diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineTransformerMethodVisitor.kt b/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineTransformerMethodVisitor.kt
index 0eb01394e52..c8364e88a5b 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineTransformerMethodVisitor.kt
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineTransformerMethodVisitor.kt
@@ -692,6 +692,14 @@ private fun allSuspensionPointsAreTailCalls(
         val beginIndex = instructions.indexOf(suspensionPoint.suspensionCallBegin)
         val endIndex = instructions.indexOf(suspensionPoint.suspensionCallEnd)
 
+        val insideTryBlock = methodNode.tryCatchBlocks.any { block ->
+            val tryBlockStartIndex = instructions.indexOf(block.start)
+            val tryBlockEndIndex = instructions.indexOf(block.end)
+
+            beginIndex in tryBlockStartIndex..tryBlockEndIndex
+        }
+        if (insideTryBlock) return@all false
+
         safelyReachableReturns[endIndex + 1]?.all { returnIndex ->
             val sourceInsn =
                     sourceFrames[returnIndex].top().sure {
diff --git a/compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt b/compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt
new file mode 100644
index 00000000000..8207febcf58
--- /dev/null
+++ b/compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt
@@ -0,0 +1,37 @@
+// WITH_RUNTIME
+// WITH_COROUTINES
+import helpers.*
+import kotlin.coroutines.experimental.*
+import kotlin.coroutines.experimental.intrinsics.*
+
+val postponedActions = ArrayList<() -> Unit>()
+
+suspend fun suspendWithException(): String = suspendCoroutine { x ->
+    postponedActions.add {
+        x.resumeWithException(Exception("OK"))
+    }
+}
+
+suspend fun catchException(): String {
+    try {
+        return suspendWithException()
+    }
+    catch(e: Exception) {
+        return e.message!!
+    }
+}
+
+fun run(c: suspend () -> String): String {
+    var res: String = "FAIL 0"
+    c.startCoroutine(handleResultContinuation {
+        res = it
+    })
+    postponedActions[0]()
+    return res
+}
+
+fun box(): String {
+    return run {
+        catchException()
+    }
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/bytecodeListing/tryCatchTailCall.kt b/compiler/testData/codegen/bytecodeListing/tryCatchTailCall.kt
new file mode 100644
index 00000000000..d4e43c52164
--- /dev/null
+++ b/compiler/testData/codegen/bytecodeListing/tryCatchTailCall.kt
@@ -0,0 +1,10 @@
+suspend fun catchException(): String {
+    try {
+        return suspendWithException()
+    }
+    catch(e: Exception) {
+        return e.message!!
+    }
+}
+
+suspend fun suspendWithException(): String = TODO()
diff --git a/compiler/testData/codegen/bytecodeListing/tryCatchTailCall.txt b/compiler/testData/codegen/bytecodeListing/tryCatchTailCall.txt
new file mode 100644
index 00000000000..1460a54f81f
--- /dev/null
+++ b/compiler/testData/codegen/bytecodeListing/tryCatchTailCall.txt
@@ -0,0 +1,17 @@
+@kotlin.Metadata
+final class TryCatchTailCallKt$catchException$1 {
+    synthetic field data: java.lang.Object
+    synthetic field exception: java.lang.Throwable
+    inner class TryCatchTailCallKt$catchException$1
+    method <init>(p0: kotlin.coroutines.experimental.Continuation): void
+    public final @org.jetbrains.annotations.Nullable method doResume(@org.jetbrains.annotations.Nullable p0: java.lang.Object, @org.jetbrains.annotations.Nullable p1: java.lang.Throwable): java.lang.Object
+    synthetic final method getLabel(): int
+    synthetic final method setLabel(p0: int): void
+}
+
+@kotlin.Metadata
+public final class TryCatchTailCallKt {
+    inner class TryCatchTailCallKt$catchException$1
+    public final static @org.jetbrains.annotations.Nullable method catchException(@org.jetbrains.annotations.Nullable p0: java.lang.Object): java.lang.Object
+    public final static @org.jetbrains.annotations.Nullable method suspendWithException(@org.jetbrains.annotations.Nullable p0: java.lang.Object): java.lang.Object
+}
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 343e19c2f37..b3c0e0234d4 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
@@ -6388,6 +6388,12 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/simple.kt");
                 doTest(fileName);
             }
+
+            @TestMetadata("tryCatch.kt")
+            public void testTryCatch() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt");
+                doTest(fileName);
+            }
         }
 
         @TestMetadata("compiler/testData/codegen/box/coroutines/tailOperations")
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index 22e422f9ab0..9df6d6323b6 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -6388,6 +6388,12 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/simple.kt");
                 doTest(fileName);
             }
+
+            @TestMetadata("tryCatch.kt")
+            public void testTryCatch() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt");
+                doTest(fileName);
+            }
         }
 
         @TestMetadata("compiler/testData/codegen/box/coroutines/tailOperations")
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeListingTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeListingTestGenerated.java
index f4f7af9a177..f3d8c381f3c 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeListingTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeListingTestGenerated.java
@@ -157,6 +157,12 @@ public class BytecodeListingTestGenerated extends AbstractBytecodeListingTest {
         doTest(fileName);
     }
 
+    @TestMetadata("tryCatchTailCall.kt")
+    public void testTryCatchTailCall() throws Exception {
+        String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/bytecodeListing/tryCatchTailCall.kt");
+        doTest(fileName);
+    }
+
     @TestMetadata("compiler/testData/codegen/bytecodeListing/annotations")
     @TestDataPath("$PROJECT_ROOT")
     @RunWith(JUnit3RunnerWithInners.class)
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
index cffee5439e8..2089d6a04a4 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
@@ -6388,6 +6388,12 @@ public class LightAnalysisModeTestGenerated extends AbstractLightAnalysisModeTes
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/simple.kt");
                 doTest(fileName);
             }
+
+            @TestMetadata("tryCatch.kt")
+            public void testTryCatch() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt");
+                doTest(fileName);
+            }
         }
 
         @TestMetadata("compiler/testData/codegen/box/coroutines/tailOperations")
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 195b5cfbf1a..7c8748f5d2c 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
@@ -6946,6 +6946,12 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/simple.kt");
                 doTest(fileName);
             }
+
+            @TestMetadata("tryCatch.kt")
+            public void testTryCatch() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/tailCallOptimizations/tryCatch.kt");
+                doTest(fileName);
+            }
         }
 
         @TestMetadata("compiler/testData/codegen/box/coroutines/tailOperations")