FINAL_READ_ONLY_PARAMETER!>var x: Int<!>)
@@ -15,14 +15,14 @@ inline class A9(final val x: Int)
 
 class B1 {
     companion object {
-        <!INLINE_CLASS_NOT_TOP_LEVEL!>inline class C1(val x: Int)<!>
+        <!INLINE_CLASS_NOT_TOP_LEVEL!>inline<!> class C1(val x: Int)
     }
 
-    <!INLINE_CLASS_NOT_TOP_LEVEL!>inline class C2(val x: Int)<!>
+    <!INLINE_CLASS_NOT_TOP_LEVEL!>inline<!> class C2(val x: Int)
 }
 
 object B2 {
-    <!INLINE_CLASS_NOT_TOP_LEVEL!>inline class C3(val x: Int)<!>
+    <!INLINE_CLASS_NOT_TOP_LEVEL!>inline<!> class C3(val x: Int)
 }
 
 final inline class D0(val x: Int)