diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 79268a0a45e..e06176aa021 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -650,6 +650,8 @@ public interface Errors {
 
     DiagnosticFactory1<KtNamedDeclaration, VariableDescriptor> UNUSED_VARIABLE = DiagnosticFactory1.create(WARNING, DECLARATION_NAME);
     DiagnosticFactory1<KtParameter, VariableDescriptor> UNUSED_PARAMETER = DiagnosticFactory1.create(WARNING, DECLARATION_NAME);
+    DiagnosticFactory2<KtTypeParameter, TypeParameterDescriptor, KotlinType> UNUSED_TYPEALIAS_PARAMETER =
+            DiagnosticFactory2.create(WARNING, DECLARATION_NAME);
 
     DiagnosticFactory1<KtNamedDeclaration, VariableDescriptor> ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE =
             DiagnosticFactory1.create(WARNING, DECLARATION_NAME);
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
index a74202c9366..9bad0058c87 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
@@ -428,6 +428,7 @@ public class DefaultErrorMessages {
         MAP.put(CONFLICTING_PROJECTION_IN_TYPEALIAS_EXPANSION, "Conflicting projection in type alias expansion in intermediate type ''{0}''", RENDER_TYPE);
         MAP.put(TYPEALIAS_SHOULD_EXPAND_TO_CLASS, "Type alias expands to {0}, which is not a class, an interface, or an object", RENDER_TYPE);
         MAP.put(TYPEALIAS_EXPANDED_TO_MALFORMED_TYPE, "Type alias expanded to malformed type {0}: {1}", RENDER_TYPE, STRING);
+        MAP.put(UNUSED_TYPEALIAS_PARAMETER, "Type alias parameter {0} is not used in the expanded type {1} and does not affect type checking", NAME, RENDER_TYPE);
 
         MAP.put(TOO_MANY_ARGUMENTS, "Too many arguments for {0}", FQ_NAMES_IN_TYPES);
 
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt
index 6502ab025bf..4828919470a 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/DeclarationsChecker.kt
@@ -35,9 +35,8 @@ import org.jetbrains.kotlin.resolve.DescriptorUtils.classCanHaveAbstractMembers
 import org.jetbrains.kotlin.resolve.DescriptorUtils.classCanHaveOpenMembers
 import org.jetbrains.kotlin.types.*
 import org.jetbrains.kotlin.types.checker.KotlinTypeChecker
-import org.jetbrains.kotlin.types.typeUtil.contains
-import org.jetbrains.kotlin.types.typeUtil.isArrayOfNothing
-import org.jetbrains.kotlin.types.typeUtil.isNothing
+import org.jetbrains.kotlin.types.typeUtil.*
+import org.jetbrains.kotlin.utils.addToStdlib.check
 import java.util.*
 
 fun KtDeclaration.checkTypeReferences(trace: BindingTrace) {
@@ -155,7 +154,7 @@ class DeclarationsChecker(
 
         checkTypeAliasExpansion(typeAliasDescriptor, declaration)
 
-        val expandedType = typeAliasDescriptor.expandedType // TODO refactor type alias expansion
+        val expandedType = typeAliasDescriptor.expandedType
         if (expandedType.isError) return
 
         val expandedClassifier = expandedType.constructor.declarationDescriptor
@@ -167,8 +166,23 @@ class DeclarationsChecker(
         if (TypeUtils.contains(expandedType) { it.isArrayOfNothing()} ) {
             trace.report(TYPEALIAS_EXPANDED_TO_MALFORMED_TYPE.on(typeReference, expandedType, "Array<Nothing> is illegal"))
         }
+
+        val usedTypeAliasParameters: Set<TypeParameterDescriptor> = getUsedTypeAliasParameters(expandedType, typeAliasDescriptor)
+        for (typeParameter in typeAliasDescriptor.declaredTypeParameters) {
+            if (typeParameter !in usedTypeAliasParameters) {
+                val source = DescriptorToSourceUtils.descriptorToDeclaration(typeParameter) as? KtTypeParameter
+                             ?: throw AssertionError("No source element for type parameter $typeParameter of $typeAliasDescriptor")
+                trace.report(UNUSED_TYPEALIAS_PARAMETER.on(source, typeParameter, expandedType))
+            }
+        }
     }
 
