diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 7504304d5e1..194371371ba 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -130,6 +130,7 @@ public interface Errors {
     DiagnosticFactory0<KtParameter> REIFIED_TYPE_IN_CATCH_CLAUSE = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<KtTypeParameterList> GENERIC_THROWABLE_SUBCLASS = DiagnosticFactory0.create(ERROR);
 
+    DiagnosticFactory0<KtTypeAlias> TOPLEVEL_TYPEALIASES_ONLY = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory1<KtElement, ClassifierDescriptor> RECURSIVE_TYPEALIAS_EXPANSION = DiagnosticFactory1.create(ERROR);
     DiagnosticFactory3<KtElement, KotlinType, KotlinType, ClassifierDescriptor> UPPER_BOUND_VIOLATED_IN_TYPEALIAS_EXPANSION =
             DiagnosticFactory3.create(ERROR);
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
index 6ebfa9c9652..2c42764f4c1 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
@@ -434,6 +434,7 @@ public class DefaultErrorMessages {
         MAP.put(USELESS_ELVIS_RIGHT_IS_NULL, "Right operand of elvis operator (?:) is useless if it is null");
         MAP.put(CONFLICTING_UPPER_BOUNDS, "Upper bounds of {0} have empty intersection", NAME);
 
+        MAP.put(TOPLEVEL_TYPEALIASES_ONLY, "Nested and local type aliases are not supported");
         MAP.put(RECURSIVE_TYPEALIAS_EXPANSION, "Recursive type alias in expansion: {0}", NAME);
         MAP.put(UPPER_BOUND_VIOLATED_IN_TYPEALIAS_EXPANSION,
                 "Type argument resulting from type alias expansion is not within required bounds for ''{2}'': " +
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/DescriptorResolver.java b/compiler/frontend/src/org/jetbrains/kotlin/resolve/DescriptorResolver.java
index d62fc438cbb..7dd21eff761 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/DescriptorResolver.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/DescriptorResolver.java
@@ -661,6 +661,10 @@ public class DescriptorResolver {
             @NotNull KtTypeAlias typeAlias,
             @NotNull final BindingTrace trace
     ) {
+        if (!(containingDeclaration instanceof PackageFragmentDescriptor)) {
+            trace.report(TOPLEVEL_TYPEALIASES_ONLY.on(typeAlias));
+        }
+
         KtModifierList modifierList = typeAlias.getModifierList();
         Visibility visibility = resolveVisibilityFromModifiers(typeAlias, getDefaultVisibility(typeAlias, containingDeclaration));
 
diff --git a/compiler/testData/codegen/box/annotations/annotationsOnTypeAliases.kt b/compiler/testData/codegen/box/annotations/annotationsOnTypeAliases.kt
index d64dc4455ad..3e49c7af76d 100644
--- a/compiler/testData/codegen/box/annotations/annotationsOnTypeAliases.kt
+++ b/compiler/testData/codegen/box/annotations/annotationsOnTypeAliases.kt
@@ -12,11 +12,6 @@ import java.lang.Class
 @Retention(RUNTIME)
 annotation class Ann(val x: Int)
 
-class C {
-    @Ann(1)
-    typealias TA = Any
-}
-
 @Ann(2)
 typealias TA = Any
 
@@ -28,7 +23,6 @@ fun Class<*>.assertHasDeclaredMethodWithAnn() {
 
 fun box(): String {
     Class.forName("AnnotationsOnTypeAliasesKt").assertHasDeclaredMethodWithAnn()
-    Class.forName("C").assertHasDeclaredMethodWithAnn()
 
     return "OK"
 }
\ No newline at end of file
diff --git a/compiler/testData/codegen/box/typealias/localTypeAlias.kt b/compiler/testData/codegen/box/typealias/localTypeAlias.kt
deleted file mode 100644
index 406bbaaf675..00000000000
--- a/compiler/testData/codegen/box/typealias/localTypeAlias.kt
+++ /dev/null
@@ -1,16 +0,0 @@
-class Cell<TC>(val x: TC)
-
-object OkHost {
-    val value = "OK"
-}
-
-fun <T> id(x: T): T {
-    typealias C = Cell<T>
-    val c: C = C(x)
-    return c.x
-}
-
-fun box(): String {
-    typealias OK = OkHost
-    return id(OK.value)
-}
\ No newline at end of file
diff --git a/compiler/testData/compileKotlinAgainstCustomBinaries/typeAliasesAreInvisibleInCompatibilityMode/typeAliases.kt b/compiler/testData/compileKotlinAgainstCustomBinaries/typeAliasesAreInvisibleInCompatibilityMode/typeAliases.kt
index a2733f9cde4..cebf94074ef 100644
--- a/compiler/testData/compileKotlinAgainstCustomBinaries/typeAliasesAreInvisibleInCompatibilityMode/typeAliases.kt
+++ b/compiler/testData/compileKotlinAgainstCustomBinaries/typeAliasesAreInvisibleInCompatibilityMode/typeAliases.kt
@@ -4,6 +4,7 @@ typealias Str = String
 typealias L<T> = List<T>
 
 class Klass {
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     typealias Nested = Z
 
     class Z
diff --git a/compiler/testData/compileKotlinAgainstKotlin/annotationsOnTypeAliases.kt b/compiler/testData/compileKotlinAgainstKotlin/annotationsOnTypeAliases.kt
index 5f543474085..1bb272ce4f9 100644
--- a/compiler/testData/compileKotlinAgainstKotlin/annotationsOnTypeAliases.kt
+++ b/compiler/testData/compileKotlinAgainstKotlin/annotationsOnTypeAliases.kt
@@ -9,11 +9,6 @@ import java.lang.Class
 @Retention(RUNTIME)
 annotation class Ann(val x: Int)
 
