diff --git a/idea/src/org/jetbrains/kotlin/idea/debugger/JetPositionManager.kt b/idea/src/org/jetbrains/kotlin/idea/debugger/JetPositionManager.kt
index 8b26972d486..073b0073c55 100644
--- a/idea/src/org/jetbrains/kotlin/idea/debugger/JetPositionManager.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/debugger/JetPositionManager.kt
@@ -48,6 +48,8 @@ import org.jetbrains.kotlin.idea.codeInsight.CodeInsightUtils
 import org.jetbrains.kotlin.idea.decompiler.JetClsFile
 import org.jetbrains.kotlin.idea.findUsages.toSearchTarget
 import org.jetbrains.kotlin.idea.search.usagesSearch.DefaultSearchHelper
+import org.jetbrains.kotlin.idea.search.usagesSearch.FunctionUsagesSearchHelper
+import org.jetbrains.kotlin.idea.search.usagesSearch.UsagesSearch
 import org.jetbrains.kotlin.idea.search.usagesSearch.search
 import org.jetbrains.kotlin.idea.util.DebuggerUtils
 import org.jetbrains.kotlin.idea.util.application.runReadAction
@@ -353,7 +355,10 @@ public class JetPositionManager(private val myDebugProcess: DebugProcess) : Mult
             }
 
             if (isInLibrary) {
-                val elementAtForLibraryFile = getElementToCreateTypeMapperForLibraryFile(notPositionedElement)
+                val elementAtForLibraryFile =
+                        if (element is JetDeclaration) element
+                        else PsiTreeUtil.getParentOfType(element, javaClass<JetDeclaration>())
+
                 assert(elementAtForLibraryFile != null) {
                     "Couldn't find element at breakpoint for library file " + file.getName() +
                          (if (notPositionedElement == null) "" else ", notPositionedElement = " + notPositionedElement.getElementTextWithContext())
@@ -430,9 +435,11 @@ public class JetPositionManager(private val myDebugProcess: DebugProcess) : Mult
                 InlineUtil.isInline(typeMapper.getBindingContext().get(BindingContext.DECLARATION_TO_DESCRIPTOR, psiElement))
             ) {
                 val project = myDebugProcess.getProject()
-                val usagesSearchTarget = FindUsagesOptions(project).toSearchTarget(psiElement, true)
+                val options = FindUsagesOptions(project)
+                options.isSearchForTextOccurrences = false
+                val usagesSearchTarget = options.toSearchTarget(psiElement, true)
 
-                val usagesSearchRequest = DefaultSearchHelper<JetNamedFunction>(true).newRequest(usagesSearchTarget)
+                val usagesSearchRequest = FunctionUsagesSearchHelper(skipImports = true).newRequest(usagesSearchTarget)
                 usagesSearchRequest.search().forEach {
                     val psiElement = it.getElement()
                     if (psiElement is JetElement) {
diff --git a/idea/src/org/jetbrains/kotlin/idea/debugger/PositionManagerLibraryClassFileSearcher.kt b/idea/src/org/jetbrains/kotlin/idea/debugger/PositionManagerLibraryClassFileSearcher.kt
index ceace2ba737..ab7d0c3e7e8 100644
--- a/idea/src/org/jetbrains/kotlin/idea/debugger/PositionManagerLibraryClassFileSearcher.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/debugger/PositionManagerLibraryClassFileSearcher.kt
@@ -51,13 +51,7 @@ private val LOG = Logger.getInstance("org.jetbrains.kotlin.idea.debugger")
  * 2. find all descriptors with same signature, if there is one - return it
  * 3. else -> return null, because it means that there is more than one function with same signature in project
  */
-fun findPackagePartInternalNameForLibraryFile(elementAt: JetElement): String? {
-    val topLevelDeclaration = PsiTreeUtil.getTopmostParentOfType(elementAt, javaClass<JetDeclaration>())
-    if (topLevelDeclaration == null) {
-        reportError(elementAt, null)
-        return null
-    }
-
+fun findPackagePartInternalNameForLibraryFile(topLevelDeclaration: JetDeclaration): String? {
     val packagePartFile = findPackagePartFileNamesForElement(topLevelDeclaration).singleOrNull()
     if (packagePartFile != null) return packagePartFile
 
