diff --git a/compiler/testData/diagnostics/tests/functionLiterals/return/AutoLabelsNonLocal.kt b/compiler/testData/diagnostics/tests/functionLiterals/return/AutoLabelsNonLocal.kt
new file mode 100644
index 00000000000..a13a41fe6f5
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/functionLiterals/return/AutoLabelsNonLocal.kt
@@ -0,0 +1,14 @@
+fun f() {
+    foo {(): Int ->
+        bar {
+            (): Int ->
+            // The actual error message should be "return not allowed",
+            // but due to a bug in label resolution it is "unresolved reference"
+            return<!UNRESOLVED_REFERENCE!>@foo<!> 1
+        }
+        return@foo 1
+    }
+}
+
+fun foo(<!UNUSED_PARAMETER!>a<!>: Any) {}
+fun bar(<!UNUSED_PARAMETER!>a<!>: Any) {}
\ No newline at end of file
diff --git a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
index 4afcba8d7b8..848f8cc9661 100644
--- a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
@@ -2437,6 +2437,11 @@ public class JetDiagnosticsTestGenerated extends AbstractDiagnosticsTestWithEage
                     doTest("compiler/testData/diagnostics/tests/functionLiterals/return/AutoLabels.kt");
                 }
                 
+                @TestMetadata("AutoLabelsNonLocal.kt")
+                public void testAutoLabelsNonLocal() throws Exception {
+                    doTest("compiler/testData/diagnostics/tests/functionLiterals/return/AutoLabelsNonLocal.kt");
+                }
+                
                 @TestMetadata("ForbiddenNonLocalReturnNoType.kt")
                 public void testForbiddenNonLocalReturnNoType() throws Exception {
                     doTest("compiler/testData/diagnostics/tests/functionLiterals/return/ForbiddenNonLocalReturnNoType.kt");