-class C {
-    @Ann(1)
-    typealias TA = Any
-}
-
 @Ann(2)
 typealias TA = Any
 
@@ -28,7 +23,6 @@ fun Class<*>.assertHasDeclaredMethodWithAnn() {
 
 fun box(): String {
     Class.forName("a.AKt").assertHasDeclaredMethodWithAnn()
-    Class.forName("a.C").assertHasDeclaredMethodWithAnn()
 
     return "OK"
 }
\ No newline at end of file
diff --git a/compiler/testData/compileKotlinAgainstKotlin/typeAliasesKt13181.kt b/compiler/testData/compileKotlinAgainstKotlin/typeAliasesKt13181.kt
index 36af0a7041d..101c79e0cbd 100644
--- a/compiler/testData/compileKotlinAgainstKotlin/typeAliasesKt13181.kt
+++ b/compiler/testData/compileKotlinAgainstKotlin/typeAliasesKt13181.kt
@@ -1,14 +1,15 @@
 // FILE: A.kt
-class Foo<out T>(val t: T) {
-    typealias Bar = (T) -> String
+typealias Bar<T> = (T) -> String
 
-    fun baz(b: Bar) = b(t)
+class Foo<out T>(val t: T) {
+
+    fun baz(b: Bar<T>) = b(t)
 }
 
 // FILE: B.kt
 class FooTest {
     fun baz(): String {
-        val b: Foo<String>.Bar = { "OK" }
+        val b: Bar<String> = { "OK" }
         return Foo("").baz(b)
     }
 }
diff --git a/compiler/testData/diagnostics/tests/Underscore.kt b/compiler/testData/diagnostics/tests/Underscore.kt
index 57628b74cdd..c105b42c706 100644
--- a/compiler/testData/diagnostics/tests/Underscore.kt
+++ b/compiler/testData/diagnostics/tests/Underscore.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -DEPRECATION
+// !DIAGNOSTICS: -DEPRECATION -TOPLEVEL_TYPEALIASES_ONLY
 
 <!UNDERSCORE_IS_RESERVED!>import kotlin.Deprecated as ___<!>
 
diff --git a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClasses.kt b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClasses.kt
index e18c775114d..e3eb0306134 100644
--- a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClasses.kt
+++ b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClasses.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 // !CHECK_TYPE
 open class Outer<X, Y> {
     inner class Inner<Z>
diff --git a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocal.kt b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocal.kt
index 842ef7c9f31..9c539118aaf 100644
--- a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocal.kt
+++ b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocal.kt
@@ -1,5 +1,5 @@
 // !CHECK_TYPE
-// !DIAGNOSTICS: -UNUSED_VALUE -VARIABLE_WITH_REDUNDANT_INITIALIZER
+// !DIAGNOSTICS: -UNUSED_VALUE -VARIABLE_WITH_REDUNDANT_INITIALIZER -TOPLEVEL_TYPEALIASES_ONLY
 
 class A<R1, R2, R3, R4>
 
diff --git a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocalInsideInner.kt b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocalInsideInner.kt
index 567138ce181..9828d09cbf6 100644
--- a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocalInsideInner.kt
+++ b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesLocalInsideInner.kt
@@ -1,5 +1,5 @@
 // !CHECK_TYPE
-// !DIAGNOSTICS: -UNUSED_VALUE -VARIABLE_WITH_REDUNDANT_INITIALIZER
+// !DIAGNOSTICS: -UNUSED_VALUE -VARIABLE_WITH_REDUNDANT_INITIALIZER -TOPLEVEL_TYPEALIASES_ONLY
 
 class A<R1, R2, R3, R4, R5, R6>
 
diff --git a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesTransitive.kt b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesTransitive.kt
index 999d7b35805..cad9c6080c1 100644
--- a/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesTransitive.kt
+++ b/compiler/testData/diagnostics/tests/generics/innerClasses/implicitArguments/fromSuperClassesTransitive.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 // !CHECK_TYPE
 open class Outer<X, Y> {
     inner class Inner<Z>
diff --git a/compiler/testData/diagnostics/tests/redeclarations/TypeAliasCtorVsFun.kt b/compiler/testData/diagnostics/tests/redeclarations/TypeAliasCtorVsFun.kt
index 0dbe690a9b7..cfc7154da29 100644
--- a/compiler/testData/diagnostics/tests/redeclarations/TypeAliasCtorVsFun.kt
+++ b/compiler/testData/diagnostics/tests/redeclarations/TypeAliasCtorVsFun.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 class C(val x: Int)
 
 <!CONFLICTING_OVERLOADS!>typealias CC = C<!>
diff --git a/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsClass.kt b/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsClass.kt
index 91ca8217ae6..09cab9f306e 100644
--- a/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsClass.kt
+++ b/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsClass.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 // FILE: file1.kt
 class <!PACKAGE_OR_CLASSIFIER_REDECLARATION!>SomeClass<!>
 
diff --git a/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsProperty.kt b/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsProperty.kt
index 8ec4cbb1da4..c5ed0d0fccf 100644
--- a/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsProperty.kt
+++ b/compiler/testData/diagnostics/tests/redeclarations/TypeAliasVsProperty.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 // FILE: file1.kt
 typealias <!REDECLARATION!>Test<!> = String
 
