diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DescriptorResolver.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DescriptorResolver.java
index 671306e4c99..cbffe636710 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DescriptorResolver.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DescriptorResolver.java
@@ -39,6 +39,7 @@ import org.jetbrains.jet.lang.resolve.scopes.WritableScopeImpl;
 import org.jetbrains.jet.lang.types.*;
 import org.jetbrains.jet.lang.types.checker.JetTypeChecker;
 import org.jetbrains.jet.lang.types.expressions.ExpressionTypingServices;
+import org.jetbrains.jet.lang.types.lang.InlineStrategy;
 import org.jetbrains.jet.lang.types.lang.KotlinBuiltIns;
 import org.jetbrains.jet.lexer.JetKeywordToken;
 import org.jetbrains.jet.lexer.JetTokens;
@@ -340,7 +341,7 @@ public class DescriptorResolver {
         Modality modality = resolveModalityFromModifiers(function, getDefaultModality(containingDescriptor, hasBody));
         Visibility visibility = resolveVisibilityFromModifiers(function, getDefaultVisibility(function, containingDescriptor));
         JetModifierList modifierList = function.getModifierList();
-        boolean isInline = (modifierList != null) && modifierList.hasModifier(JetTokens.INLINE_KEYWORD);
+        boolean isInline = KotlinBuiltIns.getInstance().getInlineType(functionDescriptor) != InlineStrategy.NOT_INLINE;
         functionDescriptor.initialize(
                 receiverType,
                 getExpectedThisObjectIfNeeded(containingDescriptor),
diff --git a/compiler/frontend/src/org/jetbrains/jet/lexer/JetTokens.java b/compiler/frontend/src/org/jetbrains/jet/lexer/JetTokens.java
index 54ce12d59b9..873f1ecbce2 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lexer/JetTokens.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lexer/JetTokens.java
@@ -155,7 +155,6 @@ public interface JetTokens {
     JetKeywordToken CATCH_KEYWORD     = JetKeywordToken.softKeyword("catch");
     JetKeywordToken OUT_KEYWORD       = JetKeywordToken.softKeyword("out");
     JetKeywordToken VARARG_KEYWORD       = JetKeywordToken.softKeyword("vararg");
-    JetKeywordToken INLINE_KEYWORD       = JetKeywordToken.softKeyword("inline");
     JetKeywordToken REIFIED_KEYWORD = JetKeywordToken.softKeyword("reified");
 
     JetKeywordToken FINALLY_KEYWORD   = JetKeywordToken.softKeyword("finally");
@@ -173,12 +172,12 @@ public interface JetTokens {
     TokenSet SOFT_KEYWORDS = TokenSet.create(IMPORT_KEYWORD, WHERE_KEYWORD, BY_KEYWORD, GET_KEYWORD,
                                              SET_KEYWORD, ABSTRACT_KEYWORD, ENUM_KEYWORD, OPEN_KEYWORD, INNER_KEYWORD, ANNOTATION_KEYWORD,
                                              OVERRIDE_KEYWORD, PRIVATE_KEYWORD, PUBLIC_KEYWORD, INTERNAL_KEYWORD, PROTECTED_KEYWORD,
-                                             CATCH_KEYWORD, FINALLY_KEYWORD, OUT_KEYWORD, FINAL_KEYWORD, VARARG_KEYWORD, INLINE_KEYWORD, REIFIED_KEYWORD
+                                             CATCH_KEYWORD, FINALLY_KEYWORD, OUT_KEYWORD, FINAL_KEYWORD, VARARG_KEYWORD, REIFIED_KEYWORD
     );
 
     TokenSet MODIFIER_KEYWORDS = TokenSet.create(ABSTRACT_KEYWORD, ENUM_KEYWORD,
                                                  OPEN_KEYWORD, INNER_KEYWORD, ANNOTATION_KEYWORD, OVERRIDE_KEYWORD, PRIVATE_KEYWORD, PUBLIC_KEYWORD, INTERNAL_KEYWORD,
-                                                 PROTECTED_KEYWORD, OUT_KEYWORD, IN_KEYWORD, FINAL_KEYWORD, VARARG_KEYWORD, INLINE_KEYWORD, REIFIED_KEYWORD
+                                                 PROTECTED_KEYWORD, OUT_KEYWORD, IN_KEYWORD, FINAL_KEYWORD, VARARG_KEYWORD, REIFIED_KEYWORD
     );
 