+    private fun getUsedTypeAliasParameters(type: KotlinType, typeAlias: TypeAliasDescriptor): Set<TypeParameterDescriptor> =
+            type.constituentTypes().mapNotNullTo(HashSet()) {
+                val descriptor = it.constructor.declarationDescriptor as? TypeParameterDescriptor
+                descriptor?.check { it.containingDeclaration == typeAlias }
+            }
+
     private class TypeAliasDeclarationCheckingReportStrategy(
             private val trace: BindingTrace,
             typeAliasDescriptor: TypeAliasDescriptor,
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt
index dba1cf04169..54037ed2d90 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt
@@ -21,6 +21,8 @@ import org.jetbrains.kotlin.descriptors.TypeParameterDescriptor
 import org.jetbrains.kotlin.descriptors.annotations.Annotations
 import org.jetbrains.kotlin.resolve.scopes.MemberScope
 import org.jetbrains.kotlin.types.*
+import org.jetbrains.kotlin.types.typeUtil.containsTypeAliasParameters
+import org.jetbrains.kotlin.types.typeUtil.requiresTypeAliasExpansion
 
 class TypeAliasExpander(
         private val reportStrategy: TypeAliasExpansionReportStrategy
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpansion.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpansion.kt
index 1f28b291879..28cb6022b51 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpansion.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpansion.kt
@@ -23,6 +23,7 @@ import org.jetbrains.kotlin.types.KotlinType
 import org.jetbrains.kotlin.types.TypeConstructor
 import org.jetbrains.kotlin.types.TypeProjection
 import org.jetbrains.kotlin.types.TypeUtils
+import org.jetbrains.kotlin.types.typeUtil.contains
 
 class TypeAliasExpansion private constructor(
         val parent: TypeAliasExpansion?,
@@ -56,23 +57,3 @@ class TypeAliasExpansion private constructor(
                 create(null, typeAliasDescriptor, emptyList())
     }
 }
-
-fun KotlinType.containsTypeAliasParameters(): Boolean =
-        TypeUtils.contains(this) {
-            it.constructor.declarationDescriptor?.isTypeAliasParameter() ?: false
-        }
-
-fun KotlinType.containsTypeAliases(): Boolean =
-        TypeUtils.contains(this) {
-            it.constructor.declarationDescriptor is TypeAliasDescriptor
-        }
-
-fun ClassifierDescriptor.isTypeAliasParameter(): Boolean =
-        this is TypeParameterDescriptor && containingDeclaration is TypeAliasDescriptor
-
-fun KotlinType.requiresTypeAliasExpansion(): Boolean =
-        TypeUtils.contains(this) {
-            it.constructor.declarationDescriptor?.let {
-                it is TypeAliasDescriptor || it is TypeParameterDescriptor
-            }
-        }
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeResolver.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeResolver.kt
index 84f09123f33..d11b4e6e6d5 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeResolver.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeResolver.kt
@@ -35,8 +35,6 @@ import org.jetbrains.kotlin.psi.debugText.getDebugText
 import org.jetbrains.kotlin.resolve.PossiblyBareType.type
 import org.jetbrains.kotlin.resolve.bindingContextUtil.recordScope
 import org.jetbrains.kotlin.resolve.calls.tasks.DynamicCallableDescriptors
-import org.jetbrains.kotlin.resolve.lazy.ForceResolveUtil
-import org.jetbrains.kotlin.resolve.lazy.LazyEntity
 import org.jetbrains.kotlin.resolve.scopes.LazyScopeAdapter
 import org.jetbrains.kotlin.resolve.scopes.LexicalScope
 import org.jetbrains.kotlin.resolve.scopes.MemberScope
@@ -44,10 +42,10 @@ import org.jetbrains.kotlin.resolve.scopes.utils.findClassifier
 import org.jetbrains.kotlin.resolve.source.toSourceElement
 import org.jetbrains.kotlin.storage.LockBasedStorageManager
 import org.jetbrains.kotlin.storage.StorageManager
-import org.jetbrains.kotlin.storage.getValue
 import org.jetbrains.kotlin.types.*
 import org.jetbrains.kotlin.types.Variance.*
-import org.jetbrains.kotlin.types.typeUtil.contains
+import org.jetbrains.kotlin.types.typeUtil.containsTypeAliasParameters
+import org.jetbrains.kotlin.types.typeUtil.containsTypeAliases
 import org.jetbrains.kotlin.types.typeUtil.isArrayOfNothing
 
 class TypeResolver(
diff --git a/compiler/testData/diagnostics/tests/typealias/genericTypeAliasObject.kt b/compiler/testData/diagnostics/tests/typealias/genericTypeAliasObject.kt
index fe4d61cd67c..507aa9d889b 100644
--- a/compiler/testData/diagnostics/tests/typealias/genericTypeAliasObject.kt
+++ b/compiler/testData/diagnostics/tests/typealias/genericTypeAliasObject.kt
@@ -3,7 +3,7 @@ object AnObject {
     fun foo() = "OK"
 }
 
