diff --git a/compiler/backend/src/org/jetbrains/jet/codegen/AsmUtil.java b/compiler/backend/src/org/jetbrains/jet/codegen/AsmUtil.java
index 315c4bbb2de..63880fdecc8 100644
--- a/compiler/backend/src/org/jetbrains/jet/codegen/AsmUtil.java
+++ b/compiler/backend/src/org/jetbrains/jet/codegen/AsmUtil.java
@@ -291,23 +291,19 @@ public class AsmUtil {
         if (isEnumEntry(memberDescriptor)) {
             return NO_FLAG_PACKAGE_PRIVATE;
         }
+        if (memberDescriptor instanceof ConstructorDescriptor && isAnonymousObject(memberDescriptor.getContainingDeclaration())) {
+            return NO_FLAG_PACKAGE_PRIVATE;
+        }
         if (memberVisibility != Visibilities.PRIVATE) {
             return null;
         }
         // the following code is only for PRIVATE visibility of member
         if (memberDescriptor instanceof ConstructorDescriptor) {
-            if (isAnonymousObject(containingDeclaration)) {
-                return NO_FLAG_PACKAGE_PRIVATE;
-            }
-
             ClassKind kind = ((ClassDescriptor) containingDeclaration).getKind();
-            if (kind == ClassKind.OBJECT) {
+            if (kind == ClassKind.OBJECT || kind == ClassKind.ENUM_ENTRY) {
                 return NO_FLAG_PACKAGE_PRIVATE;
             }
-            else if (kind == ClassKind.ENUM_ENTRY) {
-                return NO_FLAG_PACKAGE_PRIVATE;
-            }
-            else if (kind == ClassKind.ENUM_CLASS) {
+            if (kind == ClassKind.ENUM_CLASS) {
                 //TODO: should be ACC_PRIVATE
                 // see http://youtrack.jetbrains.com/issue/KT-2680
                 return ACC_PROTECTED;
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java
index 54c3c4faa90..59c92b2ed48 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/Errors.java
@@ -180,12 +180,17 @@ public interface Errors {
 
     DiagnosticFactory1<JetClass, ClassDescriptor> ENUM_ENTRY_SHOULD_BE_INITIALIZED = DiagnosticFactory1.create(ERROR, NAME_IDENTIFIER);
     DiagnosticFactory1<JetTypeReference, ClassDescriptor> ENUM_ENTRY_ILLEGAL_TYPE = DiagnosticFactory1.create(ERROR);
+    DiagnosticFactory1<JetClass, ClassDescriptor> LOCAL_ENUM_NOT_ALLOWED = DiagnosticFactory1.create(ERROR, NAME_IDENTIFIER);
 
     // Class objects
 
     DiagnosticFactory0<JetClassObject> MANY_CLASS_OBJECTS = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<JetClassObject> CLASS_OBJECT_NOT_ALLOWED = DiagnosticFactory0.create(ERROR);
 
+    // Objects
+
+    DiagnosticFactory1<JetObjectDeclaration, ClassDescriptor> LOCAL_OBJECT_NOT_ALLOWED = DiagnosticFactory1.create(ERROR, NAME_IDENTIFIER);
+
     // Type parameter declarations
 
     DiagnosticFactory1<JetTypeReference, JetType> FINAL_UPPER_BOUND = DiagnosticFactory1.create(WARNING);
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java
index 276f25ccc57..a9cdf4383f6 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/diagnostics/rendering/DefaultErrorMessages.java
@@ -216,6 +216,8 @@ public class DefaultErrorMessages {
 
         MAP.put(MANY_CLASS_OBJECTS, "Only one class object is allowed per class");
         MAP.put(CLASS_OBJECT_NOT_ALLOWED, "A class object is not allowed here");
+        MAP.put(LOCAL_OBJECT_NOT_ALLOWED, "Named object ''{0}'' is a singleton and cannot be local. Try to use anonymous object instead", NAME);
+        MAP.put(LOCAL_ENUM_NOT_ALLOWED, "Enum class ''{0}'' cannot be local", NAME);
         MAP.put(DELEGATION_IN_TRAIT, "Traits cannot use delegation");
         MAP.put(DELEGATION_NOT_TO_TRAIT, "Only traits can be delegated to");
         MAP.put(UNMET_TRAIT_REQUIREMENT, "Super trait ''{0}'' requires subclasses to extend ''{1}''", NAME, NAME);
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetPsiUtil.java b/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetPsiUtil.java
index 72c4c7653c4..011b9bfa434 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetPsiUtil.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetPsiUtil.java
@@ -835,6 +835,7 @@ public class JetPsiUtil {
                 JetBlockExpression.class, JetClassInitializer.class, JetProperty.class, JetFunction.class, JetParameter.class
         );
         if (container == null) return null;
+        if (container.getParent() instanceof JetScript) return null;
 
