diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java
index 025e21b53a4..c0229b896e0 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java
@@ -566,6 +566,7 @@ public interface Errors {
     DiagnosticFactory1<JetElement, DeclarationDescriptor> NOTHING_TO_INLINE = DiagnosticFactory1.create(WARNING);
     DiagnosticFactory2<JetElement, JetExpression, DeclarationDescriptor> USAGE_IS_NOT_INLINABLE = DiagnosticFactory2.create(ERROR);
     DiagnosticFactory2<JetElement, JetElement, DeclarationDescriptor> NULLABLE_INLINE_PARAMETER = DiagnosticFactory2.create(ERROR);
+    DiagnosticFactory2<JetElement, JetElement, DeclarationDescriptor> RECURSION_IN_INLINE = DiagnosticFactory2.create(ERROR);
     DiagnosticFactory0<JetElement> DECLARATION_CANT_BE_INLINED = DiagnosticFactory0.create(ERROR);
 
     // Error sets
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java
index 641210646f8..0bb7936120f 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java
@@ -479,6 +479,7 @@ public class DefaultErrorMessages {
         MAP.put(NOTHING_TO_INLINE, "There are no parameters of Function types to be inlined in ''{0}''", TO_STRING);
         MAP.put(USAGE_IS_NOT_INLINABLE, "Illegal usage of inline-parameter ''{0}'' in ''{1}''. Annotate the parameter with [noinline]", ELEMENT_TEXT, TO_STRING);
         MAP.put(NULLABLE_INLINE_PARAMETER, "Inline-parameter ''{0}'' of ''{1}'' must not be nullable. Annotate the parameter with [noinline] or make not nullable", ELEMENT_TEXT, TO_STRING);
+        MAP.put(RECURSION_IN_INLINE, "Inline-function ''{1}'' couldn't be recursive", ELEMENT_TEXT, TO_STRING);
 
         MAP.setImmutable();
 
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/calls/InlineCallResolverExtension.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/calls/InlineCallResolverExtension.java
index 660a777b18c..ab6e425943f 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/calls/InlineCallResolverExtension.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/calls/InlineCallResolverExtension.java
@@ -97,6 +97,7 @@ public class InlineCallResolverExtension implements CallResolverExtension {
         }
 
         checkVisibility(targetDescriptor, expression, context);
+        checkRecursion(targetDescriptor, expression, context);
     }
 
     private static boolean couldAccessVariable(JetExpression expression) {
@@ -199,6 +200,16 @@ public class InlineCallResolverExtension implements CallResolverExtension {
         }
     }
 
+    public void checkRecursion(
+            @NotNull CallableDescriptor targetDescriptor,
+            @NotNull JetElement expression,
+            @NotNull BasicCallResolutionContext context
+    ) {
+        if (targetDescriptor.getOriginal() == descriptor) {
+            context.trace.report(Errors.RECURSION_IN_INLINE.on(expression, expression, descriptor));
+        }
+    }
+
     private static boolean isInlinableParameter(@NotNull CallableDescriptor descriptor) {
         JetType type = descriptor.getReturnType();
         return type != null &&
diff --git a/compiler/testData/diagnostics/tests/inline/binaryExpressions/contains.kt b/compiler/testData/diagnostics/tests/inline/binaryExpressions/contains.kt
index b369662aad8..4b23809b753 100644
--- a/compiler/testData/diagnostics/tests/inline/binaryExpressions/contains.kt
+++ b/compiler/testData/diagnostics/tests/inline/binaryExpressions/contains.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE -RECURSION_IN_INLINE
 inline fun <T, U> Function1<T, U>.contains(p: Function1<T, U>): Boolean {
     this in p
     p in this
diff --git a/compiler/testData/diagnostics/tests/inline/binaryExpressions/rangeTo.kt b/compiler/testData/diagnostics/tests/inline/binaryExpressions/rangeTo.kt
index 0688d4bbd1c..de45b3d7cdd 100644
--- a/compiler/testData/diagnostics/tests/inline/binaryExpressions/rangeTo.kt
+++ b/compiler/testData/diagnostics/tests/inline/binaryExpressions/rangeTo.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE -RECURSION_IN_INLINE
 
 inline fun <T, U> Function1<T, U>.rangeTo(p: Function1<T, U>): Range<Int> {
     this..p
diff --git a/compiler/testData/diagnostics/tests/inline/recursion.kt b/compiler/testData/diagnostics/tests/inline/recursion.kt
new file mode 100644
index 00000000000..58fde2562b3
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inline/recursion.kt
@@ -0,0 +1,23 @@
+// !DIAGNOSTICS: -NOTHING_TO_INLINE -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -VARIABLE_EXPECTED
+
+inline fun inlineFun(s: (p: Int) -> Unit) {
+    <!RECURSION_IN_INLINE!>inlineFun<!>(s)
+}
+
+inline fun <T> inlineFun(s: T) {
+    <!RECURSION_IN_INLINE!>inlineFun<!><Int>(11)
+}
+
+
+inline fun <T> Function0<T>.inlineExt() {
+    ({11}:Function0<Int>).<!RECURSION_IN_INLINE!>inlineExt<!>();
+    {11}.<!RECURSION_IN_INLINE!>inlineExt<!>()
+}
+
+inline fun <T, V> Function1<T, V>.not() : Boolean {
+    return <!RECURSION_IN_INLINE!>!<!>this
+}
+
+inline fun <T, V> Function1<T, V>.inc() : Function1<T, V> {
+    return this<!RECURSION_IN_INLINE!>++<!>
+}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inline/unaryExpressions/notOperation.kt b/compiler/testData/diagnostics/tests/inline/unaryExpressions/notOperation.kt
index 51933f30698..5585da9b664 100644
--- a/compiler/testData/diagnostics/tests/inline/unaryExpressions/notOperation.kt
+++ b/compiler/testData/diagnostics/tests/inline/unaryExpressions/notOperation.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE -RECURSION_IN_INLINE
 inline fun <T, V> Function1<T, V>.not() : Boolean {
     return !this
 }
diff --git a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
index 7ca738c6881..6b215ab9ee1 100644
--- a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
@@ -3822,6 +3822,11 @@ public class JetDiagnosticsTestGenerated extends AbstractDiagnosticsTestWithEage
                 doTest("compiler/testData/diagnostics/tests/inline/propagation.kt");
             }
             
+            @TestMetadata("recursion.kt")
+            public void testRecursion() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/inline/recursion.kt");
+            }
+            
             @TestMetadata("returns.kt")
             public void testReturns() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/inline/returns.kt");