diff --git a/compiler/testData/diagnostics/tests/typealias/aliasesOnly.kt b/compiler/testData/diagnostics/tests/typealias/aliasesOnly.kt
index 61663d1776a..6d283e0cf15 100644
--- a/compiler/testData/diagnostics/tests/typealias/aliasesOnly.kt
+++ b/compiler/testData/diagnostics/tests/typealias/aliasesOnly.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 typealias S = String
 
 class C {
diff --git a/compiler/testData/diagnostics/tests/typealias/capturingTypeParametersFromOuterClass.kt b/compiler/testData/diagnostics/tests/typealias/capturingTypeParametersFromOuterClass.kt
index 80e6fb8b3c5..2c65e384b2a 100644
--- a/compiler/testData/diagnostics/tests/typealias/capturingTypeParametersFromOuterClass.kt
+++ b/compiler/testData/diagnostics/tests/typealias/capturingTypeParametersFromOuterClass.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 
 class Outer<TO> {
     typealias LTO = List<TO>
diff --git a/compiler/testData/diagnostics/tests/typealias/exposedExpandedType.kt b/compiler/testData/diagnostics/tests/typealias/exposedExpandedType.kt
index b8a866b27f5..95b74061881 100644
--- a/compiler/testData/diagnostics/tests/typealias/exposedExpandedType.kt
+++ b/compiler/testData/diagnostics/tests/typealias/exposedExpandedType.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 typealias L<T> = List<T>
 
 class Outer {
diff --git a/compiler/testData/diagnostics/tests/typealias/import.kt b/compiler/testData/diagnostics/tests/typealias/import.kt
index 53769ee9cea..d370c3d0978 100644
--- a/compiler/testData/diagnostics/tests/typealias/import.kt
+++ b/compiler/testData/diagnostics/tests/typealias/import.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 // FILE: file1.kt
 package package1
 
diff --git a/compiler/testData/diagnostics/tests/typealias/inheritedNestedTypeAlias.kt b/compiler/testData/diagnostics/tests/typealias/inheritedNestedTypeAlias.kt
index 2aec76fb48d..d0e84053c88 100644
--- a/compiler/testData/diagnostics/tests/typealias/inheritedNestedTypeAlias.kt
+++ b/compiler/testData/diagnostics/tests/typealias/inheritedNestedTypeAlias.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 interface ICell<T> {
     val x: T
 }
diff --git a/compiler/testData/diagnostics/tests/typealias/inhreritedTypeAliasQualifiedByDerivedClass.kt b/compiler/testData/diagnostics/tests/typealias/inhreritedTypeAliasQualifiedByDerivedClass.kt
index 56e21d660e4..82ed7bc5acf 100644
--- a/compiler/testData/diagnostics/tests/typealias/inhreritedTypeAliasQualifiedByDerivedClass.kt
+++ b/compiler/testData/diagnostics/tests/typealias/inhreritedTypeAliasQualifiedByDerivedClass.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 
 open class Base {
     typealias Nested = String
diff --git a/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType.kt b/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType.kt
index a47821a691c..e18864204f0 100644
--- a/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType.kt
+++ b/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class Outer<T> {
     class Nested
     class GenericNested<TT>
diff --git a/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType2.kt b/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType2.kt
index e51653d15ef..f1a2018e98d 100644
--- a/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType2.kt
+++ b/compiler/testData/diagnostics/tests/typealias/innerTypeAliasAsType2.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class C<T> {
     inner class D
 
diff --git a/compiler/testData/diagnostics/tests/typealias/innerTypeAliasConstructor.kt b/compiler/testData/diagnostics/tests/typealias/innerTypeAliasConstructor.kt
index fe4f8812f82..f870fa0a89b 100644
--- a/compiler/testData/diagnostics/tests/typealias/innerTypeAliasConstructor.kt
+++ b/compiler/testData/diagnostics/tests/typealias/innerTypeAliasConstructor.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class Pair<X, Y>(val x: X, val y: Y)
 
 class C<T> {
diff --git a/compiler/testData/diagnostics/tests/typealias/kt14518.kt b/compiler/testData/diagnostics/tests/typealias/kt14518.kt
index df4b929eaa7..bfc2ceb1008 100644
--- a/compiler/testData/diagnostics/tests/typealias/kt14518.kt
+++ b/compiler/testData/diagnostics/tests/typealias/kt14518.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class OuterClass<T1> {
     class NestedClass<T2>
     typealias NestedType<T> = NestedClass<T>
diff --git a/compiler/testData/diagnostics/tests/typealias/kt14641.kt b/compiler/testData/diagnostics/tests/typealias/kt14641.kt
index d9a1dfa847e..19cce4033ae 100644
--- a/compiler/testData/diagnostics/tests/typealias/kt14641.kt
+++ b/compiler/testData/diagnostics/tests/typealias/kt14641.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class A {
     public inner class B { }
     public typealias BAlias = B
diff --git a/compiler/testData/diagnostics/tests/typealias/localTypeAlias.kt b/compiler/testData/diagnostics/tests/typealias/localTypeAlias.kt
index 7ff40630d07..a7c55d93331 100644
--- a/compiler/testData/diagnostics/tests/typealias/localTypeAlias.kt
+++ b/compiler/testData/diagnostics/tests/typealias/localTypeAlias.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 
 fun <T> emptyList(): List<T> = null!!
 