         return (container instanceof JetClassInitializer) ? ((JetClassInitializer) container).getBody() : container;
     }
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java
index 70057320445..782d1cd3ce3 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationResolver.java
@@ -182,7 +182,8 @@ public class DeclarationResolver {
                             scopeForPropertyInitializers,
                             property,
                             trace,
-                            c.getOuterDataFlowInfo());
+                            c.getOuterDataFlowInfo()
+                    );
                     packageLike.addPropertyDescriptor(propertyDescriptor);
                     c.getProperties().put(property, propertyDescriptor);
                     c.registerDeclaringScope(property, scopeForPropertyInitializers);
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationsChecker.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationsChecker.java
index 432e183a189..f5b987a4e79 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationsChecker.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/DeclarationsChecker.java
@@ -76,7 +76,7 @@ public class DeclarationsChecker {
                         jetClass, classDescriptor, classDescriptor.getScopeForClassHeaderResolution(), trace);
             }
             else if (classOrObject instanceof JetObjectDeclaration) {
-                checkObject((JetObjectDeclaration) classOrObject);
+                checkObject((JetObjectDeclaration) classOrObject, classDescriptor);
             }
 
             modifiersChecker.checkModifiersForDeclaration(classOrObject, classDescriptor);
@@ -245,8 +245,11 @@ public class DeclarationsChecker {
         public abstract boolean removeNeeded(JetType subject, JetType other);
     }
 
-    private void checkObject(JetObjectDeclaration declaration) {
+    private void checkObject(JetObjectDeclaration declaration, ClassDescriptor classDescriptor) {
         reportErrorIfHasIllegalModifier(declaration);
+        if  (declaration.isLocal() && !declaration.isClassObject() && !declaration.isObjectLiteral()) {
+            trace.report(LOCAL_OBJECT_NOT_ALLOWED.on(declaration, classDescriptor));
+        }
     }
 
     private void checkClass(BodiesResolveContext c, JetClass aClass, ClassDescriptorWithResolutionScopes classDescriptor) {
@@ -264,6 +267,9 @@ public class DeclarationsChecker {
         }
         else if (aClass.isEnum()) {
             checkEnumModifiers(aClass);
+            if (aClass.isLocal()) {
+                trace.report(LOCAL_ENUM_NOT_ALLOWED.on(aClass, classDescriptor));
+            }
         }
         else if (aClass instanceof JetEnumEntry) {
             checkEnumEntry((JetEnumEntry) aClass, classDescriptor);
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/ModifiersChecker.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/ModifiersChecker.java
index 4cb88b19417..08fa22c9317 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/ModifiersChecker.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/ModifiersChecker.java
@@ -37,9 +37,7 @@ import java.util.Collection;
 import java.util.Collections;
 import java.util.Map;
 
-import static org.jetbrains.jet.lang.diagnostics.Errors.ILLEGAL_MODIFIER;
-import static org.jetbrains.jet.lang.diagnostics.Errors.ILLEGAL_PLATFORM_NAME;
-import static org.jetbrains.jet.lang.diagnostics.Errors.INAPPLICABLE_ANNOTATION;
+import static org.jetbrains.jet.lang.diagnostics.Errors.*;
 import static org.jetbrains.jet.lexer.JetTokens.*;
 
 public class ModifiersChecker {
@@ -121,16 +119,17 @@ public class ModifiersChecker {
     }
 
     private void checkInnerModifier(@NotNull JetModifierListOwner modifierListOwner, @NotNull DeclarationDescriptor descriptor) {
-        JetModifierList modifierList = modifierListOwner.getModifierList();
-
-        if (modifierList != null && modifierList.hasModifier(INNER_KEYWORD)) {
+        if (modifierListOwner.hasModifier(INNER_KEYWORD)) {
             if (isIllegalInner(descriptor)) {
-                checkIllegalInThisContextModifiers(modifierList, Collections.singletonList(INNER_KEYWORD));
+                checkIllegalInThisContextModifiers(modifierListOwner.getModifierList(), Collections.singletonList(INNER_KEYWORD));
             }
+            return;
         }
-        else {
-            if (modifierListOwner instanceof JetClass && !(modifierListOwner instanceof JetEnumEntry) && isIllegalNestedClass(descriptor)) {
-                trace.report(Errors.NESTED_CLASS_NOT_ALLOWED.on((JetClass) modifierListOwner));
+        if (modifierListOwner instanceof JetClass && !(modifierListOwner instanceof JetEnumEntry)) {
+            JetClass aClass = (JetClass) modifierListOwner;
+            boolean localEnumError = aClass.isLocal() && aClass.isEnum();
+            if (!localEnumError && isIllegalNestedClass(descriptor)) {
+                trace.report(NESTED_CLASS_NOT_ALLOWED.on(aClass));
             }
         }
     }
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/extension/InlineAnalyzerExtension.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/extension/InlineAnalyzerExtension.java
index 1e37f347da2..9a5ca3f0d26 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/extension/InlineAnalyzerExtension.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/extension/InlineAnalyzerExtension.java
@@ -61,15 +61,6 @@ public class InlineAnalyzerExtension implements FunctionAnalyzerExtension.Analyz
                 trace.report(Errors.NOT_YET_SUPPORTED_IN_INLINE.on(klass, klass, descriptor));
             }
 