     TokenSet VISIBILITY_MODIFIERS = TokenSet.create(PRIVATE_KEYWORD, PUBLIC_KEYWORD, INTERNAL_KEYWORD, PROTECTED_KEYWORD);
diff --git a/core/descriptors/src/org/jetbrains/jet/lang/types/lang/InlineStrategy.java b/core/descriptors/src/org/jetbrains/jet/lang/types/lang/InlineStrategy.java
new file mode 100644
index 00000000000..8f18e29eeb1
--- /dev/null
+++ b/core/descriptors/src/org/jetbrains/jet/lang/types/lang/InlineStrategy.java
@@ -0,0 +1,23 @@
+/*
+ * Copyright 2010-2013 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.jetbrains.jet.lang.types.lang;
+
+public enum InlineStrategy {
+    AS_FUNCTION,
+    IN_PLACE,
+    NOT_INLINE;
+}
diff --git a/core/descriptors/src/org/jetbrains/jet/lang/types/lang/InlineUtil.java b/core/descriptors/src/org/jetbrains/jet/lang/types/lang/InlineUtil.java
new file mode 100644
index 00000000000..7e3659b7347
--- /dev/null
+++ b/core/descriptors/src/org/jetbrains/jet/lang/types/lang/InlineUtil.java
@@ -0,0 +1,82 @@
+/*
+ * Copyright 2010-2013 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.jetbrains.jet.lang.types.lang;
+
+import org.jetbrains.annotations.NotNull;
+import org.jetbrains.annotations.Nullable;
+import org.jetbrains.jet.lang.descriptors.CallableDescriptor;
+import org.jetbrains.jet.lang.descriptors.ClassDescriptor;
+import org.jetbrains.jet.lang.descriptors.PropertyDescriptor;
+import org.jetbrains.jet.lang.descriptors.ValueParameterDescriptor;
+import org.jetbrains.jet.lang.descriptors.annotations.Annotated;
+import org.jetbrains.jet.lang.descriptors.annotations.AnnotationDescriptor;
+import org.jetbrains.jet.lang.resolve.constants.CompileTimeConstant;
+import org.jetbrains.jet.lang.resolve.constants.EnumValue;
+
+import java.util.List;
+
+public class InlineUtil {
+
+    @NotNull
+    public static InlineStrategy getInlineType(@NotNull Annotated annotated) {
+        return getInlineType(annotated.getAnnotations());
+    }
+
+    public static boolean hasNoinlineAnnotation(@NotNull CallableDescriptor valueParameterDescriptor) {
+        KotlinBuiltIns builtIns = KotlinBuiltIns.getInstance();
+        return KotlinBuiltIns.containsAnnotation(valueParameterDescriptor, builtIns.getNoinlineClassAnnotation());
+    }
+
+    @NotNull
+    public static InlineStrategy getInlineType(@Nullable List<AnnotationDescriptor> annotations) {
+        KotlinBuiltIns builtIns = KotlinBuiltIns.getInstance();
+        ClassDescriptor annotationClass = builtIns.getInlineClassAnnotation();
+        AnnotationDescriptor annotation = getAnnotation(annotations, annotationClass);
+        if (annotation != null) {
+            ValueParameterDescriptor parameterDescriptor = annotationClass.getConstructors().iterator().next().getValueParameters().get(0);
+            CompileTimeConstant<?> argument = annotation.getValueArgument(parameterDescriptor);