-typealias GenericTestObject<T> = AnObject
+typealias GenericTestObject<<!UNUSED_TYPEALIAS_PARAMETER!>T<!>> = AnObject
 
 val test11: AnObject = GenericTestObject
 val test12: GenericTestObject<*> = GenericTestObject
diff --git a/compiler/testData/diagnostics/tests/typealias/parameterRestrictions.kt b/compiler/testData/diagnostics/tests/typealias/parameterRestrictions.kt
index cf1d2a3191f..a4aabeeb409 100644
--- a/compiler/testData/diagnostics/tests/typealias/parameterRestrictions.kt
+++ b/compiler/testData/diagnostics/tests/typealias/parameterRestrictions.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_TYPEALIAS_PARAMETER
+
 typealias WithVariance<<!VARIANCE_ON_TYPE_PARAMETER_NOT_ALLOWED!>in<!> X, <!VARIANCE_ON_TYPE_PARAMETER_NOT_ALLOWED!>out<!> Y> = Int
 typealias WithBounds1<T : <!BOUND_ON_TYPE_ALIAS_PARAMETER_NOT_ALLOWED!>T<!>> = Int
 typealias WithBounds2<X : <!BOUND_ON_TYPE_ALIAS_PARAMETER_NOT_ALLOWED!>Y<!>, Y : <!BOUND_ON_TYPE_ALIAS_PARAMETER_NOT_ALLOWED!>X<!>> = Int
diff --git a/compiler/testData/diagnostics/tests/typealias/substitutionVariance.kt b/compiler/testData/diagnostics/tests/typealias/substitutionVariance.kt
index 1b355a97f89..92fa20a434e 100644
--- a/compiler/testData/diagnostics/tests/typealias/substitutionVariance.kt
+++ b/compiler/testData/diagnostics/tests/typealias/substitutionVariance.kt
@@ -5,16 +5,16 @@ class Inv<T>
 typealias In1<T> = In<T>
 typealias In2<T> = In<<!REDUNDANT_PROJECTION!>in<!> T>
 typealias In3<T> = In<<!CONFLICTING_PROJECTION!>out<!> T>
-typealias In4<T> = In<*>
+typealias In4<<!UNUSED_TYPEALIAS_PARAMETER!>T<!>> = In<*>
 
 typealias Out1<T> = Out<T>
 typealias Out2<T> = Out<<!CONFLICTING_PROJECTION!>in<!> T>
 typealias Out3<T> = Out<<!REDUNDANT_PROJECTION!>out<!> T>
-typealias Out4<T> = Out<*>
+typealias Out4<<!UNUSED_TYPEALIAS_PARAMETER!>T<!>> = Out<*>
 
 typealias Inv1<T> = Inv<T>
 typealias Inv2<T> = Inv<in T>
 typealias Inv3<T> = Inv<out T>
-typealias Inv4<T> = Inv<*>
+typealias Inv4<<!UNUSED_TYPEALIAS_PARAMETER!>T<!>> = Inv<*>
 
 val inv1: Inv1<Int> = Inv<Int>()
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt b/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt
index 3e34b052738..c61c176063c 100644
--- a/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt
+++ b/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt
@@ -1,6 +1,6 @@
 typealias ToTypeParam1<T> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>T<!>
 typealias ToTypeParam2<T> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam1<T><!>
-typealias ToTypeParam3<T1, T2> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam2<T1><!>
+typealias ToTypeParam3<T1, <!UNUSED_TYPEALIAS_PARAMETER!>T2<!>> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam2<T1><!>
 typealias ToTypeParam4 = ToTypeParam1<Any>
 