-            @Override
-            public void visitObjectDeclaration(@NotNull JetObjectDeclaration declaration) {
-                if (declaration.getParent() instanceof JetObjectLiteralExpression) {
-                    super.visitObjectDeclaration(declaration);
-                } else {
-                    trace.report(Errors.NOT_YET_SUPPORTED_IN_INLINE.on(declaration, declaration, descriptor));
-                }
-            }
-
             @Override
             public void visitNamedFunction(@NotNull JetNamedFunction function) {
                 if (function.getParent().getParent() instanceof JetObjectDeclaration) {
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/lazy/descriptors/AbstractLazyMemberScope.java b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/lazy/descriptors/AbstractLazyMemberScope.java
index 69e5babe6be..69b975138b6 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/resolve/lazy/descriptors/AbstractLazyMemberScope.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/resolve/lazy/descriptors/AbstractLazyMemberScope.java
@@ -181,7 +181,8 @@ public abstract class AbstractLazyMemberScope<D extends DeclarationDescriptor, D
                            trace,
                            // this relies on the assumption that a lazily resolved declaration is not a local one,
                            // thus doesn't have a surrounding data flow
-                           DataFlowInfo.EMPTY);
+                           DataFlowInfo.EMPTY
+                    );
             result.add(propertyDescriptor);
             AnnotationResolver.resolveAnnotationsArguments(propertyDescriptor, trace);
         }
diff --git a/compiler/testData/codegen/box/enum/inFunction.kt b/compiler/testData/codegen/box/enum/inFunction.kt
deleted file mode 100644
index 48c9912b9a0..00000000000
--- a/compiler/testData/codegen/box/enum/inFunction.kt
+++ /dev/null
@@ -1,11 +0,0 @@
-// KT-2948 Assertion fails on a local enum
-
-fun foo(): String {
-   enum class E {
-       OK
-   }
-
-   return E.OK.toString()
-}
-
-fun box(): String = foo()
diff --git a/compiler/testData/codegen/box/enum/kt2673.kt b/compiler/testData/codegen/box/enum/kt2673.kt
deleted file mode 100644
index 4608636d65e..00000000000
--- a/compiler/testData/codegen/box/enum/kt2673.kt
+++ /dev/null
@@ -1,8 +0,0 @@
-fun box(): String {
-    enum class K {
-        O
-        K
-    }
-
-    return K.O.toString() + K.K.toString()
-}
diff --git a/compiler/testData/codegen/box/localClasses/enum.kt b/compiler/testData/codegen/box/localClasses/enum.kt
deleted file mode 100644
index 4608636d65e..00000000000
--- a/compiler/testData/codegen/box/localClasses/enum.kt
+++ /dev/null
@@ -1,8 +0,0 @@
-fun box(): String {
-    enum class K {
-        O
-        K
-    }
-
-    return K.O.toString() + K.K.toString()
-}
diff --git a/compiler/testData/codegen/box/localClasses/localClassInInitializer.kt b/compiler/testData/codegen/box/localClasses/localClassInInitializer.kt
index c9895b6ef13..f50e52be630 100644
--- a/compiler/testData/codegen/box/localClasses/localClassInInitializer.kt
+++ b/compiler/testData/codegen/box/localClasses/localClassInInitializer.kt
@@ -6,11 +6,11 @@ class A {
             open fun s() : String = "O"
         }
 
-        object O: B() {
+        val o = object : B() {
             override fun s(): String = "K"
         }
 
-        a = B().s() + O.s()
+        a = B().s() + o.s()
     }
 }
 
diff --git a/compiler/testData/codegen/box/localClasses/localClassInParameterInitializer.kt b/compiler/testData/codegen/box/localClasses/localClassInParameterInitializer.kt
index 793194c8192..2b5c62666e6 100644
--- a/compiler/testData/codegen/box/localClasses/localClassInParameterInitializer.kt
+++ b/compiler/testData/codegen/box/localClasses/localClassInParameterInitializer.kt
@@ -4,11 +4,11 @@ class A(
                 open fun s() : String = "O"
             }
 
-            object O: B() {
+            val o = object : B() {
                 override fun s(): String = "K"
             }
 
-            B().s() + O.s()
+            B().s() + o.s()
         }()
 )
 
diff --git a/compiler/testData/codegen/box/localClasses/object.kt b/compiler/testData/codegen/box/localClasses/object.kt
index baa86d5a9f5..a96a9237f68 100644
--- a/compiler/testData/codegen/box/localClasses/object.kt
+++ b/compiler/testData/codegen/box/localClasses/object.kt
@@ -1,7 +1,7 @@
 fun box(): String {
-    object K {
+    val k = object {
         val ok = "OK"
     }
 