diff --git a/compiler/testData/diagnostics/tests/typealias/localTypeAliasConstructor.kt b/compiler/testData/diagnostics/tests/typealias/localTypeAliasConstructor.kt
index 39dfb06c5dc..d8fca8bb127 100644
--- a/compiler/testData/diagnostics/tests/typealias/localTypeAliasConstructor.kt
+++ b/compiler/testData/diagnostics/tests/typealias/localTypeAliasConstructor.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 
 class Cell<TC>(val x: TC)
 
diff --git a/compiler/testData/diagnostics/tests/typealias/localTypeAliasModifiers.kt b/compiler/testData/diagnostics/tests/typealias/localTypeAliasModifiers.kt
index d08d1b5e6aa..d3d24d7c4ac 100644
--- a/compiler/testData/diagnostics/tests/typealias/localTypeAliasModifiers.kt
+++ b/compiler/testData/diagnostics/tests/typealias/localTypeAliasModifiers.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 fun outer() {
     <!WRONG_MODIFIER_TARGET!>companion<!> typealias TestLocal = Any
 }
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/typealias/localTypeAliasRecursive.kt b/compiler/testData/diagnostics/tests/typealias/localTypeAliasRecursive.kt
index b84a1be05c5..8db07dd92f5 100644
--- a/compiler/testData/diagnostics/tests/typealias/localTypeAliasRecursive.kt
+++ b/compiler/testData/diagnostics/tests/typealias/localTypeAliasRecursive.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 fun outer() {
     typealias Test1 = <!RECURSIVE_TYPEALIAS_EXPANSION!>Test1<!>
     typealias Test2 = <!RECURSIVE_TYPEALIAS_EXPANSION!>List<Test2><!>
diff --git a/compiler/testData/diagnostics/tests/typealias/nested.kt b/compiler/testData/diagnostics/tests/typealias/nested.kt
index 0916f68de9b..b895319f19a 100644
--- a/compiler/testData/diagnostics/tests/typealias/nested.kt
+++ b/compiler/testData/diagnostics/tests/typealias/nested.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 
 class Pair<T1, T2>(val x1: T1, val x2: T2)
 
diff --git a/compiler/testData/diagnostics/tests/typealias/nestedCapturingTypeParameters.kt b/compiler/testData/diagnostics/tests/typealias/nestedCapturingTypeParameters.kt
index 67fbafb45f6..b908bce1e04 100644
--- a/compiler/testData/diagnostics/tests/typealias/nestedCapturingTypeParameters.kt
+++ b/compiler/testData/diagnostics/tests/typealias/nestedCapturingTypeParameters.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class Pair<T1, T2>(val x1: T1, val x2: T2)
 
 class C<T> {
diff --git a/compiler/testData/diagnostics/tests/typealias/nestedSubstituted.kt b/compiler/testData/diagnostics/tests/typealias/nestedSubstituted.kt
index b045cd7bbdc..e5ec2fb2f50 100644
--- a/compiler/testData/diagnostics/tests/typealias/nestedSubstituted.kt
+++ b/compiler/testData/diagnostics/tests/typealias/nestedSubstituted.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
 
 class Pair<T1, T2>(val x1: T1, val x2: T2)
 
diff --git a/compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.kt b/compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.kt
new file mode 100644
index 00000000000..f5b85f53ba4
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.kt
@@ -0,0 +1,19 @@
+typealias TopLevel = Any
+
+interface A {
+    <!TOPLEVEL_TYPEALIASES_ONLY!>typealias Nested = Any<!>
+}
+
+class C {
+    <!TOPLEVEL_TYPEALIASES_ONLY!>typealias Nested = Any<!>
+    class D {
+        <!TOPLEVEL_TYPEALIASES_ONLY!>typealias Nested = Any<!>
+        fun foo() {
+            <!TOPLEVEL_TYPEALIASES_ONLY!>typealias LocalInMember = Any<!>
+        }
+    }
+}
+
+fun foo() {
+    <!TOPLEVEL_TYPEALIASES_ONLY!>typealias Local = Any<!>
+}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.txt b/compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.txt
new file mode 100644
index 00000000000..a3328cb0775
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.txt
@@ -0,0 +1,28 @@
+package
+
+public fun foo(): kotlin.Unit
+
+public interface A {
+    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
+    public typealias Nested = kotlin.Any
+}
+
+public final class C {
+    public constructor C()
+    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
+
+    public final class D {
+        public constructor D()
+        public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+        public final fun foo(): kotlin.Unit
+        public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+        public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+        public typealias Nested = kotlin.Any
+    }
+    public typealias Nested = kotlin.Any
+}
+public typealias TopLevel = kotlin.Any
diff --git a/compiler/testData/diagnostics/tests/typealias/typeAliasAsBareType.kt b/compiler/testData/diagnostics/tests/typealias/typeAliasAsBareType.kt
index a3bfa09e3d9..75ab9223ce8 100644
--- a/compiler/testData/diagnostics/tests/typealias/typeAliasAsBareType.kt
+++ b/compiler/testData/diagnostics/tests/typealias/typeAliasAsBareType.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 typealias L<T> = List<T>
 typealias NL<T> = List<T>?
 typealias LStar<<!UNUSED_TYPEALIAS_PARAMETER!>T<!>> = List<*>
diff --git a/compiler/testData/diagnostics/tests/typealias/typeAliasAsQualifier.kt b/compiler/testData/diagnostics/tests/typealias/typeAliasAsQualifier.kt
index 05530955c77..b8872860e74 100644
--- a/compiler/testData/diagnostics/tests/typealias/typeAliasAsQualifier.kt
+++ b/compiler/testData/diagnostics/tests/typealias/typeAliasAsQualifier.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 class C {
     typealias Self = C
     class Nested {
diff --git a/compiler/testData/diagnostics/tests/typealias/typeAliasAsSuperQualifier.kt b/compiler/testData/diagnostics/tests/typealias/typeAliasAsSuperQualifier.kt
index 8f0ab7e25ab..749d9156199 100644
--- a/compiler/testData/diagnostics/tests/typealias/typeAliasAsSuperQualifier.kt
+++ b/compiler/testData/diagnostics/tests/typealias/typeAliasAsSuperQualifier.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 open class Base {
     open fun foo() {}
 }
diff --git a/compiler/testData/diagnostics/tests/typealias/typeAliasConstructorWrongClass.kt b/compiler/testData/diagnostics/tests/typealias/typeAliasConstructorWrongClass.kt
index 6dcfef457ed..c2a6412fd1e 100644
--- a/compiler/testData/diagnostics/tests/typealias/typeAliasConstructorWrongClass.kt
+++ b/compiler/testData/diagnostics/tests/typealias/typeAliasConstructorWrongClass.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 abstract class AbstractClass
 typealias Test1 = AbstractClass
 val test1 = <!CREATING_AN_INSTANCE_OF_ABSTRACT_CLASS!>Test1()<!>
diff --git a/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt b/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt
index c61c176063c..cb983b263cb 100644
--- a/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt
+++ b/compiler/testData/diagnostics/tests/typealias/typeAliasShouldExpandToClass.kt
@@ -1,3 +1,5 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE -UNUSED_PARAMETER -TOPLEVEL_TYPEALIASES_ONLY
+
 typealias ToTypeParam1<T> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>T<!>
 typealias ToTypeParam2<T> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam1<T><!>
 typealias ToTypeParam3<T1, <!UNUSED_TYPEALIAS_PARAMETER!>T2<!>> = <!TYPEALIAS_SHOULD_EXPAND_TO_CLASS!>ToTypeParam2<T1><!>
diff --git a/compiler/testData/ir/irText/declarations/typeAlias.kt b/compiler/testData/ir/irText/declarations/typeAlias.kt
index 9b366d74dd5..78a67277d76 100644
--- a/compiler/testData/ir/irText/declarations/typeAlias.kt
+++ b/compiler/testData/ir/irText/declarations/typeAlias.kt
@@ -1,9 +1,11 @@
 typealias Test1 = String
 
