diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/state/GenerationState.java b/compiler/backend/src/org/jetbrains/jet/codegen/state/GenerationState.java
index f94058a82ea..9a36657ba00 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/state/GenerationState.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/state/GenerationState.java
@@ -47,13 +47,6 @@ public class GenerationState {
     public interface GenerateClassFilter {
         boolean shouldProcess(JetClassOrObject classOrObject);
 
-        GenerateClassFilter ONLY_PACKAGE_CLASS = new GenerateClassFilter() {
-            @Override
-            public boolean shouldProcess(JetClassOrObject classOrObject) {
-                return false;
-            }
-        };
-
         GenerateClassFilter GENERATE_ALL = new GenerateClassFilter() {
             @Override
             public boolean shouldProcess(JetClassOrObject classOrObject) {
diff --git a/compiler/jet.as.java.psi/src/org/jetbrains/jet/asJava/KotlinJavaFileStubProvider.java b/compiler/jet.as.java.psi/src/org/jetbrains/jet/asJava/KotlinJavaFileStubProvider.java
index d8c2ebbbb57..802751d87ef 100644
--- a/compiler/jet.as.java.psi/src/org/jetbrains/jet/asJava/KotlinJavaFileStubProvider.java
+++ b/compiler/jet.as.java.psi/src/org/jetbrains/jet/asJava/KotlinJavaFileStubProvider.java
@@ -50,6 +50,7 @@ import org.jetbrains.jet.codegen.state.Progress;
 import org.jetbrains.jet.lang.descriptors.ClassDescriptor;
 import org.jetbrains.jet.lang.psi.JetClassOrObject;
 import org.jetbrains.jet.lang.psi.JetFile;
+import org.jetbrains.jet.lang.psi.JetPsiUtil;
 import org.jetbrains.jet.lang.resolve.BindingContext;
 import org.jetbrains.jet.lang.resolve.BindingContextUtils;
 import org.jetbrains.jet.lang.resolve.BindingTraceContext;
@@ -104,7 +105,14 @@ public class KotlinJavaFileStubProvider<T extends WithFileStubAndExtraDiagnostic
 
                     @Override
                     public GenerationState.GenerateClassFilter getGenerateClassFilter() {
-                        return GenerationState.GenerateClassFilter.ONLY_PACKAGE_CLASS;
+                        return new GenerationState.GenerateClassFilter() {
+                            @Override
+                            public boolean shouldProcess(JetClassOrObject classOrObject) {
+                                // Top-level classes and such should not be generated for performance reasons.
+                                // Local classes in top-level functions must still be generated
+                                return JetPsiUtil.isLocal(classOrObject);
+                            }
+                        };
                     }
 
                     @Override