diff --git a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/AlternativeSignatureParsing.java b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/AlternativeSignatureParsing.java
index afb80800966..bbcee33fe6e 100644
--- a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/AlternativeSignatureParsing.java
+++ b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/AlternativeSignatureParsing.java
@@ -29,10 +29,7 @@ import org.jetbrains.jet.lang.psi.*;
 import org.jetbrains.jet.lang.resolve.AnalyzingUtils;
 import org.jetbrains.jet.lang.resolve.DescriptorUtils;
 import org.jetbrains.jet.lang.resolve.name.Name;
-import org.jetbrains.jet.lang.types.JetType;
-import org.jetbrains.jet.lang.types.JetTypeImpl;
-import org.jetbrains.jet.lang.types.TypeProjection;
-import org.jetbrains.jet.lang.types.TypeUtils;
+import org.jetbrains.jet.lang.types.*;
 import org.jetbrains.jet.lang.types.lang.JetStandardClasses;
 import org.jetbrains.jet.lang.types.lang.JetStandardLibrary;
 import org.jetbrains.jet.resolve.DescriptorRenderer;
@@ -110,7 +107,28 @@ class AlternativeSignatureParsing {
                         TypeProjection argument = arguments.get(i);
                         JetType alternativeType =
                                 computeAlternativeTypeFromAnnotation(argumentAlternativeTypeElement, argument.getType());
-                        altArguments.add(new TypeProjection(argument.getProjectionKind(), alternativeType));
+                        Variance variance = argument.getProjectionKind();
+                        if (type instanceof JetUserType) {
+                            JetTypeProjection typeProjection = ((JetUserType) type).getTypeArguments().get(i);
+                            Variance altVariance = Variance.INVARIANT;
+                            switch (typeProjection.getProjectionKind()) {
+                                case IN:
+                                    altVariance = Variance.IN_VARIANCE;
+                                    break;
+                                case OUT:
+                                    altVariance = Variance.OUT_VARIANCE;
+                                    break;
+                                case STAR:
+                                    throw new AlternativeSignatureMismatchException(
+                                            "Star projection is not available in alternative signatures");
+                                default:
+                            }
+                            if (altVariance != variance) {
+                                throw new AlternativeSignatureMismatchException(String.format(
+                                        "Variance mismatch, actual: %s, in alternative signature: %s", variance, altVariance));
+                            }
+                        }
+                        altArguments.add(new TypeProjection(variance, alternativeType));
                     }
                     return new JetTypeImpl(autoType.getAnnotations(), autoType.getConstructor(), false,
                                            altArguments, autoType.getMemberScope());
diff --git a/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.java b/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.java
new file mode 100644
index 00000000000..c8269205606
--- /dev/null
+++ b/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.java
@@ -0,0 +1,15 @@
+package test;
+
+import java.lang.Number;
+import java.lang.UnsupportedOperationException;
+import java.util.*;
+import java.util.List;
+
+import jet.runtime.typeinfo.KotlinSignature;
+
+public class WrongTypeVariance {
+    @KotlinSignature("fun copy(a : List<out Number>, b : List<Number>) : List<Number>")
+    public List<Number> copy(List<? extends Number> from, List<? super Number> to) {
+        throw new UnsupportedOperationException();
+    }
+}
diff --git a/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.kt b/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.kt
new file mode 100644
index 00000000000..c66c998e196
--- /dev/null
+++ b/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.kt
@@ -0,0 +1,9 @@
+package test
+
+import java.util.*
+
+public open class WrongTypeVariance : Object() {
+    public open fun copy(p0 : List<out java.lang.Number?>?, p1 : List<in java.lang.Number?>?) : List<java.lang.Number?>? {
+        throw UnsupportedOperationException()
+    }
+}
diff --git a/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.txt b/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.txt
new file mode 100644
index 00000000000..ddca82de9ef
--- /dev/null
+++ b/compiler/testData/readJavaBinaryClass/kotlinSignature/error/WrongTypeVariance.txt
@@ -0,0 +1,6 @@
+namespace test
+
+public open class test.WrongTypeVariance : java.lang.Object {
+    public final /*constructor*/ fun <init>(): test.WrongTypeVariance
+    public open fun copy(/*0*/ p0: java.util.List<out java.lang.Number?>?, /*1*/ p1: java.util.List<in java.lang.Number?>?): java.util.List<java.lang.Number?>?
+}