 fun foo() {
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     typealias TestLocal = String
 }
 
 class C {
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     typealias TestNested = String
 }
\ No newline at end of file
diff --git a/compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt b/compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt
deleted file mode 100644
index 263571951e8..00000000000
--- a/compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt
+++ /dev/null
@@ -1,18 +0,0 @@
-//ALLOW_AST_ACCESS
-package test
-
-open class Pair<T1, T2>
-open class Triple<T1, T2, T3>
-
-class Outer<X> {
-    inner class InnerTest1<A>: Pair<X, A>()
-    typealias Test1<A> = Pair<X, A>
-
-    class Nested<Y> {
-        typealias Test2<B> = Pair<Y, B>
-    }
-
-    inner class Inner<Z> {
-        typealias Test3<C> = Triple<X, Z, C>
-    }
-}
diff --git a/compiler/testData/loadJava/compiledKotlin/typealias/Nested.txt b/compiler/testData/loadJava/compiledKotlin/typealias/Nested.txt
deleted file mode 100644
index a8908a84e3b..00000000000
--- a/compiler/testData/loadJava/compiledKotlin/typealias/Nested.txt
+++ /dev/null
@@ -1,28 +0,0 @@
-package test
-
-public final class Outer</*0*/ X> {
-    /*primary*/ public constructor Outer</*0*/ X>()
-
-    public final inner class Inner</*0*/ Z> /*captured type parameters: /*1*/ X*/ {
-        /*primary*/ public constructor Inner</*0*/ Z>()
-        public typealias Test3</*0*/ C>  /*captured type parameters: /*1*/ Z, /*2*/ X*/ = test.Triple<X, Z, C>
-    }
-
-    public final inner class InnerTest1</*0*/ A> /*captured type parameters: /*1*/ X*/ : test.Pair<X, A> {
-        /*primary*/ public constructor InnerTest1</*0*/ A>()
-    }
-
-    public final class Nested</*0*/ Y> {
-        /*primary*/ public constructor Nested</*0*/ Y>()
-        public typealias Test2</*0*/ B>  /*captured type parameters: /*1*/ Y*/ = test.Pair<Y, B>
-    }
-    public typealias Test1</*0*/ A>  /*captured type parameters: /*1*/ X*/ = test.Pair<X, A>
-}
-
-public open class Pair</*0*/ T1, /*1*/ T2> {
-    /*primary*/ public constructor Pair</*0*/ T1, /*1*/ T2>()
-}
-
-public open class Triple</*0*/ T1, /*1*/ T2, /*2*/ T3> {
-    /*primary*/ public constructor Triple</*0*/ T1, /*1*/ T2, /*2*/ T3>()
-}
diff --git a/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java b/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
index 3217dde5595..3c1550df7bc 100644
--- a/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
+++ b/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
@@ -16193,12 +16193,6 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
             doTest(fileName);
         }
 
-        @TestMetadata("localTypeAlias.kt")
-        public void testLocalTypeAlias() throws Exception {
-            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/typealias/localTypeAlias.kt");
-            doTest(fileName);
-        }
-
         @TestMetadata("simple.kt")
         public void testSimple() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/typealias/simple.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 78bdf86f06e..7eddcd81531 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -21106,6 +21106,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 doTest(fileName);
             }
 
