diff --git a/idea/src/org/jetbrains/kotlin/idea/debugger/stepping/KotlinSmartStepIntoHandler.kt b/idea/src/org/jetbrains/kotlin/idea/debugger/stepping/KotlinSmartStepIntoHandler.kt
index 36102c9477f..7386dfb3777 100644
--- a/idea/src/org/jetbrains/kotlin/idea/debugger/stepping/KotlinSmartStepIntoHandler.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/debugger/stepping/KotlinSmartStepIntoHandler.kt
@@ -44,15 +44,11 @@ class KotlinSmartStepIntoHandler : JvmSmartStepIntoHandler() {
     override fun isAvailable(position: SourcePosition?) = position?.file is KtFile
 
     override fun findSmartStepTargets(position: SourcePosition): List<SmartStepTarget> {
-        if (position.line < 0) return emptyList()
-
         val file = position.file
 
-        val lineStart = CodeInsightUtils.getStartLineOffset(file, position.line) ?: return emptyList()
+        val elementAtOffset = position.elementAt ?: return emptyList()
 
-        val elementAtOffset = file.findElementAt(lineStart) ?: return emptyList()
-
-        val element = CodeInsightUtils.getTopmostElementAtOffset(elementAtOffset, lineStart)
+        val element = CodeInsightUtils.getTopmostElementAtOffset(elementAtOffset, elementAtOffset.textRange.startOffset)
         if (element !is KtElement) return emptyList()
 
         val elementTextRange = element.textRange ?: return emptyList()
diff --git a/idea/testData/debugger/tinyApp/outs/smartStepIntoInsideLambda.out b/idea/testData/debugger/tinyApp/outs/smartStepIntoInsideLambda.out
new file mode 100644
index 00000000000..9390ecfe235
--- /dev/null
+++ b/idea/testData/debugger/tinyApp/outs/smartStepIntoInsideLambda.out
@@ -0,0 +1,8 @@
+LineBreakpoint created at smartStepIntoInsideLambda.kt:6 lambdaOrdinal = 0
+!JDK_HOME!\bin\java -agentlib:jdwp=transport=dt_socket,address=!HOST_NAME!:!HOST_PORT!,suspend=y,server=n -Dfile.encoding=!FILE_ENCODING! -classpath !OUTPUT_PATH!;!KOTLIN_RUNTIME!;!CUSTOM_LIBRARY!;!RT_JAR! smartStepIntoInsideLambda.SmartStepIntoInsideLambdaKt
+Connected to the target VM, address: '!HOST_NAME!:PORT_NAME!', transport: 'socket'
+smartStepIntoInsideLambda.kt:6
+smartStepIntoInsideLambda.kt:14
+Disconnected from the target VM, address: '!HOST_NAME!:PORT_NAME!', transport: 'socket'
+
+Process finished with exit code 0
diff --git a/idea/testData/debugger/tinyApp/src/stepping/custom/smartStepIntoInsideLambda.kt b/idea/testData/debugger/tinyApp/src/stepping/custom/smartStepIntoInsideLambda.kt
new file mode 100644
index 00000000000..3bb6a2276d7
--- /dev/null
+++ b/idea/testData/debugger/tinyApp/src/stepping/custom/smartStepIntoInsideLambda.kt
@@ -0,0 +1,16 @@
+package smartStepIntoInsideLambda
+
+fun main(args: Array<String>) {
+    // SMART_STEP_INTO_BY_INDEX: 1
+    //Breakpoint! (lambdaOrdinal = 0)
+    foo { bar() }
+}
+
+fun foo(f: () -> Unit) {
+    f()
+}
+
+fun bar() {
+    val a = 1
+}
+
diff --git a/idea/tests/org/jetbrains/kotlin/idea/debugger/AbstractSmartStepIntoTest.kt b/idea/tests/org/jetbrains/kotlin/idea/debugger/AbstractSmartStepIntoTest.kt
index 5249b58276c..0fff365b6da 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/debugger/AbstractSmartStepIntoTest.kt
+++ b/idea/tests/org/jetbrains/kotlin/idea/debugger/AbstractSmartStepIntoTest.kt
@@ -17,6 +17,7 @@
 package org.jetbrains.kotlin.idea.debugger
 