-    return K.ok
+    return k.ok
 }
diff --git a/compiler/testData/codegen/box/objects/objectInLocalAnonymousObject.kt b/compiler/testData/codegen/box/objects/objectInLocalAnonymousObject.kt
new file mode 100644
index 00000000000..f21c93edf75
--- /dev/null
+++ b/compiler/testData/codegen/box/objects/objectInLocalAnonymousObject.kt
@@ -0,0 +1,10 @@
+fun box(): String {
+    var boo = "OK"
+    var foo = object {
+        val bar = object {
+            val baz = boo
+        }
+    }
+
+    return foo.bar.baz
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/boxWithStdlib/callableReference/function/local/enumExtendsTrait.kt b/compiler/testData/codegen/boxWithStdlib/callableReference/function/local/enumExtendsTrait.kt
index 7fa5592bdf9..36954fb8250 100644
--- a/compiler/testData/codegen/boxWithStdlib/callableReference/function/local/enumExtendsTrait.kt
+++ b/compiler/testData/codegen/boxWithStdlib/callableReference/function/local/enumExtendsTrait.kt
@@ -1,11 +1,11 @@
-fun box(): String {
-    trait Named {
-        fun name(): String
-    }
-    
-    enum class E : Named {
-        OK
-    }
+trait Named {
+    fun name(): String
+}
 
+enum class E : Named {
+    OK
+}
+
+fun box(): String {
     return E.OK.(Named::name)()
 }
diff --git a/compiler/testData/diagnostics/tests/FunctionReturnTypes.kt b/compiler/testData/diagnostics/tests/FunctionReturnTypes.kt
index d6a60379441..65dfc4104ca 100644
--- a/compiler/testData/diagnostics/tests/FunctionReturnTypes.kt
+++ b/compiler/testData/diagnostics/tests/FunctionReturnTypes.kt
@@ -193,7 +193,7 @@ fun testFunctionLiterals() {
     val <!UNUSED_VARIABLE!>endsWithObjectDeclaration<!> : () -> Int = {
         var <!ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE!>x<!> = 1
         x = <!UNUSED_VALUE!>333<!>
-        <!EXPECTED_TYPE_MISMATCH!>object A {}<!>
+        <!EXPECTED_TYPE_MISMATCH!><!LOCAL_OBJECT_NOT_ALLOWED!>object A<!> {}<!>
     }
 
     val <!UNUSED_VARIABLE!>expectedUnitReturnType1<!> = { () : Unit ->
@@ -202,7 +202,7 @@ fun testFunctionLiterals() {
 
     val <!UNUSED_VARIABLE!>expectedUnitReturnType2<!> = { () : Unit ->
         fun meow() : Unit {}
-        object A {}
+        <!LOCAL_OBJECT_NOT_ALLOWED!>object A<!> {}
     }
 
-}
\ No newline at end of file
+}
diff --git a/compiler/testData/diagnostics/tests/enum/localEnums.kt b/compiler/testData/diagnostics/tests/enum/localEnums.kt
new file mode 100644
index 00000000000..9a3ccc61f3e
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/enum/localEnums.kt
@@ -0,0 +1,18 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE
+
+fun foo() {
+    <!LOCAL_ENUM_NOT_ALLOWED!>enum class A<!> {
+        FOO
+        BAR
+    }
+    val foo = A.FOO
+    val b = object {
+        <!LOCAL_ENUM_NOT_ALLOWED!>enum class B<!> {}
+    }
+    class C {
+        <!LOCAL_ENUM_NOT_ALLOWED!>enum class D<!> {}
+    }
+    val f = {
+        <!LOCAL_ENUM_NOT_ALLOWED!>enum class E<!> {}
+    }
+}
diff --git a/compiler/testData/diagnostics/tests/inline/unsupportedConstruction.kt b/compiler/testData/diagnostics/tests/inline/unsupportedConstruction.kt
index c564b001b72..30be1897f4d 100644
--- a/compiler/testData/diagnostics/tests/inline/unsupportedConstruction.kt
+++ b/compiler/testData/diagnostics/tests/inline/unsupportedConstruction.kt
@@ -8,9 +8,9 @@ inline fun unsupported() {
         }
     }<!>
 
-    <!NOT_YET_SUPPORTED_IN_INLINE!>object B{
-        object BInner {}
-    }<!>
+    <!LOCAL_OBJECT_NOT_ALLOWED!>object B<!>{
+        <!LOCAL_OBJECT_NOT_ALLOWED!>object BInner<!> {}
+    }
 
     <!NOT_YET_SUPPORTED_IN_INLINE!>fun local() {
         fun localInner() {}
diff --git a/compiler/testData/diagnostics/tests/inner/referenceToSelfInLocal.kt b/compiler/testData/diagnostics/tests/inner/referenceToSelfInLocal.kt
index e7b46fbd9b0..ddd18236cdd 100644
--- a/compiler/testData/diagnostics/tests/inner/referenceToSelfInLocal.kt
+++ b/compiler/testData/diagnostics/tests/inner/referenceToSelfInLocal.kt
@@ -11,7 +11,7 @@ fun f() {
         }
     }
 