+            @TestMetadata("topLevelTypeAliasesOnly.kt")
+            public void testTopLevelTypeAliasesOnly() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/typealias/topLevelTypeAliasesOnly.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("typeAliasArgumentsInCompanionObject.kt")
             public void testTypeAliasArgumentsInCompanionObject() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/typealias/typeAliasArgumentsInCompanionObject.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index 6a75b67f035..d83f5816943 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -16193,12 +16193,6 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest(fileName);
         }
 
-        @TestMetadata("localTypeAlias.kt")
-        public void testLocalTypeAlias() throws Exception {
-            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/typealias/localTypeAlias.kt");
-            doTest(fileName);
-        }
-
         @TestMetadata("simple.kt")
         public void testSimple() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/typealias/simple.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadJavaTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadJavaTestGenerated.java
index f63605e1776..0e5ab3715d1 100644
--- a/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadJavaTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadJavaTestGenerated.java
@@ -4837,12 +4837,6 @@ public class LoadJavaTestGenerated extends AbstractLoadJavaTest {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Generic.kt");
                 doTestCompiledKotlin(fileName);
             }
-
-            @TestMetadata("Nested.kt")
-            public void testNested() throws Exception {
-                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt");
-                doTestCompiledKotlin(fileName);
-            }
         }
 
         @TestMetadata("compiler/testData/loadJava/compiledKotlin/visibility")
diff --git a/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadKotlinWithTypeTableTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadKotlinWithTypeTableTestGenerated.java
index 5321b9a246a..4c8223a122b 100644
--- a/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadKotlinWithTypeTableTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/jvm/compiler/LoadKotlinWithTypeTableTestGenerated.java
@@ -3070,12 +3070,6 @@ public class LoadKotlinWithTypeTableTestGenerated extends AbstractLoadKotlinWith
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Generic.kt");
             doTest(fileName);
         }
-
-        @TestMetadata("Nested.kt")
-        public void testNested() throws Exception {
-            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt");
-            doTest(fileName);
-        }
     }
 
     @TestMetadata("compiler/testData/loadJava/compiledKotlin/visibility")
diff --git a/compiler/tests/org/jetbrains/kotlin/jvm/runtime/JvmRuntimeDescriptorLoaderTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/jvm/runtime/JvmRuntimeDescriptorLoaderTestGenerated.java
index 0b1fcad2eef..05219ad1a15 100644
--- a/compiler/tests/org/jetbrains/kotlin/jvm/runtime/JvmRuntimeDescriptorLoaderTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/jvm/runtime/JvmRuntimeDescriptorLoaderTestGenerated.java
@@ -3072,12 +3072,6 @@ public class JvmRuntimeDescriptorLoaderTestGenerated extends AbstractJvmRuntimeD
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Generic.kt");
                 doTest(fileName);
             }
-
-            @TestMetadata("Nested.kt")
-            public void testNested() throws Exception {
-                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt");
-                doTest(fileName);
-            }
         }
 
         @TestMetadata("compiler/testData/loadJava/compiledKotlin/visibility")
diff --git a/idea/idea-core/src/org/jetbrains/kotlin/idea/core/ShortenReferences.kt b/idea/idea-core/src/org/jetbrains/kotlin/idea/core/ShortenReferences.kt
index f54c790d63a..abe2a9974d1 100644
--- a/idea/idea-core/src/org/jetbrains/kotlin/idea/core/ShortenReferences.kt
+++ b/idea/idea-core/src/org/jetbrains/kotlin/idea/core/ShortenReferences.kt
@@ -260,12 +260,12 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
 
                 val toBeShortened: Boolean
                 when (result) {
-                    is ShortenNow -> {
+                    is AnalyzeQualifiedElementResult.ShortenNow -> {
                         elementsToShorten.add(element)
                         toBeShortened = true
                     }
 
-                    is ImportDescriptors -> {
+                    is AnalyzeQualifiedElementResult.ImportDescriptors -> {
                         val tryImport = result.descriptors.isNotEmpty()
                                         && result.descriptors.none { it in failedToImportDescriptors }
                                         && result.descriptors.all { mayImport(it, file) }
@@ -278,7 +278,7 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
                         }
                     }
 
-                    is Skip -> {
+                    is AnalyzeQualifiedElementResult.Skip -> {
                         toBeShortened = false
                     }
                 }
@@ -305,10 +305,6 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
             class ImportDescriptors(val descriptors: Collection<DeclarationDescriptor>) : AnalyzeQualifiedElementResult()
         }
 
-        typealias Skip = AnalyzeQualifiedElementResult.Skip
-        typealias ShortenNow = AnalyzeQualifiedElementResult.ShortenNow
-        typealias ImportDescriptors = AnalyzeQualifiedElementResult.ImportDescriptors
-
         protected abstract fun shortenElement(element: TElement): KtElement
 
         fun shortenElements(elementSetToUpdate: MutableSet<KtElement>) {
@@ -357,10 +353,10 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
                 }
 
         override fun analyzeQualifiedElement(element: KtUserType, bindingContext: BindingContext): AnalyzeQualifiedElementResult {
-            if (element.qualifier == null) return Skip
-            val referenceExpression = element.referenceExpression ?: return Skip
+            if (element.qualifier == null) return AnalyzeQualifiedElementResult.Skip
+            val referenceExpression = element.referenceExpression ?: return AnalyzeQualifiedElementResult.Skip
 