+            if (argument == null) {
+                //default parameter
+                return InlineStrategy.AS_FUNCTION;
+            }
+            else {
+                assert argument instanceof EnumValue : "Inline annotation parameter should be inline entry but was: " + argument + "!";
+                PropertyDescriptor value = ((EnumValue)argument).getValue();
+                String name = value.getName().asString();
+                return name.equals(InlineStrategy.IN_PLACE.name()) ? InlineStrategy.IN_PLACE : InlineStrategy.AS_FUNCTION;
+            }
+        }
+        else {
+            return InlineStrategy.NOT_INLINE;
+        }
+    }
+
+    @Nullable
+    private static AnnotationDescriptor getAnnotation(@Nullable List<AnnotationDescriptor> annotations, @NotNull ClassDescriptor annotationClass) {
+        if (annotations != null) {
+            for (AnnotationDescriptor annotation : annotations) {
+                if (annotationClass.equals(annotation.getType().getConstructor().getDeclarationDescriptor())) {
+                    return annotation;
+                }
+            }
+        }
+        return null;
+    }
+
+
+}
+
diff --git a/core/descriptors/src/org/jetbrains/jet/lang/types/lang/KotlinBuiltIns.java b/core/descriptors/src/org/jetbrains/jet/lang/types/lang/KotlinBuiltIns.java
index 5f37b6fe00e..95e101a2619 100644
--- a/core/descriptors/src/org/jetbrains/jet/lang/types/lang/KotlinBuiltIns.java
+++ b/core/descriptors/src/org/jetbrains/jet/lang/types/lang/KotlinBuiltIns.java
@@ -24,10 +24,14 @@ import org.jetbrains.jet.lang.DefaultModuleConfiguration;
 import org.jetbrains.jet.lang.ModuleConfiguration;
 import org.jetbrains.jet.lang.PlatformToKotlinClassMap;
 import org.jetbrains.jet.lang.descriptors.*;
+import org.jetbrains.jet.lang.descriptors.annotations.Annotated;
 import org.jetbrains.jet.lang.descriptors.annotations.AnnotationDescriptor;
 import org.jetbrains.jet.lang.descriptors.impl.NamespaceDescriptorImpl;
 import org.jetbrains.jet.lang.descriptors.impl.ValueParameterDescriptorImpl;
 import org.jetbrains.jet.lang.resolve.DescriptorUtils;
+import org.jetbrains.jet.lang.resolve.constants.CompileTimeConstant;
+import org.jetbrains.jet.lang.resolve.constants.EnumValue;
+import org.jetbrains.jet.storage.LockBasedStorageManager;
 import org.jetbrains.jet.lang.resolve.name.FqName;
 import org.jetbrains.jet.lang.resolve.name.Name;
 import org.jetbrains.jet.lang.resolve.name.SpecialNames;
@@ -36,7 +40,6 @@ import org.jetbrains.jet.lang.resolve.scopes.RedeclarationHandler;
 import org.jetbrains.jet.lang.resolve.scopes.WritableScope;
 import org.jetbrains.jet.lang.resolve.scopes.WritableScopeImpl;
 import org.jetbrains.jet.lang.types.*;
-import org.jetbrains.jet.storage.LockBasedStorageManager;
 
