diff --git a/compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt b/compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt
new file mode 100644
index 00000000000..e2fbbfd75b1
--- /dev/null
+++ b/compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt
@@ -0,0 +1,93 @@
+// WITH_RUNTIME
+// IGNORE_BACKEND: JS
+import kotlin.coroutines.experimental.*
+import kotlin.coroutines.experimental.intrinsics.SUSPENDED_MARKER
+
+fun runCustomLambdaAsCoroutine(e: Throwable? = null, x: (Continuation<String>) -> Any?): String {
+    var result = "fail"
+    var wasIntercepted = false
+    val c = (x as suspend () -> String).createCoroutine(object: Continuation<String> {
+        override fun resumeWithException(exception: Throwable) {
+            throw exception
+        }
+
+        override val context: CoroutineContext
+            get() = object: ContinuationInterceptor {
+                override fun <R> fold(initial: R, operation: (R, CoroutineContext.Element) -> R): R {
+                    throw IllegalStateException()
+                }
+
+                override fun <E : CoroutineContext.Element> get(key: CoroutineContext.Key<E>): E? {
+                    if (key == ContinuationInterceptor.Key) {
+                        return this as E
+                    }
+                    return null
+                }
+
+                override fun <T> interceptContinuation(continuation: Continuation<T>) = object : Continuation<T> {
+                    override val context: CoroutineContext
+                        get() = continuation.context
+
+                    override fun resume(value: T) {
+                        wasIntercepted = true
+                        continuation.resume(value)
+                    }
+
+                    override fun resumeWithException(exception: Throwable) {
+                        wasIntercepted = true
+                        continuation.resumeWithException(exception)
+                    }
+                }
+
+                override fun minusKey(key: CoroutineContext.Key<*>): CoroutineContext {
+                    throw IllegalStateException()
+                }
+
+                override fun plus(context: CoroutineContext): CoroutineContext {
+                    throw IllegalStateException()
+                }
+
+                override val key: CoroutineContext.Key<*>
+                    get() = ContinuationInterceptor.Key
+            }
+
+        override fun resume(value: String) {
+            result = value
+        }
+    })
+
+    if (e != null)
+        c.resumeWithException(e)
+    else
+        c.resume(Unit)
+
+    if (!wasIntercepted) return "was not intercepted"
+
+    return result
+}
+
+fun box(): String {
+    val x = runCustomLambdaAsCoroutine {
+        it.resume("OK")
+        SUSPENDED_MARKER
+    }
+
+    if (x != "OK") return "fail 1: $x"
+
+    val y = runCustomLambdaAsCoroutine {
+        "OK"
+    }
+
+    if (y != "OK") return "fail 2: $x"
+
+
+    try {
+        runCustomLambdaAsCoroutine(RuntimeException("OK")) {
+            throw RuntimeException("fail 3")
+        }
+    } catch(e: Exception) {
+        return e.message!!
+    }
+
+    return "fail 3"
+}
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 281e208000e..06cb0b741e2 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
@@ -4655,6 +4655,12 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
             doTest(fileName);
         }
 
+        @TestMetadata("createCoroutinesOnManualInstances.kt")
+        public void testCreateCoroutinesOnManualInstances() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("defaultParametersInSuspend.kt")
         public void testDefaultParametersInSuspend() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/defaultParametersInSuspend.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index 66b03c73482..e014b68eeab 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -4655,6 +4655,12 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest(fileName);
         }
 
+        @TestMetadata("createCoroutinesOnManualInstances.kt")
+        public void testCreateCoroutinesOnManualInstances() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("defaultParametersInSuspend.kt")
         public void testDefaultParametersInSuspend() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/defaultParametersInSuspend.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeCodegenTestGenerated.java
index 1c56ad44078..adc77e70688 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeCodegenTestGenerated.java
@@ -4655,6 +4655,12 @@ public class LightAnalysisModeCodegenTestGenerated extends AbstractLightAnalysis
             doTest(fileName);
         }
 
+        @TestMetadata("createCoroutinesOnManualInstances.kt")
+        public void testCreateCoroutinesOnManualInstances() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("defaultParametersInSuspend.kt")
         public void testDefaultParametersInSuspend() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/defaultParametersInSuspend.kt");
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 1cf59d826d6..eea89f8ae3a 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
@@ -5346,6 +5346,18 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
             doTest(fileName);
         }
 
+        @TestMetadata("createCoroutinesOnManualInstances.kt")
+        public void testCreateCoroutinesOnManualInstances() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/createCoroutinesOnManualInstances.kt");
+            try {
+                doTest(fileName);
+            }
+            catch (Throwable ignore) {
+                return;
+            }
+            throw new AssertionError("Looks like this test can be unmuted. Remove IGNORE_BACKEND directive for that.");
+        }
+
         @TestMetadata("defaultParametersInSuspend.kt")
         public void testDefaultParametersInSuspend() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/defaultParametersInSuspend.kt");
diff --git a/libraries/stdlib/src/kotlin/coroutines/experimental/CoroutinesLibrary.kt b/libraries/stdlib/src/kotlin/coroutines/experimental/CoroutinesLibrary.kt
index 81205bc0a5e..74110aee82e 100644
--- a/libraries/stdlib/src/kotlin/coroutines/experimental/CoroutinesLibrary.kt
+++ b/libraries/stdlib/src/kotlin/coroutines/experimental/CoroutinesLibrary.kt
@@ -23,6 +23,7 @@ import java.util.concurrent.atomic.AtomicReferenceFieldUpdater
 import kotlin.coroutines.experimental.intrinsics.SUSPENDED_MARKER
 import kotlin.coroutines.experimental.intrinsics.suspendCoroutineOrReturn
 import kotlin.coroutines.experimental.jvm.internal.CoroutineImpl
+import kotlin.coroutines.experimental.jvm.internal.interceptContinuationIfNeeded
 