-    object MyObject {
+    <!LOCAL_OBJECT_NOT_ALLOWED!>object MyObject<!> {
         {
             val <!UNUSED_VARIABLE!>obj<!>: MyObject = MyObject
         }
diff --git a/compiler/testData/diagnostics/tests/objects/ObjectsLocal.kt b/compiler/testData/diagnostics/tests/objects/ObjectsLocal.kt
index 605ca0ee97d..47841bf069e 100644
--- a/compiler/testData/diagnostics/tests/objects/ObjectsLocal.kt
+++ b/compiler/testData/diagnostics/tests/objects/ObjectsLocal.kt
@@ -14,7 +14,7 @@ fun test() {
     }
     b.foo()
 
-    object B {
+    <!LOCAL_OBJECT_NOT_ALLOWED!>object B<!> {
         fun foo() {}
     }
     B.foo()
diff --git a/compiler/testData/diagnostics/tests/objects/localObjects.kt b/compiler/testData/diagnostics/tests/objects/localObjects.kt
new file mode 100644
index 00000000000..882e3e0aa53
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/objects/localObjects.kt
@@ -0,0 +1,15 @@
+// !DIAGNOSTICS: -UNUSED_VARIABLE
+
+fun foo() {
+    <!LOCAL_OBJECT_NOT_ALLOWED!>object a<!> {}
+    val b = object {
+        <!LOCAL_OBJECT_NOT_ALLOWED!>object c<!> {}
+    }
+    b.<!NESTED_CLASS_ACCESSED_VIA_INSTANCE_REFERENCE!>c<!>
+    class A {
+        <!LOCAL_OBJECT_NOT_ALLOWED!>object d<!> {}
+    }
+    val f = {
+        <!LOCAL_OBJECT_NOT_ALLOWED!>object e<!> {}
+    }
+}
\ No newline at end of file
diff --git a/compiler/testData/repl/objects/localObject.repl b/compiler/testData/repl/objects/localObject.repl
new file mode 100644
index 00000000000..7dcfbc9bb22
--- /dev/null
+++ b/compiler/testData/repl/objects/localObject.repl
@@ -0,0 +1,5 @@
+>>> fun foo() {
+...   object Bar {
+...   }
+... }
+ERROR: /line4.kts: (2, 1) Named object 'Bar' is a singleton and cannot be local. Try to use anonymous object instead
\ 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 253c1e82a11..efaf773507c 100644
--- a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
@@ -3194,6 +3194,11 @@ public class JetDiagnosticsTestGenerated extends AbstractJetDiagnosticsTest {
                 doTest("compiler/testData/diagnostics/tests/enum/kt2834.kt");
             }
             
+            @TestMetadata("localEnums.kt")
+            public void testLocalEnums() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/enum/localEnums.kt");
+            }
+            
             @TestMetadata("starImportNestedClassAndEntries.kt")
             public void testStarImportNestedClassAndEntries() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/enum/starImportNestedClassAndEntries.kt");
@@ -5921,6 +5926,11 @@ public class JetDiagnosticsTestGenerated extends AbstractJetDiagnosticsTest {
                 doTest("compiler/testData/diagnostics/tests/objects/localObjectInsideObject.kt");
             }
             
+            @TestMetadata("localObjects.kt")
+            public void testLocalObjects() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/objects/localObjects.kt");
+            }
+            
             @TestMetadata("objectLiteralExpressionTypeMismatch.kt")
             public void testObjectLiteralExpressionTypeMismatch() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/objects/objectLiteralExpressionTypeMismatch.kt");
diff --git a/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxCodegenTestGenerated.java
index dab8433f233..9e56e157289 100644
--- a/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/codegen/generated/BlackBoxCodegenTestGenerated.java
@@ -2114,11 +2114,6 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest("compiler/testData/codegen/box/enum/entrywithinner.kt");
         }
         
-        @TestMetadata("inFunction.kt")
-        public void testInFunction() throws Exception {
-            doTest("compiler/testData/codegen/box/enum/inFunction.kt");
-        }
-        
         @TestMetadata("inPackage.kt")
         public void testInPackage() throws Exception {
             doTest("compiler/testData/codegen/box/enum/inPackage.kt");
@@ -2149,11 +2144,6 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest("compiler/testData/codegen/box/enum/kt2350.kt");
         }
         
-        @TestMetadata("kt2673.kt")
-        public void testKt2673() throws Exception {
-            doTest("compiler/testData/codegen/box/enum/kt2673.kt");
-        }
-        
         @TestMetadata("name.kt")
         public void testName() throws Exception {
             doTest("compiler/testData/codegen/box/enum/name.kt");
@@ -3336,11 +3326,6 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest("compiler/testData/codegen/box/localClasses/anonymousObjectInParameterInitializer.kt");
         }
         
-        @TestMetadata("enum.kt")
-        public void testEnum() throws Exception {
-            doTest("compiler/testData/codegen/box/localClasses/enum.kt");
-        }
-        
         @TestMetadata("inExtensionFunction.kt")
         public void testInExtensionFunction() throws Exception {
             doTest("compiler/testData/codegen/box/localClasses/inExtensionFunction.kt");
@@ -4059,6 +4044,11 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest("compiler/testData/codegen/box/objects/nestedObjectWithSuperclass.kt");
         }
         
