diff --git a/idea/src/org/jetbrains/jet/plugin/completion/handlers/JetFunctionInsertHandler.java b/idea/src/org/jetbrains/jet/plugin/completion/handlers/JetFunctionInsertHandler.java
index 50ad3510465..9cabe5838a2 100644
--- a/idea/src/org/jetbrains/jet/plugin/completion/handlers/JetFunctionInsertHandler.java
+++ b/idea/src/org/jetbrains/jet/plugin/completion/handlers/JetFunctionInsertHandler.java
@@ -23,8 +23,11 @@ import com.intellij.codeInsight.lookup.LookupElement;
 import com.intellij.openapi.application.ApplicationManager;
 import com.intellij.openapi.editor.Document;
 import com.intellij.openapi.editor.Editor;
+import com.intellij.openapi.project.Project;
 import com.intellij.psi.PsiDocumentManager;
 import com.intellij.psi.PsiElement;
+import com.intellij.psi.codeStyle.CodeStyleSettings;
+import com.intellij.psi.codeStyle.CodeStyleSettingsManager;
 import com.intellij.psi.util.PsiTreeUtil;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.jet.lang.descriptors.DeclarationDescriptor;
@@ -35,6 +38,7 @@ import org.jetbrains.jet.lang.psi.JetQualifiedExpression;
 import org.jetbrains.jet.lang.resolve.DescriptorUtils;
 import org.jetbrains.jet.lang.resolve.name.FqName;
 import org.jetbrains.jet.plugin.completion.JetLookupObject;
+import org.jetbrains.jet.plugin.formatter.JetCodeStyleSettings;
 import org.jetbrains.jet.plugin.quickfix.ImportInsertHelper;
 
 /**
@@ -100,8 +104,14 @@ public class JetFunctionInsertHandler implements InsertHandler<LookupElement> {
         if (openingBracketIndex == -1) {
             // Insert ()/{} if it's not already exist
             if (braces) {
-                document.insertString(endOffset, " {}");
-                openingBracketIndex = endOffset + 1;
+                if (isInsertSpacesInOneLineFunctionEnabled(offsetElement.getProject())) {
+                    document.insertString(endOffset, " {  }");
+                    openingBracketIndex = endOffset + 2;
+                }
+                else {
+                    document.insertString(endOffset, " {}");
+                    openingBracketIndex = endOffset + 1;
+                }
             }
             else {
                 document.insertString(endOffset, "()");
@@ -125,6 +135,13 @@ public class JetFunctionInsertHandler implements InsertHandler<LookupElement> {
         PsiDocumentManager.getInstance(context.getProject()).commitDocument(context.getDocument());
     }
 
+    private static boolean isInsertSpacesInOneLineFunctionEnabled(Project project) {
+        CodeStyleSettings settings = CodeStyleSettingsManager.getSettings(project);
+        JetCodeStyleSettings jetSettings = settings.getCustomSettings(JetCodeStyleSettings.class);
+
+        return jetSettings.INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD;
+    }
+
     private static void addImport(final InsertionContext context, final @NotNull LookupElement item) {
         ApplicationManager.getApplication().runReadAction(new Runnable() {
             @Override
diff --git a/idea/testData/completion/handlers/FunctionLiteralInsertWhenNoSpacesForBraces.kt b/idea/testData/completion/handlers/FunctionLiteralInsertWhenNoSpacesForBraces.kt
new file mode 100644
index 00000000000..dc92137c7c7
--- /dev/null
+++ b/idea/testData/completion/handlers/FunctionLiteralInsertWhenNoSpacesForBraces.kt
@@ -0,0 +1,5 @@
+fun <T> jet.Array<T>.filter(predicate : (T) -> jet.Boolean) : java.util.List<T> = throw UnsupportedOperationException()
+
+fun main(args: Array<String>) {
+    args.fil<caret>
+}
diff --git a/idea/testData/completion/handlers/FunctionLiteralInsertWhenNoSpacesForBraces.kt.after b/idea/testData/completion/handlers/FunctionLiteralInsertWhenNoSpacesForBraces.kt.after
new file mode 100644
index 00000000000..83984db0e82
--- /dev/null
+++ b/idea/testData/completion/handlers/FunctionLiteralInsertWhenNoSpacesForBraces.kt.after
@@ -0,0 +1,5 @@
+fun <T> jet.Array<T>.filter(predicate : (T) -> jet.Boolean) : java.util.List<T> = throw UnsupportedOperationException()
+
+fun main(args: Array<String>) {
+    args.filter {<caret>}
+}
diff --git a/idea/testData/completion/handlers/HigherOrderFunction.kt.after b/idea/testData/completion/handlers/HigherOrderFunction.kt.after
index 83984db0e82..daeaa796a9e 100644
--- a/idea/testData/completion/handlers/HigherOrderFunction.kt.after
+++ b/idea/testData/completion/handlers/HigherOrderFunction.kt.after
@@ -1,5 +1,5 @@
 fun <T> jet.Array<T>.filter(predicate : (T) -> jet.Boolean) : java.util.List<T> = throw UnsupportedOperationException()
 
 fun main(args: Array<String>) {
-    args.filter {<caret>}
+    args.filter { <caret> }
 }
diff --git a/idea/tests/org/jetbrains/jet/completion/handlers/CompletionHandlerTest.java b/idea/tests/org/jetbrains/jet/completion/handlers/CompletionHandlerTest.java
index f54728abc05..e1a092f032d 100644
--- a/idea/tests/org/jetbrains/jet/completion/handlers/CompletionHandlerTest.java
+++ b/idea/tests/org/jetbrains/jet/completion/handlers/CompletionHandlerTest.java
@@ -23,9 +23,12 @@ import com.intellij.codeInsight.lookup.LookupElementPresentation;
 import com.intellij.codeInsight.lookup.LookupManager;
 import com.intellij.codeInsight.lookup.impl.LookupImpl;
 import com.intellij.openapi.projectRoots.Sdk;
+import com.intellij.psi.codeStyle.CodeStyleSettings;
+import com.intellij.psi.codeStyle.CodeStyleSettingsManager;
 import junit.framework.Assert;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jet.plugin.PluginTestCaseBase;
+import org.jetbrains.jet.plugin.formatter.JetCodeStyleSettings;
 
 import java.io.File;
 
@@ -76,6 +79,18 @@ public class CompletionHandlerTest extends LightCompletionTestCase {
         doTest();
     }
 
+    public void testFunctionLiteralInsertWhenNoSpacesForBraces() {
+        CodeStyleSettings settings = CodeStyleSettingsManager.getSettings(getProject());
+        JetCodeStyleSettings jetSettings = settings.getCustomSettings(JetCodeStyleSettings.class);
+
+        try {
+            jetSettings.INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD = false;
+            doTest();
+        } finally {
+            jetSettings.INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD = true;
+        }
+    }
+
     public void testHigherOrderFunction() {
         doTest();
     }