diff --git a/idea/src/org/jetbrains/kotlin/idea/search/ideaExtensions/KotlinDefinitionsSearcher.kt b/idea/src/org/jetbrains/kotlin/idea/search/ideaExtensions/KotlinDefinitionsSearcher.kt
index d1db2dfd4ba..a752e1ed106 100644
--- a/idea/src/org/jetbrains/kotlin/idea/search/ideaExtensions/KotlinDefinitionsSearcher.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/search/ideaExtensions/KotlinDefinitionsSearcher.kt
@@ -17,9 +17,11 @@
 package org.jetbrains.kotlin.idea.search.ideaExtensions
 
 import com.intellij.codeInsight.navigation.MethodImplementationsSearch
-import com.intellij.openapi.application.runReadAction
+import com.intellij.psi.PsiClass
 import com.intellij.psi.PsiElement
 import com.intellij.psi.PsiMethod
+import com.intellij.psi.search.GlobalSearchScope
+import com.intellij.psi.search.LocalSearchScope
 import com.intellij.psi.search.SearchScope
 import com.intellij.psi.search.searches.ClassInheritorsSearch
 import com.intellij.psi.search.searches.DefinitionsScopedSearch
@@ -27,9 +29,13 @@ import com.intellij.util.Processor
 import com.intellij.util.QueryExecutor
 import com.intellij.util.containers.ContainerUtil
 import org.jetbrains.kotlin.asJava.LightClassUtil
+import org.jetbrains.kotlin.asJava.classes.KtLightClass
 import org.jetbrains.kotlin.asJava.elements.KtLightMethod
 import org.jetbrains.kotlin.asJava.toLightClass
+import org.jetbrains.kotlin.asJava.unwrapped
+import org.jetbrains.kotlin.idea.util.application.runReadAction
 import org.jetbrains.kotlin.psi.*
+import org.jetbrains.kotlin.psi.psiUtil.contains
 import java.util.*
 
 class KotlinDefinitionsSearcher : QueryExecutor<PsiElement, DefinitionsScopedSearch.SearchParameters> {
@@ -42,6 +48,14 @@ class KotlinDefinitionsSearcher : QueryExecutor<PsiElement, DefinitionsScopedSea
             is KtClass ->
                 processClassImplementations(element, consumer)
 
+            is KtLightClass -> {
+                val useScope = runReadAction { element.useScope }
+                if (useScope is LocalSearchScope)
+                    processLightClassLocalImplementations(element, useScope, consumer)
+                else
+                    true
+            }
+
             is KtNamedFunction, is KtSecondaryConstructor ->
                 processFunctionImplementations(element as KtFunction, scope, consumer)
 
@@ -73,11 +87,30 @@ class KotlinDefinitionsSearcher : QueryExecutor<PsiElement, DefinitionsScopedSea
         }
 
         private fun processClassImplementations(klass: KtClass, consumer: Processor<PsiElement>): Boolean {
-            val psiClass = runReadAction { klass.toLightClass() }
-            if (psiClass != null) {
-                return ContainerUtil.process(ClassInheritorsSearch.search(psiClass, true), consumer)
+            val psiClass = runReadAction { klass.toLightClass() } ?: return true
+
+            val searchScope = runReadAction { psiClass.useScope }
+            if (searchScope is LocalSearchScope) {
+                return processLightClassLocalImplementations(psiClass, searchScope, consumer)
             }
-            return true
+
+            return ContainerUtil.process(ClassInheritorsSearch.search(psiClass, true), consumer)
+        }
+
+        private fun processLightClassLocalImplementations(psiClass: KtLightClass,
+                                                          searchScope: LocalSearchScope,
+                                                          consumer: Processor<PsiElement>): Boolean {
+            // workaround for IDEA optimization that uses Java PSI traversal to locate inheritors in local search scope
+            val globalScope = GlobalSearchScope.filesScope(psiClass.project, searchScope.virtualFiles.toList())
+            return ContainerUtil.process(ClassInheritorsSearch.search(psiClass, globalScope, true), Processor<PsiClass> { candidate ->
+                val candidateOrigin = candidate.unwrapped ?: candidate
+                if (candidateOrigin in searchScope) {
+                    consumer.process(candidate)
+                }
+                else {
+                    true
+                }
+            })
         }
 
         private fun processFunctionImplementations(function: KtFunction, scope: SearchScope, consumer: Processor<PsiElement>): Boolean {
diff --git a/idea/testData/search/definitions/testNestedClass.kt b/idea/testData/search/definitions/testNestedClass.kt
new file mode 100644
index 00000000000..86ad5d75ef3
--- /dev/null
+++ b/idea/testData/search/definitions/testNestedClass.kt
@@ -0,0 +1,8 @@
+// CLASS: Outer.Base
+// SEARCH: class:Derived
+
+class Outer {
+    private abstract class Base
+
+    private class Derived : Base()
+}
diff --git a/idea/tests/org/jetbrains/kotlin/search/DefinitionsSearchTest.kt b/idea/tests/org/jetbrains/kotlin/search/DefinitionsSearchTest.kt
new file mode 100644
index 00000000000..f7e6ea2b7ee
--- /dev/null
+++ b/idea/tests/org/jetbrains/kotlin/search/DefinitionsSearchTest.kt
@@ -0,0 +1,47 @@
+/*
+ * Copyright 2010-2016 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.jetbrains.kotlin.search
+
+import com.intellij.openapi.util.io.FileUtil
+import com.intellij.psi.search.searches.DefinitionsScopedSearch
+import org.jetbrains.kotlin.asJava.classes.KtLightClass
+import org.jetbrains.kotlin.idea.test.PluginTestCaseBase
+import org.jetbrains.kotlin.test.InTextDirectivesUtils
+import java.io.File
+
+class DefinitionsSearchTest : AbstractSearcherTest() {
+    fun testNestedClass() {
+        doTest()
+    }
+
+    private fun doTest() {
+        myFixture.configureByFile(fileName)
+        val directives = InTextDirectivesUtils.findListWithPrefixes(FileUtil.loadFile(File(pathToFile), true), "// CLASS: ")
+        assertFalse("Specify CLASS directive in test file", directives.isEmpty())
+        val superClassName = directives[0]
+        val psiClass = getPsiClass(superClassName)
+        checkResult(DefinitionsScopedSearch.search(psiClass))
+
+        val origin = (psiClass as? KtLightClass)?.kotlinOrigin!!
+        checkResult(DefinitionsScopedSearch.search(origin))
+    }
+
+    override fun getTestDataPath(): String {
+        return File(PluginTestCaseBase.getTestDataPathBase(), "/search/definitions").path + File.separator
+
+    }
+}
\ No newline at end of file