+        @TestMetadata("objectInLocalAnonymousObject.kt")
+        public void testObjectInLocalAnonymousObject() throws Exception {
+            doTest("compiler/testData/codegen/box/objects/objectInLocalAnonymousObject.kt");
+        }
+        
         @TestMetadata("objectLiteral.kt")
         public void testObjectLiteral() throws Exception {
             doTest("compiler/testData/codegen/box/objects/objectLiteral.kt");
diff --git a/compiler/tests/org/jetbrains/jet/repl/ReplInterpreterTestGenerated.java b/compiler/tests/org/jetbrains/jet/repl/ReplInterpreterTestGenerated.java
index c8c16861279..25085bc261d 100644
--- a/compiler/tests/org/jetbrains/jet/repl/ReplInterpreterTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/repl/ReplInterpreterTestGenerated.java
@@ -186,6 +186,11 @@ public class ReplInterpreterTestGenerated extends AbstractReplInterpreterTest {
             doTest("compiler/testData/repl/objects/emptyObject.repl");
         }
         
+        @TestMetadata("localObject.repl")
+        public void testLocalObject() throws Exception {
+            doTest("compiler/testData/repl/objects/localObject.repl");
+        }
+        
         @TestMetadata("simpleObjectDeclaration.repl")
         public void testSimpleObjectDeclaration() throws Exception {
             doTest("compiler/testData/repl/objects/simpleObjectDeclaration.repl");
diff --git a/compiler/tests/org/jetbrains/jet/types/JetDefaultModalityModifiersTest.java b/compiler/tests/org/jetbrains/jet/types/JetDefaultModalityModifiersTest.java
index 086af96c381..a70c5d11866 100644
--- a/compiler/tests/org/jetbrains/jet/types/JetDefaultModalityModifiersTest.java
+++ b/compiler/tests/org/jetbrains/jet/types/JetDefaultModalityModifiersTest.java
@@ -134,8 +134,8 @@ public class JetDefaultModalityModifiersTest extends JetLiteFixture {
 
             List<JetDeclaration> declarations = aClass.getDeclarations();
             JetProperty property = (JetProperty) declarations.get(0);
-            PropertyDescriptor propertyDescriptor = descriptorResolver.resolvePropertyDescriptor(classDescriptor, scope, property,
-                                                                                                 JetTestUtils.DUMMY_TRACE, DataFlowInfo.EMPTY);
+            PropertyDescriptor propertyDescriptor = descriptorResolver.resolvePropertyDescriptor(
+                    classDescriptor, scope, property, JetTestUtils.DUMMY_TRACE, DataFlowInfo.EMPTY);
 
             assertEquals(expectedPropertyModality, propertyDescriptor.getModality());
         }
@@ -147,8 +147,8 @@ public class JetDefaultModalityModifiersTest extends JetLiteFixture {
 
             List<JetDeclaration> declarations = aClass.getDeclarations();
             JetProperty property = (JetProperty) declarations.get(0);
-            PropertyDescriptor propertyDescriptor = descriptorResolver.resolvePropertyDescriptor(classDescriptor, scope, property,
-                                                                                                 JetTestUtils.DUMMY_TRACE, DataFlowInfo.EMPTY);
+            PropertyDescriptor propertyDescriptor = descriptorResolver.resolvePropertyDescriptor(
+                    classDescriptor, scope, property, JetTestUtils.DUMMY_TRACE, DataFlowInfo.EMPTY);
             PropertyAccessorDescriptor propertyAccessor = isGetter
                                                           ? propertyDescriptor.getGetter()
                                                           : propertyDescriptor.getSetter();
diff --git a/core/descriptors/src/org/jetbrains/jet/lang/resolve/DescriptorUtils.java b/core/descriptors/src/org/jetbrains/jet/lang/resolve/DescriptorUtils.java
index 10ed897673d..35edbc96c36 100644
--- a/core/descriptors/src/org/jetbrains/jet/lang/resolve/DescriptorUtils.java
+++ b/core/descriptors/src/org/jetbrains/jet/lang/resolve/DescriptorUtils.java
@@ -289,9 +289,12 @@ public class DescriptorUtils {
     @NotNull
     public static Visibility getDefaultConstructorVisibility(@NotNull ClassDescriptor classDescriptor) {
         ClassKind classKind = classDescriptor.getKind();
-        if (classKind == ClassKind.ENUM_CLASS || classKind.isSingleton() || isAnonymousObject(classDescriptor)) {
+        if (classKind == ClassKind.ENUM_CLASS || classKind.isSingleton()) {
             return Visibilities.PRIVATE;
         }
+        if (isAnonymousObject(classDescriptor)) {
+            return Visibilities.INTERNAL;
+        }
         assert classKind == ClassKind.CLASS || classKind == ClassKind.TRAIT || classKind == ClassKind.ANNOTATION_CLASS;
         return Visibilities.PUBLIC;
     }
diff --git a/core/descriptors/src/org/jetbrains/jet/lang/resolve/name/FqNamesUtil.kt b/core/descriptors/src/org/jetbrains/jet/lang/resolve/name/FqNamesUtil.kt
index baa9fed928d..d109911addb 100644
--- a/core/descriptors/src/org/jetbrains/jet/lang/resolve/name/FqNamesUtil.kt
+++ b/core/descriptors/src/org/jetbrains/jet/lang/resolve/name/FqNamesUtil.kt
@@ -70,16 +70,16 @@ public fun ImportPath.isImported(alreadyImported: ImportPath): Boolean {
 
 public fun ImportPath.isImported(imports: Iterable<ImportPath>): Boolean = imports.any { isImported(it) }
 
