diff --git a/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java b/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java
index 3365b6041ba..19919fc3b43 100644
--- a/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java
+++ b/idea/src/org/jetbrains/jet/plugin/formatter/JetBlock.java
@@ -32,8 +32,7 @@ import org.jetbrains.jet.plugin.JetLanguage;
 
 import java.util.*;
 
-import static org.jetbrains.jet.JetNodeTypes.BLOCK;
-import static org.jetbrains.jet.JetNodeTypes.FUNCTION_LITERAL;
+import static org.jetbrains.jet.JetNodeTypes.*;
 import static org.jetbrains.jet.lexer.JetTokens.*;
 
 /**
@@ -166,6 +165,14 @@ public class JetBlock extends AbstractBlock {
         }
 
         if (parentType == FUNCTION_LITERAL && child1Type == LBRACE) {
+            if (child2Type == VALUE_PARAMETER_LIST) {
+                ASTNode firstParamListNode = ((ASTBlock) child2).getNode().getFirstChildNode();
+                if (firstParamListNode != null && firstParamListNode.getElementType() == LPAR) {
+                    // Don't put space for situation {<here>(a: Int) -> a }
+                    return Spacing.createSpacing(0, 0, 0, mySettings.KEEP_LINE_BREAKS, mySettings.KEEP_BLANK_LINES_IN_CODE);
+                }
+            }
+
             return Spacing.createSpacing(spacesInSimpleMethod, spacesInSimpleMethod, 0,
                                          mySettings.KEEP_LINE_BREAKS, mySettings.KEEP_BLANK_LINES_IN_CODE);
         }
diff --git a/idea/testData/formatter/SingleLineFunctionLiteral.kt b/idea/testData/formatter/SingleLineFunctionLiteral.kt
index 07a52f68fa3..ae2b67ff4a7 100644
--- a/idea/testData/formatter/SingleLineFunctionLiteral.kt
+++ b/idea/testData/formatter/SingleLineFunctionLiteral.kt
@@ -2,5 +2,7 @@ fun test(some: (Int) -> Int) {
 }
 
 fun foo() = test() { it }
+val function = test { (a: Int) -> a }
+val function1 = test {a : Int -> a}
 
 // SET_TRUE: INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD
\ No newline at end of file
diff --git a/idea/testData/formatter/SingleLineFunctionLiteral_after.kt b/idea/testData/formatter/SingleLineFunctionLiteral_after.kt
index 07a52f68fa3..6924202c419 100644
--- a/idea/testData/formatter/SingleLineFunctionLiteral_after.kt
+++ b/idea/testData/formatter/SingleLineFunctionLiteral_after.kt
@@ -2,5 +2,7 @@ fun test(some: (Int) -> Int) {
 }
 
 fun foo() = test() { it }
+val function = test {(a: Int) -> a }
+val function1 = test { a : Int -> a }
 
 // SET_TRUE: INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD
\ No newline at end of file
diff --git a/idea/testData/formatter/SingleLineFunctionLiteral_after_inv.kt b/idea/testData/formatter/SingleLineFunctionLiteral_after_inv.kt
index 55751353d14..ee26dd90c10 100644
--- a/idea/testData/formatter/SingleLineFunctionLiteral_after_inv.kt
+++ b/idea/testData/formatter/SingleLineFunctionLiteral_after_inv.kt
@@ -2,5 +2,7 @@ fun test(some: (Int) -> Int) {
 }
 
 fun foo() = test() {it}
+val function = test {(a: Int) -> a}
+val function1 = test {a : Int -> a}
 
 // SET_TRUE: INSERT_WHITESPACES_IN_SIMPLE_ONE_LINE_METHOD
\ No newline at end of file