 import com.intellij.testFramework.fixtures.JavaCodeInsightTestFixture
+import org.jetbrains.kotlin.idea.codeInsight.CodeInsightUtils
 import org.jetbrains.kotlin.idea.debugger.stepping.KotlinSmartStepIntoHandler
 import org.jetbrains.kotlin.idea.test.KotlinLightCodeInsightFixtureTestCase
 import org.jetbrains.kotlin.idea.test.KotlinWithJdkAndRuntimeLightProjectDescriptor
@@ -33,7 +34,14 @@ abstract class AbstractSmartStepIntoTest : KotlinLightCodeInsightFixtureTestCase
         val offset = fixture.caretOffset
         val line = fixture.getDocument(fixture.file!!)!!.getLineNumber(offset)
 
-        val position = MockSourcePosition(_file = fixture.file, _line = line, _offset = offset, _editor = fixture.editor)
+        val lineStart = CodeInsightUtils.getStartLineOffset(file, line)!!
+        val elementAtOffset = file.findElementAt(lineStart)
+
+        val position = MockSourcePosition(_file = fixture.file,
+                                          _line = line,
+                                          _offset = offset,
+                                          _editor = fixture.editor,
+                                          _elementAt = elementAtOffset)
 
         val actual = KotlinSmartStepIntoHandler().findSmartStepTargets(position).map { it.presentation }
 
diff --git a/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinDebuggerTestBase.kt b/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinDebuggerTestBase.kt
index bcadb2ff368..a49845039f8 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinDebuggerTestBase.kt
+++ b/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinDebuggerTestBase.kt
@@ -45,7 +45,6 @@ import com.intellij.xdebugger.XDebuggerUtil
 import com.intellij.xdebugger.breakpoints.*
 import org.jetbrains.java.debugger.breakpoints.properties.JavaBreakpointProperties
 import org.jetbrains.java.debugger.breakpoints.properties.JavaLineBreakpointProperties
-import org.jetbrains.kotlin.idea.refactoring.getLineNumber
 import org.jetbrains.kotlin.idea.debugger.breakpoints.KotlinFieldBreakpoint
 import org.jetbrains.kotlin.idea.debugger.breakpoints.KotlinFieldBreakpointType
 import org.jetbrains.kotlin.idea.debugger.breakpoints.KotlinLineBreakpointType
@@ -205,16 +204,10 @@ abstract class KotlinDebuggerTestBase : KotlinDebuggerTestCase() {
     }
 
     private fun createSmartStepIntoFilters(): List<MethodFilter> {
-        val contextElement = ContextUtil.getContextElement(evaluationContext)!!
-        val line = runReadAction { contextElement.getLineNumber() }
-
         return runReadAction {
-            val containingFile = contextElement.containingFile
-
-            val position = MockSourcePosition(_file = containingFile, _line = line)
+            val position = debuggerContext.sourcePosition
 
             val stepTargets = KotlinSmartStepIntoHandler().findSmartStepTargets(position)
-
             stepTargets.filterIsInstance<SmartStepTarget>().mapNotNull {
                 stepTarget ->
                 when (stepTarget) {
diff --git a/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinSteppingTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinSteppingTestGenerated.java
index 85b3e20798f..2726ac6691e 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinSteppingTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/debugger/KotlinSteppingTestGenerated.java
@@ -613,6 +613,12 @@ public class KotlinSteppingTestGenerated extends AbstractKotlinSteppingTest {
             doCustomTest(fileName);
         }
 
+        @TestMetadata("smartStepIntoInsideLambda.kt")
+        public void testSmartStepIntoInsideLambda() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("idea/testData/debugger/tinyApp/src/stepping/custom/smartStepIntoInsideLambda.kt");
+            doCustomTest(fileName);
+        }
+
         @TestMetadata("smartStepIntoInterfaceImpl.kt")
         public void testSmartStepIntoInterfaceImpl() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("idea/testData/debugger/tinyApp/src/stepping/custom/smartStepIntoInterfaceImpl.kt");