+// Check that it is javaName(\.javaName)* or an empty string
+private enum class State {
+    BEGINNING
+    MIDDLE
+    AFTER_DOT
+}
+
 public fun isValidJavaFqName(qualifiedName: String?): Boolean {
     if (qualifiedName == null) return false
 
-    // Check that it is javaName(\.javaName)* or an empty string
-    enum class State {
-        BEGINNING
-        MIDDLE
-        AFTER_DOT
-    }
-
     var state = State.BEGINNING
 
     for (c in qualifiedName) {
diff --git a/idea/src/org/jetbrains/jet/plugin/refactoring/rename/RenameKotlinPropertyProcessor.kt b/idea/src/org/jetbrains/jet/plugin/refactoring/rename/RenameKotlinPropertyProcessor.kt
index cb7a7b52295..e2d57cff636 100644
--- a/idea/src/org/jetbrains/jet/plugin/refactoring/rename/RenameKotlinPropertyProcessor.kt
+++ b/idea/src/org/jetbrains/jet/plugin/refactoring/rename/RenameKotlinPropertyProcessor.kt
@@ -90,18 +90,18 @@ public class RenameKotlinPropertyProcessor : RenamePsiElementProcessor() {
         }
     }
 
+    private enum class UsageKind {
+        SIMPLE_PROPERTY_USAGE
+        GETTER_USAGE
+        SETTER_USAGE
+    }
+
     override fun renameElement(element: PsiElement?, newName: String?, usages: Array<out UsageInfo>, listener: RefactoringElementListener?) {
         if (element !is JetProperty) {
             super.renameElement(element, newName, usages, listener)
             return
         }
 
-        enum class UsageKind {
-            SIMPLE_PROPERTY_USAGE
-            GETTER_USAGE
-            SETTER_USAGE
-        }
-
         val oldGetterName = PropertyCodegen.getterName(element.getNameAsName())
         val oldSetterName = PropertyCodegen.setterName(element.getNameAsName())
 
diff --git a/idea/src/org/jetbrains/jet/plugin/search/usagesSearch/usagesSearch.kt b/idea/src/org/jetbrains/jet/plugin/search/usagesSearch/usagesSearch.kt
index 1847cb671e3..d6f8331a9e5 100644
--- a/idea/src/org/jetbrains/jet/plugin/search/usagesSearch/usagesSearch.kt
+++ b/idea/src/org/jetbrains/jet/plugin/search/usagesSearch/usagesSearch.kt
@@ -159,14 +159,14 @@ public class KotlinPsiSearchHelper(private val project: Project): PsiSearchHelpe
 
 public object UsagesSearch: QueryFactory<PsiReference, UsagesSearchRequest>() {
     {
-        object ExecutorImpl: QueryExecutorBase<PsiReference, UsagesSearchRequest>() {
+        val executorImpl = object : QueryExecutorBase<PsiReference, UsagesSearchRequest>() {
             override fun processQuery(request: UsagesSearchRequest, consumer: Processor<PsiReference>) {
                 val searchHelper = KotlinPsiSearchHelper(request.project)
                 request.items.filter { it.filter != False }.all { searchHelper.processFilesWithText(it, consumer) }
             }
         }
 
-        registerExecutor(ExecutorImpl)
+        registerExecutor(executorImpl)
     }
 
     fun search(request: UsagesSearchRequest): Query<PsiReference> = with(request) {
diff --git a/idea/testData/checker/LocalObjects.kt b/idea/testData/checker/LocalObjects.kt
index ebce487b825..d050ad6d848 100644
--- a/idea/testData/checker/LocalObjects.kt
+++ b/idea/testData/checker/LocalObjects.kt
@@ -12,7 +12,7 @@
     }
     b.foo()
 