-            val target = referenceExpression.targets(bindingContext).singleOrNull() ?: return Skip
+            val target = referenceExpression.targets(bindingContext).singleOrNull() ?: return AnalyzeQualifiedElementResult.Skip
 
             val scope = element.getResolutionScope(bindingContext, resolutionFacade)
             val name = target.name
@@ -370,7 +366,7 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
                 scope.findPackage(name)
 
             val canShortenNow = targetByName?.asString() == target.asString()
-            return if (canShortenNow) ShortenNow else ImportDescriptors(target.singletonOrEmptyList())
+            return if (canShortenNow) AnalyzeQualifiedElementResult.ShortenNow else AnalyzeQualifiedElementResult.ImportDescriptors(target.singletonOrEmptyList())
         }
 
         override fun shortenElement(element: KtUserType): KtElement {
@@ -421,17 +417,17 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
 
         override fun analyzeQualifiedElement(element: KtDotQualifiedExpression, bindingContext: BindingContext): AnalyzeQualifiedElementResult {
             val receiver = element.receiverExpression
-            if (receiver !is KtThisExpression && bindingContext[BindingContext.QUALIFIER, receiver] == null) return Skip
+            if (receiver !is KtThisExpression && bindingContext[BindingContext.QUALIFIER, receiver] == null) return AnalyzeQualifiedElementResult.Skip
 
             if (PsiTreeUtil.getParentOfType(
                     element,
-                    KtImportDirective::class.java, KtPackageDirective::class.java) != null) return Skip
+                    KtImportDirective::class.java, KtPackageDirective::class.java) != null) return AnalyzeQualifiedElementResult.Skip
 
-            val selector = element.selectorExpression ?: return Skip
-            val callee = selector.getCalleeExpressionIfAny() as? KtReferenceExpression ?: return Skip
+            val selector = element.selectorExpression ?: return AnalyzeQualifiedElementResult.Skip
+            val callee = selector.getCalleeExpressionIfAny() as? KtReferenceExpression ?: return AnalyzeQualifiedElementResult.Skip
             val targets = callee.targets(bindingContext)
             val varAsFunResolvedCall = callee.getResolvedCall(bindingContext) as? VariableAsFunctionResolvedCall
-            if (targets.isEmpty()) return Skip
+            if (targets.isEmpty()) return AnalyzeQualifiedElementResult.Skip
 
             val (newContext, selectorCopy) = copyAndAnalyzeSelector(element, bindingContext)
             val newCallee = selectorCopy.getCalleeExpressionIfAny() as KtReferenceExpression
@@ -441,27 +437,27 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
                                && (varAsFunResolvedCall == null || resolvedCallsMatch(varAsFunResolvedCall, varAsFunResolvedCallWhenShort))
 
             if (receiver is KtThisExpression) {
-                if (!targetsMatch) return Skip
-                val originalCall = selector.getResolvedCall(bindingContext) ?: return Skip
-                val newCall = selectorCopy.getResolvedCall(newContext) ?: return Skip
+                if (!targetsMatch) return AnalyzeQualifiedElementResult.Skip
+                val originalCall = selector.getResolvedCall(bindingContext) ?: return AnalyzeQualifiedElementResult.Skip
+                val newCall = selectorCopy.getResolvedCall(newContext) ?: return AnalyzeQualifiedElementResult.Skip
                 val receiverKind = originalCall.explicitReceiverKind
                 val newReceiver = when (receiverKind) {
                                       ExplicitReceiverKind.BOTH_RECEIVERS, ExplicitReceiverKind.EXTENSION_RECEIVER -> newCall.extensionReceiver
                                       ExplicitReceiverKind.DISPATCH_RECEIVER -> newCall.dispatchReceiver
-                                      else -> return Skip
-                                  } as? ImplicitReceiver ?: return Skip
+                                      else -> return AnalyzeQualifiedElementResult.Skip
+                                  } as? ImplicitReceiver ?: return AnalyzeQualifiedElementResult.Skip
 
                 val thisTarget = receiver.instanceReference.targets(bindingContext).singleOrNull()
-                if (newReceiver.declarationDescriptor.asString() != thisTarget?.asString()) return Skip
+                if (newReceiver.declarationDescriptor.asString() != thisTarget?.asString()) return AnalyzeQualifiedElementResult.Skip
             }
 
             return when {
-                targetsMatch -> ShortenNow
+                targetsMatch -> AnalyzeQualifiedElementResult.ShortenNow
 
             // it makes no sense to insert import when there is a conflict with function, property etc
-                targetsWhenShort.any { it !is ClassDescriptor && it !is PackageViewDescriptor } -> Skip
+                targetsWhenShort.any { it !is ClassDescriptor && it !is PackageViewDescriptor } -> AnalyzeQualifiedElementResult.Skip
 
-                else -> ImportDescriptors(targets)
+                else -> AnalyzeQualifiedElementResult.ImportDescriptors(targets)
             }
         }
 
@@ -519,10 +515,10 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
                 }
 
         override fun analyzeQualifiedElement(element: KtThisExpression, bindingContext: BindingContext): AnalyzeQualifiedElementResult {
-            val targetBefore = element.instanceReference.targets(bindingContext).singleOrNull() ?: return Skip
+            val targetBefore = element.instanceReference.targets(bindingContext).singleOrNull() ?: return AnalyzeQualifiedElementResult.Skip
             val newContext = simpleThis.analyzeAsReplacement(element, bindingContext, resolutionFacade)
             val targetAfter = simpleThis.instanceReference.targets(newContext).singleOrNull()
-            return if (targetBefore == targetAfter) ShortenNow else Skip
+            return if (targetBefore == targetAfter) AnalyzeQualifiedElementResult.ShortenNow else AnalyzeQualifiedElementResult.Skip
         }
 
         override fun shortenElement(element: KtThisExpression): KtElement {
@@ -545,27 +541,27 @@ class ShortenReferences(val options: (KtElement) -> Options = { Options.DEFAULT
 
             if (PsiTreeUtil.getParentOfType(
                     element,
-                    KtImportDirective::class.java, KtPackageDirective::class.java) != null) return Skip
+                    KtImportDirective::class.java, KtPackageDirective::class.java) != null) return AnalyzeQualifiedElementResult.Skip
 