 import java.io.IOException;
 import java.util.*;
@@ -379,6 +382,15 @@ public class KotlinBuiltIns {
         return getBuiltInClassByName("data");
     }
 
+    public ClassDescriptor getNoinlineClassAnnotation() {
+        return getBuiltInClassByName("noinline");
+    }
+
+    @NotNull
+    public ClassDescriptor getInlineClassAnnotation() {
+        return getBuiltInClassByName("inline");
+    }
+
     @NotNull
     public ClassDescriptor getSuppressAnnotationClass() {
         return getBuiltInClassByName("suppress");
@@ -943,7 +955,7 @@ public class KotlinBuiltIns {
         return containsAnnotation(declarationDescriptor, getDeprecatedAnnotation());
     }
 
-    private static boolean containsAnnotation(DeclarationDescriptor descriptor, ClassDescriptor annotationClass) {
+    static boolean containsAnnotation(DeclarationDescriptor descriptor, ClassDescriptor annotationClass) {
         List<AnnotationDescriptor> annotations = descriptor.getOriginal().getAnnotations();
         if (annotations != null) {
             for (AnnotationDescriptor annotation : annotations) {
diff --git a/idea/src/org/jetbrains/jet/plugin/completion/JetKeywordCompletionContributor.java b/idea/src/org/jetbrains/jet/plugin/completion/JetKeywordCompletionContributor.java
index e6515ac1bf7..4cab8284aaf 100644
--- a/idea/src/org/jetbrains/jet/plugin/completion/JetKeywordCompletionContributor.java
+++ b/idea/src/org/jetbrains/jet/plugin/completion/JetKeywordCompletionContributor.java
@@ -237,7 +237,7 @@ public class JetKeywordCompletionContributor extends CompletionContributor {
         registerScopeKeywordsCompletion(InTopFilter.class.getName(), new InTopFilter(),
                                         ABSTRACT_KEYWORD, CLASS_KEYWORD, ENUM_KEYWORD,
                                         FINAL_KEYWORD, FUN_KEYWORD, GET_KEYWORD,
-                                        IMPORT_KEYWORD, INLINE_KEYWORD, INTERNAL_KEYWORD,
+                                        IMPORT_KEYWORD, INTERNAL_KEYWORD,
                                         OPEN_KEYWORD, PACKAGE_KEYWORD, PRIVATE_KEYWORD,
                                         PROTECTED_KEYWORD, PUBLIC_KEYWORD, SET_KEYWORD, TRAIT_KEYWORD,
                                         TYPE_KEYWORD, VAL_KEYWORD, VAR_KEYWORD);
@@ -247,13 +247,13 @@ public class JetKeywordCompletionContributor extends CompletionContributor {
                 new AndFilter(
                         new SuperParentFilter(new ClassFilter(JetModifierList.class)),
                         new NotFilter(new InTypeParameterFirstChildFilter())),
-                ABSTRACT_KEYWORD, FINAL_KEYWORD, INLINE_KEYWORD, INTERNAL_KEYWORD,
+                ABSTRACT_KEYWORD, FINAL_KEYWORD, INTERNAL_KEYWORD,
                 OPEN_KEYWORD, PRIVATE_KEYWORD, PROTECTED_KEYWORD, PUBLIC_KEYWORD);
 
         registerScopeKeywordsCompletion(InClassBodyFilter.class.getName(), new InClassBodyFilter(),
                                         ABSTRACT_KEYWORD, CLASS_KEYWORD, ENUM_KEYWORD,
                                         FINAL_KEYWORD, FUN_KEYWORD, GET_KEYWORD,
-                                        INLINE_KEYWORD, INTERNAL_KEYWORD,
+                                        INTERNAL_KEYWORD,
                                         OPEN_KEYWORD, OVERRIDE_KEYWORD, PRIVATE_KEYWORD,
                                         PROTECTED_KEYWORD, PUBLIC_KEYWORD, SET_KEYWORD, TRAIT_KEYWORD,
                                         TYPE_KEYWORD, VAL_KEYWORD, VAR_KEYWORD);
@@ -264,7 +264,7 @@ public class JetKeywordCompletionContributor extends CompletionContributor {
                                         DO_KEYWORD, ELSE_KEYWORD, ENUM_KEYWORD,
                                         FALSE_KEYWORD, FINALLY_KEYWORD, FOR_KEYWORD, FUN_KEYWORD,
                                         GET_KEYWORD, IF_KEYWORD,
-                                        IN_KEYWORD, INLINE_KEYWORD, INTERNAL_KEYWORD,
+                                        IN_KEYWORD, INTERNAL_KEYWORD,
                                         IS_KEYWORD, NULL_KEYWORD, OBJECT_KEYWORD,
                                         PRIVATE_KEYWORD, PROTECTED_KEYWORD, PUBLIC_KEYWORD,
                                         RETURN_KEYWORD, SET_KEYWORD, SUPER_KEYWORD,
diff --git a/idea/testData/checker/infos/CapturedInInlinedClosure.kt b/idea/testData/checker/infos/CapturedInInlinedClosure.kt
index ce3c54afac4..558b3446c9a 100644
--- a/idea/testData/checker/infos/CapturedInInlinedClosure.kt
+++ b/idea/testData/checker/infos/CapturedInInlinedClosure.kt
@@ -1,4 +1,4 @@
-<info>inline</info> fun <T> run(f: () -> T) = f()
+inline fun <T> run(f: () -> T) = f()
 fun run2(f: () -> Unit) = f()
 