 /**
  * Creates coroutine with receiver type [R] and result type [T].
@@ -35,8 +36,14 @@ import kotlin.coroutines.experimental.jvm.internal.CoroutineImpl
 public fun <R, T> (suspend R.() -> T).createCoroutine(
         receiver: R,
         completion: Continuation<T>
-): Continuation<Unit> =
-        ((this as CoroutineImpl).create(receiver, completion) as CoroutineImpl).facade
+): Continuation<Unit> {
+    if (this !is CoroutineImpl) {
+        return buildContinuationByInvokeCall(completion) {
+            (this as Function2<R, Continuation<T>, Any?>).invoke(receiver, completion)
+        }
+    }
+    return ((this as CoroutineImpl).create(receiver, completion) as CoroutineImpl).facade
+}
 
 /**
  * Starts coroutine with receiver type [R] and result type [T].
@@ -62,7 +69,14 @@ public fun <R, T> (suspend R.() -> T).startCoroutine(
 @Suppress("UNCHECKED_CAST")
 public fun <T> (suspend () -> T).createCoroutine(
         completion: Continuation<T>
-): Continuation<Unit> = ((this as CoroutineImpl).create(completion) as CoroutineImpl).facade
+): Continuation<Unit> {
+    if (this !is CoroutineImpl) {
+        return buildContinuationByInvokeCall(completion) {
+            (this as Function1<Continuation<T>, Any?>).invoke(completion)
+        }
+    }
+    return ((this as CoroutineImpl).create(completion) as CoroutineImpl).facade
+}
 
 /**
  * Starts coroutine without receiver and with result type [T].
@@ -95,6 +109,39 @@ public inline suspend fun <T> suspendCoroutine(crossinline block: (Continuation<
 
 // INTERNAL DECLARATIONS
 
+private inline fun <T> buildContinuationByInvokeCall(
+        completion: Continuation<T>,
+        crossinline block: () -> Any?
+): Continuation<Unit> {
+    val continuation =
+            object : Continuation<Unit> {
+                override val context: CoroutineContext
+                    get() = completion.context
+
+                override fun resume(value: Unit) {
+                    processInvokeCallOnCoroutine(completion, block)
+                }
+
+                override fun resumeWithException(exception: Throwable) {
+                    completion.resumeWithException(exception)
+                }
+            }
+
+    return completion.context.interceptContinuationIfNeeded(continuation)
+}
+
+private inline fun processInvokeCallOnCoroutine(completion: Continuation<*>, block: () -> Any?) {
+    try {
+        val result = block()
+        if (result !== SUSPENDED_MARKER) {
+            @Suppress("UNCHECKED_CAST")
+            (completion as Continuation<Any?>).resume(result)
+        }
+    } catch (t: Throwable) {
+        completion.resumeWithException(t)
+    }
+}
+
 private val UNDECIDED: Any? = Any()
 private val RESUMED: Any? = Any()
 private class Fail(val exception: Throwable)
diff --git a/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineImpl.kt b/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineImpl.kt
index ec31eea1f74..3876121d9cf 100644
--- a/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineImpl.kt
+++ b/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineImpl.kt
@@ -22,6 +22,7 @@ import kotlin.coroutines.experimental.Continuation
 import kotlin.coroutines.experimental.ContinuationInterceptor
 import kotlin.coroutines.experimental.CoroutineContext
 import kotlin.coroutines.experimental.intrinsics.SUSPENDED_MARKER
+import kotlin.coroutines.experimental.jvm.internal.interceptContinuationIfNeeded
 import kotlin.jvm.internal.Lambda
 
 abstract class CoroutineImpl(
@@ -43,7 +44,7 @@ abstract class CoroutineImpl(
     private var _facade: Continuation<Any?>? = null
 
     val facade: Continuation<Any?> get() {
-        if (_facade == null) _facade = _context!![ContinuationInterceptor]?.interceptContinuation(this) ?: this
+        if (_facade == null) _facade = _context!!.interceptContinuationIfNeeded(this)
         return _facade!!
     }
 
diff --git a/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineIntrinsics.kt b/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineIntrinsics.kt
index 9d63dd1eb24..74c4b8de03c 100644
--- a/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineIntrinsics.kt
+++ b/libraries/stdlib/src/kotlin/coroutines/experimental/jvm/internal/CoroutineIntrinsics.kt
@@ -19,7 +19,13 @@
 package kotlin.coroutines.experimental.jvm.internal
 
 import kotlin.coroutines.experimental.Continuation
+import kotlin.coroutines.experimental.CoroutineContext
+import kotlin.coroutines.experimental.ContinuationInterceptor
 import kotlin.coroutines.experimental.jvm.internal.CoroutineImpl
 
 fun <T> normalizeContinuation(continuation: Continuation<T>): Continuation<T> =
         (continuation as? CoroutineImpl)?.facade ?: continuation
+
+internal fun <T> CoroutineContext.interceptContinuationIfNeeded(
+        continuation: Continuation<T>
+) = this[ContinuationInterceptor]?.interceptContinuation(continuation) ?: continuation