diff --git a/idea/src/org/jetbrains/jet/plugin/refactoring/extractFunction/extractableAnalysisUtil.kt b/idea/src/org/jetbrains/jet/plugin/refactoring/extractFunction/extractableAnalysisUtil.kt
index 02acc488bf8..58ceff42c40 100644
--- a/idea/src/org/jetbrains/jet/plugin/refactoring/extractFunction/extractableAnalysisUtil.kt
+++ b/idea/src/org/jetbrains/jet/plugin/refactoring/extractFunction/extractableAnalysisUtil.kt
@@ -69,6 +69,8 @@ import org.jetbrains.jet.plugin.caches.resolve.findModuleDescriptor
 import org.jetbrains.jet.plugin.caches.resolve.analyze
 import org.jetbrains.kotlin.psi.psiUtil.getStrictParentOfType
 import org.jetbrains.jet.plugin.refactoring.comparePossiblyOverridingDescriptors
+import org.jetbrains.kotlin.plugin.util.makeNullable
+import org.jetbrains.kotlin.plugin.util.makeNotNullable
 
 private val DEFAULT_FUNCTION_NAME = "myFun"
 private val DEFAULT_RETURN_TYPE = KotlinBuiltIns.getInstance().getUnitType()
@@ -473,8 +475,26 @@ private class MutableParameter(
 
     override val parameterTypeCandidates: List<JetType> by Delegates.lazy {
         writable = false
-        val superTypes = TypeUtils.getAllSupertypes(defaultType).filter(and(typePredicates))
-        (Collections.singletonList(defaultType) + superTypes).filter { it.isExtractable() }
+
+        val typePredicate = and(typePredicates)
+
+        val typeList = if (defaultType.isNullabilityFlexible()) {
+            val bounds = defaultType.getCapability(javaClass<Flexibility>())
+            if (typePredicate(bounds.upperBound)) arrayListOf(bounds.upperBound, bounds.lowerBound) else arrayListOf(bounds.lowerBound)
+        }
+        else arrayListOf(defaultType)
+
+        val addNullableTypes = typeList.size() > 1
+        val superTypes = TypeUtils.getAllSupertypes(defaultType).filter(typePredicate)
+
+        for (superType in superTypes) {
+            if (addNullableTypes) {
+                typeList.add(superType.makeNullable())
+            }
+            typeList.add(superType)
+        }
+
+        typeList.filter { it.isExtractable() }
     }
 
     override val parameterType: JetType by Delegates.lazy { parameterTypeCandidates.firstOrNull() ?: defaultType }
diff --git a/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt
new file mode 100644
index 00000000000..1e522fabc5d
--- /dev/null
+++ b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt
@@ -0,0 +1,7 @@
+// WITH_RUNTIME
+// PARAM_TYPES: String?, String, kotlin.CharSequence?, CharSequence
+// PARAM_DESCRIPTOR: val property: (String..String?) defined in test
+fun test() {
+    val property = System.getProperty("some")
+    val n = <selection>property?.length()</selection>
+}
\ No newline at end of file
diff --git a/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt.after b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt.after
new file mode 100644
index 00000000000..c937a1cf21d
--- /dev/null
+++ b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt.after
@@ -0,0 +1,11 @@
+// WITH_RUNTIME
+// PARAM_TYPES: String?, String, kotlin.CharSequence?, CharSequence
+// PARAM_DESCRIPTOR: val property: (String..String?) defined in test
+fun test() {
+    val property = System.getProperty("some")
+    val n = i(property)
+}
+
+private fun i(property: String?): Int? {
+    return property?.length()
+}
\ No newline at end of file
diff --git a/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt
new file mode 100644
index 00000000000..e95f1420d5e
--- /dev/null
+++ b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt
@@ -0,0 +1,7 @@
+// WITH_RUNTIME
+// PARAM_TYPES: String, CharSequence
+// PARAM_DESCRIPTOR: val property: (String..String?) defined in test
+fun test() {
+    val property = System.getProperty("some")
+    val n = <selection>property.length()</selection>
+}
\ No newline at end of file
diff --git a/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt.after b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt.after
new file mode 100644
index 00000000000..e5d8c2e4f9f
--- /dev/null
+++ b/idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt.after
@@ -0,0 +1,11 @@
+// WITH_RUNTIME
+// PARAM_TYPES: String, CharSequence
+// PARAM_DESCRIPTOR: val property: (String..String?) defined in test
+fun test() {
+    val property = System.getProperty("some")
+    val n = i(property)
+}
+
+private fun i(property: String): Int {
+    return property.length()
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/jet/plugin/refactoring/introduce/introduceVariable/JetExtractionTestGenerated.java b/idea/tests/org/jetbrains/jet/plugin/refactoring/introduce/introduceVariable/JetExtractionTestGenerated.java
index eb1ef45f46f..328564143d1 100644
--- a/idea/tests/org/jetbrains/jet/plugin/refactoring/introduce/introduceVariable/JetExtractionTestGenerated.java
+++ b/idea/tests/org/jetbrains/jet/plugin/refactoring/introduce/introduceVariable/JetExtractionTestGenerated.java
@@ -1421,6 +1421,18 @@ public class JetExtractionTestGenerated extends AbstractJetExtractionTest {
                     doExtractFunctionTest(fileName);
                 }
 
+                @TestMetadata("flexibleTypesWithNull.kt")
+                public void testFlexibleTypesWithNull() throws Exception {
+                    String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithNull.kt");
+                    doExtractFunctionTest(fileName);
+                }
+
+                @TestMetadata("flexibleTypesWithoutNull.kt")
+                public void testFlexibleTypesWithoutNull() throws Exception {
+                    String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/extractFunction/parameters/candidateTypes/flexibleTypesWithoutNull.kt");
+                    doExtractFunctionTest(fileName);
+                }
+
                 @TestMetadata("liftAnonymousToSupertype1.kt")
                 public void testLiftAnonymousToSupertype1() throws Exception {
                     String fileName = JetTestUtils.navigationMetadata("idea/testData/refactoring/extractFunction/parameters/candidateTypes/liftAnonymousToSupertype1.kt");