 fun inline() {
diff --git a/idea/testData/completion/keywords/InClassBeforeFun.kt b/idea/testData/completion/keywords/InClassBeforeFun.kt
index 1e180828fcc..ab93bf8406b 100644
--- a/idea/testData/completion/keywords/InClassBeforeFun.kt
+++ b/idea/testData/completion/keywords/InClassBeforeFun.kt
@@ -30,7 +30,6 @@ public class Test {
 // ABSENT: if
 // ABSENT: import
 // ABSENT: in
-// EXIST:  inline
 // EXIST:  internal
 // ABSENT: is
 // ABSENT: null
diff --git a/idea/testData/completion/keywords/InClassScope.kt b/idea/testData/completion/keywords/InClassScope.kt
index c8793d80321..672b8d8d089 100644
--- a/idea/testData/completion/keywords/InClassScope.kt
+++ b/idea/testData/completion/keywords/InClassScope.kt
@@ -25,7 +25,6 @@ class TestClass {
 // ABSENT: if
 // ABSENT: import
 // ABSENT: in
-// EXIST:  inline
 // EXIST:  internal
 // ABSENT: is
 // ABSENT: null
diff --git a/idea/testData/completion/keywords/TopScope.kt b/idea/testData/completion/keywords/TopScope.kt
index 5e1f254be14..07a32f340b0 100644
--- a/idea/testData/completion/keywords/TopScope.kt
+++ b/idea/testData/completion/keywords/TopScope.kt
@@ -21,7 +21,6 @@
 // ABSENT: if
 // EXIST:  import
 // ABSENT: in
-// EXIST:  inline
 // EXIST:  internal
 // ABSENT: is
 // ABSENT: null
diff --git a/idea/testData/editor/quickDoc/MethodFromStdLib.kt b/idea/testData/editor/quickDoc/MethodFromStdLib.kt
index 024ad34bf58..18a85696d26 100644
--- a/idea/testData/editor/quickDoc/MethodFromStdLib.kt
+++ b/idea/testData/editor/quickDoc/MethodFromStdLib.kt
@@ -2,4 +2,4 @@ fun test() {
     listOf(1, 2, 4).<caret>filter { it > 0 }
 }
 
-// INFO: <b>public</b> <b>fun</b> &lt;T> jet.Iterable&lt;T&gt;.filter(predicate: (T) &rarr; jet.Boolean): jet.List&lt;T&gt; <i>defined in</i> kotlin<br/><p>Returns a list containing all elements which match the given *predicate*<br/></p>
\ No newline at end of file
+// INFO: jet.inline <b>public</b> <b>fun</b> &lt;T> jet.Iterable&lt;T&gt;.filter(predicate: (T) &rarr; jet.Boolean): jet.List&lt;T&gt; <i>defined in</i> kotlin<br/><p>Returns a list containing all elements which match the given *predicate*<br/></p>
diff --git a/idea/testData/libraries/decompiled/LibrariesPackage.kt b/idea/testData/libraries/decompiled/LibrariesPackage.kt
index a358a20ce30..a646243ef55 100644
--- a/idea/testData/libraries/decompiled/LibrariesPackage.kt
+++ b/idea/testData/libraries/decompiled/LibrariesPackage.kt
@@ -33,4 +33,4 @@ package testData.libraries
 
 [public fun processDouble(d: testData.libraries.Double): jet.Unit { /* compiled code */ }]
 
-[public fun <T> T.filter(predicate: (T) -> jet.Boolean): T? { /* compiled code */ }]
\ No newline at end of file
+[jet.inline public fun <T> T.filter(predicate: (T) -> jet.Boolean): T? { /* compiled code */ }]
\ No newline at end of file