 typealias ToFun1 = () -> Unit
@@ -9,6 +9,6 @@ typealias ToFun2<T> = (T) -> Unit
 class Outer {
     typealias ToTypeParam1<T> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>T<!>
     typealias ToTypeParam2<T> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam1<T><!>
-    typealias ToTypeParam3<T1, T2> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam2<T1><!>
+    typealias ToTypeParam3<T1, <!UNUSED_TYPEALIAS_PARAMETER!>T2<!>> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam2<T1><!>
     typealias ToTypeParam4 = ToTypeParam1<Any>
 }
diff --git a/compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.kt b/compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.kt
new file mode 100644
index 00000000000..2d11992bd01
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.kt
@@ -0,0 +1,2 @@
+typealias Test<T, <!UNUSED_TYPEALIAS_PARAMETER!>X<!>> = List<T>
+typealias Test2<T, <!UNUSED_TYPEALIAS_PARAMETER!>X<!>> = Test<T, X>
diff --git a/compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.txt b/compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.txt
new file mode 100644
index 00000000000..c329e92805f
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.txt
@@ -0,0 +1,4 @@
+package
+
+public typealias Test</*0*/ T, /*1*/ X>  = kotlin.collections.List<T>
+public typealias Test2</*0*/ T, /*1*/ X>  = Test<T, X>
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index b8505575af5..7bdaee9fa81 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -19647,6 +19647,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 doTest(fileName);
             }
 
+            @TestMetadata("unusedTypeAliasParameter.kt")
+            public void testUnusedTypeAliasParameter() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/typealias/unusedTypeAliasParameter.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("wrongNumberOfArgumentsInTypeAliasConstructor.kt")
             public void testWrongNumberOfArgumentsInTypeAliasConstructor() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/typealias/wrongNumberOfArgumentsInTypeAliasConstructor.kt");
diff --git a/core/descriptors/src/org/jetbrains/kotlin/types/TypeUtils.kt b/core/descriptors/src/org/jetbrains/kotlin/types/TypeUtils.kt
index 707b6096fbb..c11dc8fed3e 100644
--- a/core/descriptors/src/org/jetbrains/kotlin/types/TypeUtils.kt
+++ b/core/descriptors/src/org/jetbrains/kotlin/types/TypeUtils.kt
@@ -17,9 +17,7 @@
 package org.jetbrains.kotlin.types.typeUtil
 
 import org.jetbrains.kotlin.builtins.KotlinBuiltIns
-import org.jetbrains.kotlin.descriptors.ClassDescriptor
-import org.jetbrains.kotlin.descriptors.ClassKind
-import org.jetbrains.kotlin.descriptors.TypeParameterDescriptor
+import org.jetbrains.kotlin.descriptors.*
 import org.jetbrains.kotlin.descriptors.annotations.Annotations
 import org.jetbrains.kotlin.resolve.DescriptorUtils
 import org.jetbrains.kotlin.resolve.calls.inference.isCaptured
@@ -128,6 +126,9 @@ fun constituentTypes(types: Collection<KotlinType>): Collection<KotlinType> {
     return result
 }
 
+fun KotlinType.constituentTypes(): Collection<KotlinType> =
+        constituentTypes(listOf(this))
+
 private fun constituentTypes(result: MutableSet<KotlinType>, types: Collection<KotlinType>) {
     result.addAll(types)
     for (type in types) {
@@ -135,7 +136,7 @@ private fun constituentTypes(result: MutableSet<KotlinType>, types: Collection<K
             with (type.asFlexibleType()) { constituentTypes(result, setOf(lowerBound, upperBound)) }
         }
         else {
-            constituentTypes(result, type.arguments.filterNot { it.isStarProjection }.map { it.type })
+            constituentTypes(result, type.arguments.mapNotNull { if (!it.isStarProjection) it.type else null })
         }
     }
 }
@@ -170,3 +171,24 @@ private fun SimpleType.replaceArgumentsWithStarProjections(): SimpleType {
 
     return replace(newArguments)
 }
+
+fun KotlinType.containsTypeAliasParameters(): Boolean =
+        contains {
+            it.constructor.declarationDescriptor?.isTypeAliasParameter() ?: false
+        }
+
+fun KotlinType.containsTypeAliases(): Boolean =
+        contains {
+            it.constructor.declarationDescriptor is TypeAliasDescriptor
+        }
+
+fun ClassifierDescriptor.isTypeAliasParameter(): Boolean =
+        this is TypeParameterDescriptor && containingDeclaration is TypeAliasDescriptor
+
+fun KotlinType.requiresTypeAliasExpansion(): Boolean =
+        contains {
+            it.constructor.declarationDescriptor?.let {
+                it is TypeAliasDescriptor || it is TypeParameterDescriptor
+            } ?: false
+        }
+