diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt
index 54037ed2d90..74bb482094e 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/TypeAliasExpander.kt
@@ -103,6 +103,10 @@ class TypeAliasExpander(
                     argumentVariance
                 }
 
+        if (typeAliasArgument.isStarProjection) {
+            return TypeUtils.makeStarProjection(typeParameterDescriptor!!)
+        }
+
         val substitutedType = TypeUtils.makeNullableIfNeeded(typeAliasArgument.type, originalType.isMarkedNullable)
 
         return TypeProjectionImpl(substitutedVariance, substitutedType)
@@ -165,7 +169,7 @@ class TypeAliasExpander(
         val typeSubstitutor = TypeSubstitutor.create(substitutedType)
 
         substitutedType.arguments.forEachIndexed { i, substitutedArgument ->
-            if (!substitutedArgument.type.containsTypeAliasParameters()) {
+            if (!substitutedArgument.isStarProjection && !substitutedArgument.type.containsTypeAliasParameters()) {
                 val unsubstitutedArgument = unsubstitutedType.arguments[i]
                 val typeParameter = unsubstitutedType.constructor.parameters[i]
                 DescriptorResolver.checkBoundsInTypeAlias(reportStrategy, unsubstitutedArgument.type, substitutedArgument.type, typeParameter, typeSubstitutor)
diff --git a/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.kt b/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.kt
index d312988285f..721f69ed1ec 100644
--- a/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.kt
+++ b/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.kt
@@ -1,7 +1,14 @@
 typealias Array2D<T> = Array<Array<T>>
 
-fun foo(a: Array2D<out Number>) = a
+fun foo1(a: Array2D<out Number>) = a
 
-fun bar(a: Array2D<Int>) {
-    foo(<!TYPE_MISMATCH!>a<!>)
-}
\ No newline at end of file
+fun bar1(a: Array2D<Int>) =
+        foo1(<!TYPE_MISMATCH(Array2D<out Number> [= Array<Array<out Number>>]; Array2D<Int> [= Array<Array<Int>>])!>a<!>)
+
+
+typealias TMap<T> = Map<T, T>
+
+fun <T> foo2(m: TMap<T>) = m
+
+fun bar2(m: TMap<*>) =
+        <!TYPE_INFERENCE_CONFLICTING_SUBSTITUTIONS!>foo2<!>(m)
diff --git a/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.txt b/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.txt
index cce939e20cc..61a00d8cb99 100644
--- a/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.txt
+++ b/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.txt
@@ -1,5 +1,8 @@
 package
 
 public typealias Array2D</*0*/ T>  = kotlin.Array<kotlin.Array<T>>
-public fun bar(/*0*/ a: Array2D<kotlin.Int> [= kotlin.Array<kotlin.Array<kotlin.Int>>]): kotlin.Unit
-public fun foo(/*0*/ a: Array2D<out kotlin.Number> [= kotlin.Array<kotlin.Array<out kotlin.Number>>]): Array2D<out kotlin.Number> [= kotlin.Array<kotlin.Array<out kotlin.Number>>]
+public typealias TMap</*0*/ T>  = kotlin.collections.Map<T, T>
+public fun bar1(/*0*/ a: Array2D<kotlin.Int> [= kotlin.Array<kotlin.Array<kotlin.Int>>]): Array2D<out kotlin.Number> [= kotlin.Array<kotlin.Array<out kotlin.Number>>]
+public fun bar2(/*0*/ m: TMap<*> [= kotlin.collections.Map<*, *>]): [ERROR : Error function type]
+public fun foo1(/*0*/ a: Array2D<out kotlin.Number> [= kotlin.Array<kotlin.Array<out kotlin.Number>>]): Array2D<out kotlin.Number> [= kotlin.Array<kotlin.Array<out kotlin.Number>>]
+public fun </*0*/ T> foo2(/*0*/ m: TMap<T> [= kotlin.collections.Map<T, out T>]): TMap<T> [= kotlin.collections.Map<T, out T>]
diff --git a/compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.kt b/compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.kt
new file mode 100644
index 00000000000..4f98fe9a121
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.kt
@@ -0,0 +1,6 @@
+class NumCharSeq<N : Number, M : CharSequence>(val n: N, val m: M)
+
+typealias Test<X, Y> = NumCharSeq<X, Y>
+
+fun getN(t: Test<*, *>) = t.n
+fun getM(t: Test<*, *>) = t.m
diff --git a/compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.txt b/compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.txt
new file mode 100644
index 00000000000..7683a5da480
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.txt
@@ -0,0 +1,14 @@
+package
+
+public typealias Test</*0*/ X, /*1*/ Y>  = NumCharSeq<X, Y>
+public fun getM(/*0*/ t: Test<*, *> [= NumCharSeq<*, *>]): kotlin.CharSequence
+public fun getN(/*0*/ t: Test<*, *> [= NumCharSeq<*, *>]): kotlin.Number
+
+public final class NumCharSeq</*0*/ N : kotlin.Number, /*1*/ M : kotlin.CharSequence> {
+    public constructor NumCharSeq</*0*/ N : kotlin.Number, /*1*/ M : kotlin.CharSequence>(/*0*/ n: N, /*1*/ m: M)
+    public final val m: M
+    public final val n: N
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 9158f70b57b..ac292d24ce9 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -19605,6 +19605,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 doTest(fileName);
             }
 
+            @TestMetadata("starProjectionInTypeAliasArgument.kt")
+            public void testStarProjectionInTypeAliasArgument() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/typealias/starProjectionInTypeAliasArgument.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("substitutionVariance.kt")
             public void testSubstitutionVariance() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/typealias/substitutionVariance.kt");