diff --git a/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/components/KtFirReferenceShortener.kt b/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/components/KtFirReferenceShortener.kt
index 9a3958ab2bb..88e1e3e07d5 100644
--- a/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/components/KtFirReferenceShortener.kt
+++ b/analysis/analysis-api-fir/src/org/jetbrains/kotlin/analysis/api/fir/components/KtFirReferenceShortener.kt
@@ -85,7 +85,7 @@ internal class KtFirReferenceShortener(
         val declarationToVisit = file.findSmallestElementOfTypeContainingSelection<KtDeclaration>(selection)
             ?: file
 
-        val firDeclaration = declarationToVisit.getCorrespondingFirDeclaration() ?: return ShortenCommandImpl(
+        val firDeclaration = declarationToVisit.getCorrespondingFirElement() ?: return ShortenCommandImpl(
             file.createSmartPointer(),
             importsToAdd = emptySet(),
             starImportsToAdd = emptySet(),
@@ -140,7 +140,7 @@ internal class KtFirReferenceShortener(
         )
     }
 
-    private fun KtElement.getCorrespondingFirDeclaration(): FirDeclaration? {
+    private fun KtElement.getCorrespondingFirElement(): FirElement? {
         require(this is KtFile || this is KtDeclaration)
 
         val firElement = getOrBuildFir(firResolveSession)
@@ -148,6 +148,7 @@ internal class KtFirReferenceShortener(
         return when (firElement) {
             is FirDeclaration -> firElement
             is FirAnonymousFunctionExpression -> firElement.anonymousFunction
+            is FirFunctionTypeParameter -> firElement
             else -> null
         }
     }
diff --git a/analysis/analysis-api-fir/tests-gen/org/jetbrains/kotlin/analysis/api/fir/test/cases/generated/cases/references/FirIdeNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java b/analysis/analysis-api-fir/tests-gen/org/jetbrains/kotlin/analysis/api/fir/test/cases/generated/cases/references/FirIdeNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java
index 582be5e8031..1d924bcc60f 100644
--- a/analysis/analysis-api-fir/tests-gen/org/jetbrains/kotlin/analysis/api/fir/test/cases/generated/cases/references/FirIdeNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java
+++ b/analysis/analysis-api-fir/tests-gen/org/jetbrains/kotlin/analysis/api/fir/test/cases/generated/cases/references/FirIdeNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java
@@ -274,6 +274,12 @@ public class FirIdeNormalAnalysisSourceModuleReferenceShortenerTestGenerated ext
         runTest("analysis/analysis-api/testData/components/referenceShortener/referenceShortener/extensionProperty_objectReceiverWithOtherThisInScope.kt");
     }
 
+    @Test
+    @TestMetadata("functionalType_parameterPosition.kt")
+    public void testFunctionalType_parameterPosition() throws Exception {
+        runTest("analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.kt");
+    }
+
     @Test
     @TestMetadata("kdoc.kt")
     public void testKdoc() throws Exception {
diff --git a/analysis/analysis-api-standalone/tests-gen/org/jetbrains/kotlin/analysis/api/standalone/fir/test/cases/generated/cases/references/FirStandaloneNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java b/analysis/analysis-api-standalone/tests-gen/org/jetbrains/kotlin/analysis/api/standalone/fir/test/cases/generated/cases/references/FirStandaloneNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java
index 2db1f48ced4..ec69a56374f 100644
--- a/analysis/analysis-api-standalone/tests-gen/org/jetbrains/kotlin/analysis/api/standalone/fir/test/cases/generated/cases/references/FirStandaloneNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java
+++ b/analysis/analysis-api-standalone/tests-gen/org/jetbrains/kotlin/analysis/api/standalone/fir/test/cases/generated/cases/references/FirStandaloneNormalAnalysisSourceModuleReferenceShortenerTestGenerated.java
@@ -274,6 +274,12 @@ public class FirStandaloneNormalAnalysisSourceModuleReferenceShortenerTestGenera
         runTest("analysis/analysis-api/testData/components/referenceShortener/referenceShortener/extensionProperty_objectReceiverWithOtherThisInScope.kt");
     }
 
+    @Test
+    @TestMetadata("functionalType_parameterPosition.kt")
+    public void testFunctionalType_parameterPosition() throws Exception {
+        runTest("analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.kt");
+    }
+
     @Test
     @TestMetadata("kdoc.kt")
     public void testKdoc() throws Exception {
diff --git a/analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.kt b/analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.kt
new file mode 100644
index 00000000000..e66d23b4181
--- /dev/null
+++ b/analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.kt
@@ -0,0 +1,9 @@
+// FILE: main.kt
+package test
+
+fun take(action: (<expr>dependency.Foo</expr>) -> Unit) {}
+
+// FILE: dependency.kt
+package dependency
+
+class Foo
diff --git a/analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.txt b/analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.txt
new file mode 100644
index 00000000000..737efb6d0e0
--- /dev/null
+++ b/analysis/analysis-api/testData/components/referenceShortener/referenceShortener/functionalType_parameterPosition.txt
@@ -0,0 +1,7 @@
+Before shortening: dependency.Foo
+with DO_NOT_SHORTEN:
+with SHORTEN_IF_ALREADY_IMPORTED:
+with SHORTEN_AND_IMPORT:
+[type] dependency.Foo
+with SHORTEN_AND_STAR_IMPORT:
+[type] dependency.Foo