-            val receiverTarget = receiver.singleTarget(bindingContext) as? ClassDescriptor ?: return Skip
+            val receiverTarget = receiver.singleTarget(bindingContext) as? ClassDescriptor ?: return AnalyzeQualifiedElementResult.Skip
 
-            val selectorExpression = element.selectorExpression ?: return Skip
-            val selectorTarget = selectorExpression.singleTarget(bindingContext) ?: return Skip
+            val selectorExpression = element.selectorExpression ?: return AnalyzeQualifiedElementResult.Skip
+            val selectorTarget = selectorExpression.singleTarget(bindingContext) ?: return AnalyzeQualifiedElementResult.Skip
 
-            if (receiverTarget.companionObjectDescriptor != selectorTarget) return Skip
+            if (receiverTarget.companionObjectDescriptor != selectorTarget) return AnalyzeQualifiedElementResult.Skip
 
             val selectorsSelector = (element.parent as? KtDotQualifiedExpression)?.selectorExpression
-                                    ?: return ShortenNow
+                                    ?: return AnalyzeQualifiedElementResult.ShortenNow
 
-            val selectorsSelectorTarget = selectorsSelector.singleTarget(bindingContext) ?: return Skip
-            if (selectorsSelectorTarget is ClassDescriptor) return Skip
+            val selectorsSelectorTarget = selectorsSelector.singleTarget(bindingContext) ?: return AnalyzeQualifiedElementResult.Skip
+            if (selectorsSelectorTarget is ClassDescriptor) return AnalyzeQualifiedElementResult.Skip
             // TODO: More generic solution may be possible
             if (selectorsSelectorTarget is PropertyDescriptor) {
                 val source = selectorsSelectorTarget.source.getPsi() as? KtProperty
-                if (source != null && isEnumCompanionPropertyWithEntryConflict(source, source.name ?: "")) return Skip
+                if (source != null && isEnumCompanionPropertyWithEntryConflict(source, source.name ?: "")) return AnalyzeQualifiedElementResult.Skip
             }
 
-            return ShortenNow
+            return AnalyzeQualifiedElementResult.ShortenNow
         }
 
         override fun shortenElement(element: KtDotQualifiedExpression): KtElement {
diff --git a/idea/tests/org/jetbrains/kotlin/idea/stubs/ResolveByStubTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/stubs/ResolveByStubTestGenerated.java
index ddec537c280..0f1bc2cacca 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/stubs/ResolveByStubTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/stubs/ResolveByStubTestGenerated.java
@@ -3070,12 +3070,6 @@ public class ResolveByStubTestGenerated extends AbstractResolveByStubTest {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Generic.kt");
             doTest(fileName);
         }
-
-        @TestMetadata("Nested.kt")
-        public void testNested() throws Exception {
-            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/loadJava/compiledKotlin/typealias/Nested.kt");
-            doTest(fileName);
-        }
     }
 
     @TestMetadata("compiler/testData/loadJava/compiledKotlin/visibility")
diff --git a/jps-plugin/testData/incremental/pureKotlin/addMemberTypeAlias/a.kt.new b/jps-plugin/testData/incremental/pureKotlin/addMemberTypeAlias/a.kt.new
index 2f651d8a0c9..b1b7bcb0377 100644
--- a/jps-plugin/testData/incremental/pureKotlin/addMemberTypeAlias/a.kt.new
+++ b/jps-plugin/testData/incremental/pureKotlin/addMemberTypeAlias/a.kt.new
@@ -3,7 +3,9 @@ package a
 class Outer {
     inner class B(x: String)
 
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     typealias A1 = B
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     private typealias A2 = B
 
     fun A1(x: Any) = x
diff --git a/jps-plugin/testData/incremental/pureKotlin/removeMemberTypeAlias/a.kt b/jps-plugin/testData/incremental/pureKotlin/removeMemberTypeAlias/a.kt
index 2f651d8a0c9..6a5080369a0 100644
--- a/jps-plugin/testData/incremental/pureKotlin/removeMemberTypeAlias/a.kt
+++ b/jps-plugin/testData/incremental/pureKotlin/removeMemberTypeAlias/a.kt
@@ -3,7 +3,10 @@ package a
 class Outer {
     inner class B(x: String)
 
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     typealias A1 = B
+
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     private typealias A2 = B
 
     fun A1(x: Any) = x
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
index eeb6cf69cf4..b9ebe4283c1 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
@@ -21098,12 +21098,6 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
             doTest(fileName);
         }
 
-        @TestMetadata("localTypeAlias.kt")
-        public void testLocalTypeAlias() throws Exception {
-            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/typealias/localTypeAlias.kt");
-            doTest(fileName);
-        }
-
         @TestMetadata("simple.kt")
         public void testSimple() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/typealias/simple.kt");
diff --git a/js/js.translator/testData/box/inlineMultiModule/typealiases.kt b/js/js.translator/testData/box/inlineMultiModule/typealiases.kt
index 11e2983b7c6..6247d0035f8 100644
--- a/js/js.translator/testData/box/inlineMultiModule/typealiases.kt
+++ b/js/js.translator/testData/box/inlineMultiModule/typealiases.kt
@@ -10,6 +10,7 @@ object O {
 }
 
 class C {
+    @Suppress("TOPLEVEL_TYPEALIASES_ONLY")
     typealias B = O
 }