diff --git a/idea/idea-analysis/src/org/jetbrains/kotlin/idea/caches/resolve/IDELightClassGenerationSupport.kt b/idea/idea-analysis/src/org/jetbrains/kotlin/idea/caches/resolve/IDELightClassGenerationSupport.kt
index 19176a70ba5..3c5760cef10 100644
--- a/idea/idea-analysis/src/org/jetbrains/kotlin/idea/caches/resolve/IDELightClassGenerationSupport.kt
+++ b/idea/idea-analysis/src/org/jetbrains/kotlin/idea/caches/resolve/IDELightClassGenerationSupport.kt
@@ -18,7 +18,6 @@ package org.jetbrains.kotlin.idea.caches.resolve
 
 import com.intellij.openapi.diagnostic.Logger
 import com.intellij.openapi.project.Project
-import com.intellij.openapi.roots.libraries.LibraryUtil
 import com.intellij.openapi.vfs.VirtualFile
 import com.intellij.psi.ClassFileViewProvider
 import com.intellij.psi.PsiClass
@@ -140,13 +139,21 @@ public class IDELightClassGenerationSupport(private val project: Project) : Ligh
 
     override fun getPsiClass(classOrObject: KtClassOrObject): PsiClass? {
         val virtualFile = classOrObject.containingFile.virtualFile
-        if (virtualFile != null && LibraryUtil.findLibraryEntry(virtualFile, classOrObject.project) != null) {
-            if (ProjectRootsUtil.isLibraryClassFile(project, virtualFile)) {
-                return getLightClassForDecompiledClassOrObject(classOrObject)
+        if (virtualFile != null) {
+            when {
+                ProjectRootsUtil.isProjectSourceFile(project, virtualFile) ->
+                    return KtLightClassForExplicitDeclaration.create(classOrObject)
+                ProjectRootsUtil.isLibraryClassFile(project, virtualFile) ->
+                    return getLightClassForDecompiledClassOrObject(classOrObject)
+                ProjectRootsUtil.isLibrarySourceFile(project, virtualFile) ->
+                    return SourceNavigationHelper.getOriginalClass(classOrObject)
             }
-            return SourceNavigationHelper.getOriginalClass(classOrObject)
         }
-        return KtLightClassForExplicitDeclaration.create(classOrObject)
+        if (classOrObject.getContainingKtFile().analysisContext != null) {
+            // explicit request to create light class from dummy.kt
+            return KtLightClassForExplicitDeclaration.create(classOrObject)
+        }
+        return null
     }
 
     private fun withFakeLightClasses(
diff --git a/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/KotlinChangeSignature.kt b/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/KotlinChangeSignature.kt
index 3fc319b2958..f22fd862cdb 100644
--- a/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/KotlinChangeSignature.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/refactoring/changeSignature/KotlinChangeSignature.kt
@@ -148,6 +148,7 @@ public class KotlinChangeSignature(project: Project,
             toString()
         }
         val dummyFile = LightVirtualFile("dummy.kt", KotlinFileType.INSTANCE, dummyFileText).toPsiFile(project) as KtFile
+        dummyFile.analysisContext = originalMethod
         val dummyDeclaration = (dummyFile.declarations.first() as KtClass).getBody()!!.declarations.first()
 
         // Convert to PsiMethod which can be used in Change Signature dialog