diff --git a/idea/src/org/jetbrains/kotlin/idea/util/DebuggerUtils.java b/idea/src/org/jetbrains/kotlin/idea/util/DebuggerUtils.java
index e88ea3ce09a..58add37c3ab 100644
--- a/idea/src/org/jetbrains/kotlin/idea/util/DebuggerUtils.java
+++ b/idea/src/org/jetbrains/kotlin/idea/util/DebuggerUtils.java
@@ -99,7 +99,7 @@ public class DebuggerUtils {
                 public Boolean invoke(JetFile file) {
                     Integer startLineOffset = CodeInsightUtils.getStartLineOffset(file, lineNumber);
                     assert startLineOffset != null : "Cannot find start line offset for file " + file.getName() + ", line " + lineNumber;
-                    JetElement elementAt = PsiTreeUtil.getParentOfType(file.findElementAt(startLineOffset), JetElement.class);
+                    JetDeclaration elementAt = PsiTreeUtil.getParentOfType(file.findElementAt(startLineOffset), JetDeclaration.class);
                     return elementAt != null &&
                            className.getInternalName().equals(DebuggerPackage.findPackagePartInternalNameForLibraryFile(elementAt));
                 }
diff --git a/idea/testData/debugger/customLibraryForTinyApp/inlineFunInLibrary/inlineFunInLibrary.kt b/idea/testData/debugger/customLibraryForTinyApp/inlineFunInLibrary/inlineFunInLibrary.kt
new file mode 100644
index 00000000000..f5ef1ab10e7
--- /dev/null
+++ b/idea/testData/debugger/customLibraryForTinyApp/inlineFunInLibrary/inlineFunInLibrary.kt
@@ -0,0 +1,5 @@
+package customLib.inlineFunInLibrary
+
+public inline fun inlineFun(f: () -> Unit) {
+    1 + 1
+}
diff --git a/idea/testData/debugger/tinyApp/outs/breakpointInInlineFun.out b/idea/testData/debugger/tinyApp/outs/breakpointInInlineFun.out
new file mode 100644
index 00000000000..dcf05d1088e
--- /dev/null
+++ b/idea/testData/debugger/tinyApp/outs/breakpointInInlineFun.out
@@ -0,0 +1,7 @@
+LineBreakpoint created at inlineFunInLibrary.kt:3
+!JDK_HOME!\bin\java -agentlib:jdwp=transport=dt_socket,address=!HOST_NAME!:!HOST_PORT!,suspend=y,server=n -Dfile.encoding=!FILE_ENCODING! -classpath !APP_PATH!\classes;!KOTLIN_RUNTIME!;!CUSTOM_LIBRARY!;!RT_JAR! breakpointInInlineFun.BreakpointInInlineFunPackage
+Connected to the target VM, address: '!HOST_NAME!:PORT_NAME!', transport: 'socket'
+inlineFunInLibrary.kt:4
+Disconnected from the target VM, address: '!HOST_NAME!:PORT_NAME!', transport: 'socket'
+
+Process finished with exit code 0
diff --git a/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/breakpointInInlineFun.kt b/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/breakpointInInlineFun.kt
new file mode 100644
index 00000000000..027b287037e
--- /dev/null
+++ b/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/breakpointInInlineFun.kt
@@ -0,0 +1,9 @@
+package breakpointInInlineFun
+
+import customLib.inlineFunInLibrary.*
+
+fun main(args: Array<String>) {
+    inlineFun { }
+}
+
+// ADDITIONAL_BREAKPOINT: inlineFunInLibrary.kt:public inline fun inlineFun
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java
index 2bc965afdc2..e23dc6ce265 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java
@@ -61,6 +61,12 @@ public class KotlinEvaluateExpressionTestGenerated extends AbstractKotlinEvaluat
             doSingleBreakpointTest(fileName);
         }
 
+        @TestMetadata("breakpointInInlineFun.kt")
+        public void testBreakpointInInlineFun() throws Exception {
+            String fileName = JetTestUtils.navigationMetadata("idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/breakpointInInlineFun.kt");
+            doSingleBreakpointTest(fileName);
+        }
+
         @TestMetadata("callableBug.kt")
         public void testCallableBug() throws Exception {
             String fileName = JetTestUtils.navigationMetadata("idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/callableBug.kt");