-    object B {
+    <error>object B</error> {
       fun foo() {}
     }
     B.foo()
diff --git a/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassInitializer.kt b/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassInitializer.kt
index e8e5c1d8be5..04f472246d7 100644
--- a/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassInitializer.kt
+++ b/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassInitializer.kt
@@ -17,4 +17,4 @@ class MyClass() {
 //public constructor MyClass() defined in test.MyClass
 //val a: test.MyClass.<init>.<no name provided> defined in test.MyClass.<init>
 //internal final class <no name provided> : test.A defined in test.MyClass.<init>
-//private constructor <no name provided>() defined in test.MyClass.<init>.<no name provided>
\ No newline at end of file
+//internal constructor <no name provided>() defined in test.MyClass.<init>.<no name provided>
\ No newline at end of file
diff --git a/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassParameterInitializer.kt b/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassParameterInitializer.kt
index f69afc12c3e..549ae471b63 100644
--- a/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassParameterInitializer.kt
+++ b/idea/testData/resolve/additionalLazyResolve/anonymousObjectInClassParameterInitializer.kt
@@ -15,4 +15,4 @@ class MyClass(
 //public constructor MyClass(a: test.A = ...) defined in test.MyClass
 //value-parameter val a: test.A = ... defined in test.MyClass.<init>
 //internal final class <no name provided> : test.A defined in test.MyClass.<init>
-//private constructor <no name provided>() defined in test.MyClass.<init>.<no name provided>
\ No newline at end of file
+//internal constructor <no name provided>() defined in test.MyClass.<init>.<no name provided>
\ No newline at end of file
diff --git a/js/js.translator/src/org/jetbrains/k2js/translate/utils/TranslationUtils.java b/js/js.translator/src/org/jetbrains/k2js/translate/utils/TranslationUtils.java
index 4ea808732a4..7dc8f4ca5b0 100644
--- a/js/js.translator/src/org/jetbrains/k2js/translate/utils/TranslationUtils.java
+++ b/js/js.translator/src/org/jetbrains/k2js/translate/utils/TranslationUtils.java
@@ -25,6 +25,7 @@ import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jet.lang.descriptors.*;
 import org.jetbrains.jet.lang.descriptors.impl.AnonymousFunctionDescriptor;
 import org.jetbrains.jet.lang.psi.*;
+import org.jetbrains.jet.lang.resolve.DescriptorUtils;
 import org.jetbrains.jet.lang.resolve.OverrideResolver;
 import org.jetbrains.jet.lang.resolve.name.FqName;
 import org.jetbrains.jet.lang.resolve.scopes.JetScope;
@@ -37,6 +38,7 @@ import java.util.*;
 
 import static com.google.dart.compiler.backend.js.ast.JsBinaryOperator.*;
 import static org.jetbrains.jet.lang.resolve.DescriptorUtils.getFqName;
+import static org.jetbrains.jet.lang.resolve.DescriptorUtils.isAnonymousObject;
 import static org.jetbrains.k2js.translate.context.Namer.getKotlinBackingFieldName;
 import static org.jetbrains.k2js.translate.utils.BindingUtils.getCallableDescriptorForOperationExpression;
 import static org.jetbrains.k2js.translate.utils.JsAstUtils.*;
@@ -418,9 +420,11 @@ public final class TranslationUtils {
     public static String getSuggestedNameForInnerDeclaration(TranslationContext context, DeclarationDescriptor descriptor) {
         String suggestedName = "";
         DeclarationDescriptor containingDeclaration = descriptor.getContainingDeclaration();
+        //noinspection ConstantConditions
         if (containingDeclaration != null &&
             !(containingDeclaration instanceof ClassOrPackageFragmentDescriptor) &&
-            !(containingDeclaration instanceof AnonymousFunctionDescriptor)) {
+            !(containingDeclaration instanceof AnonymousFunctionDescriptor) &&
+            !(containingDeclaration instanceof ConstructorDescriptor && isAnonymousObject(containingDeclaration.getContainingDeclaration()))) {
             suggestedName = context.getNameForDescriptor(containingDeclaration).getIdent();
         }
 
diff --git a/js/js.translator/testData/closure/cases/closureLocalInNestedObject.kt b/js/js.translator/testData/closure/cases/closureLocalInNestedObject.kt
index 7ad0004e8e6..75fdcd8a6fc 100644
--- a/js/js.translator/testData/closure/cases/closureLocalInNestedObject.kt
+++ b/js/js.translator/testData/closure/cases/closureLocalInNestedObject.kt
@@ -3,7 +3,7 @@ package foo
 fun box(): String {
     var boo = "OK"
     var foo = object {
-        object bar {
+        val bar = object {
             val baz = boo
         }
     }
diff --git a/js/js.translator/testData/object/cases/objectInMethod.kt b/js/js.translator/testData/object/cases/objectInMethod.kt
index 61d26aa3910..b87be60051a 100644
--- a/js/js.translator/testData/object/cases/objectInMethod.kt
+++ b/js/js.translator/testData/object/cases/objectInMethod.kt
@@ -2,13 +2,10 @@ package foo
 
 class A() {
     fun f(): Boolean {
-        object t {
-            val c = true;
-        }
         val z = object {
             val c = true
         }
-        return t.c && z.c
+        return z.c
     }
 }
 
diff --git a/js/js.translator/testData/object/cases/objectInObjectWithClosure.kt b/js/js.translator/testData/object/cases/objectInObjectWithClosure.kt
index dfd3d65d374..6e91b5c701a 100644
--- a/js/js.translator/testData/object/cases/objectInObjectWithClosure.kt
+++ b/js/js.translator/testData/object/cases/objectInObjectWithClosure.kt
@@ -4,7 +4,7 @@ class Foo {
     fun bar(param: String): String {
         val local = "world!"
         var a = object {
-            object b {
+            val b = object {
                 val bar = param + local
             }
         }