diff --git a/idea/src/org/jetbrains/jet/plugin/codeInsight/OverrideImplementMethodsHandler.java b/idea/src/org/jetbrains/jet/plugin/codeInsight/OverrideImplementMethodsHandler.java
index 58f11204410..3ef448d69ce 100644
--- a/idea/src/org/jetbrains/jet/plugin/codeInsight/OverrideImplementMethodsHandler.java
+++ b/idea/src/org/jetbrains/jet/plugin/codeInsight/OverrideImplementMethodsHandler.java
@@ -162,7 +162,7 @@ public abstract class OverrideImplementMethodsHandler implements LanguageCodeIns
         final JetStandardLibrary stdlib = JetStandardLibrary.getInstance();
 
         if (returnType != null && !stdlib.getTuple0Type().equals(returnType)) {
-            bodyBuilder.append(" : ").append(returnType.toString());
+            bodyBuilder.append(" : ").append(DescriptorRenderer.COMPACT.renderTypeWithShortNames(returnType));
             ImportInsertHelper.addImportDirectiveIfNeeded(returnType, file);
         }
 
diff --git a/idea/testData/codeInsight/overrideImplement/functionMethod.kt b/idea/testData/codeInsight/overrideImplement/functionMethod.kt
new file mode 100644
index 00000000000..34ac85eab84
--- /dev/null
+++ b/idea/testData/codeInsight/overrideImplement/functionMethod.kt
@@ -0,0 +1,8 @@
+// From KT-1254
+trait T {
+    fun Foo() : (String) -> Unit
+}
+
+class C : T {
+  <caret>
+}
\ No newline at end of file
diff --git a/idea/testData/codeInsight/overrideImplement/functionMethod.kt.after b/idea/testData/codeInsight/overrideImplement/functionMethod.kt.after
new file mode 100644
index 00000000000..8326c925641
--- /dev/null
+++ b/idea/testData/codeInsight/overrideImplement/functionMethod.kt.after
@@ -0,0 +1,11 @@
+// From KT-1254
+trait T {
+    fun Foo() : (String) -> Unit
+}
+
+class C : T {
+
+    override fun Foo() : (String) -> Unit {
+        throw UnsupportedOperationException()
+    }
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/jet/plugin/codeInsight/OverrideImplementTest.java b/idea/tests/org/jetbrains/jet/plugin/codeInsight/OverrideImplementTest.java
index 83a8cb9a83d..b25cbc8641f 100644
--- a/idea/tests/org/jetbrains/jet/plugin/codeInsight/OverrideImplementTest.java
+++ b/idea/tests/org/jetbrains/jet/plugin/codeInsight/OverrideImplementTest.java
@@ -49,6 +49,10 @@ public class OverrideImplementTest extends LightCodeInsightFixtureTestCase {
         myFixture.setTestDataPath(PluginTestCaseBase.getTestDataPathBase() + "/codeInsight/overrideImplement");
     }
 
+    public void testFunctionMethod() {
+        doFileTest();
+    }
+
     public void testFunctionProperty() {
         doFileTest();
     }