diff --git a/idea/src/org/jetbrains/jet/plugin/formatter/JetCodeStyleSettings.java b/idea/src/org/jetbrains/jet/plugin/formatter/JetCodeStyleSettings.java
index e6ccc82f97c..a5ddd3afe90 100644
--- a/idea/src/org/jetbrains/jet/plugin/formatter/JetCodeStyleSettings.java
+++ b/idea/src/org/jetbrains/jet/plugin/formatter/JetCodeStyleSettings.java
@@ -37,6 +37,7 @@ public class JetCodeStyleSettings extends CustomCodeStyleSettings {
     public boolean SPACE_AROUND_FUNCTION_TYPE_ARROW = true;
 
     public boolean SPACE_AROUND_WHEN_ARROW = true;
+    public boolean SPACE_BEFORE_LAMBDA_ARROW = true;
 
     public static JetCodeStyleSettings getInstance(Project project) {
         return CodeStyleSettingsManager.getSettings(project).getCustomSettings(JetCodeStyleSettings.class);
diff --git a/idea/src/org/jetbrains/jet/plugin/formatter/JetFormattingModelBuilder.java b/idea/src/org/jetbrains/jet/plugin/formatter/JetFormattingModelBuilder.java
index b810daccb87..b254adf099b 100644
--- a/idea/src/org/jetbrains/jet/plugin/formatter/JetFormattingModelBuilder.java
+++ b/idea/src/org/jetbrains/jet/plugin/formatter/JetFormattingModelBuilder.java
@@ -106,6 +106,7 @@ public class JetFormattingModelBuilder implements FormattingModelBuilder {
                 .afterInside(COLON, TYPE_PARAMETER).spaceIf(jetSettings.SPACE_AFTER_EXTEND_COLON)
 
                 .between(VALUE_ARGUMENT_LIST, FUNCTION_LITERAL_EXPRESSION).spaces(1)
+                .beforeInside(ARROW, FUNCTION_LITERAL).spaceIf(jetSettings.SPACE_BEFORE_LAMBDA_ARROW)
 
                 //when
                 .aroundInside(ARROW, WHEN_ENTRY).spaceIf(jetSettings.SPACE_AROUND_WHEN_ARROW)
diff --git a/idea/src/org/jetbrains/jet/plugin/formatter/JetLanguageCodeStyleSettingsProvider.java b/idea/src/org/jetbrains/jet/plugin/formatter/JetLanguageCodeStyleSettingsProvider.java
index 56b38dbd07e..22d9ad23575 100644
--- a/idea/src/org/jetbrains/jet/plugin/formatter/JetLanguageCodeStyleSettingsProvider.java
+++ b/idea/src/org/jetbrains/jet/plugin/formatter/JetLanguageCodeStyleSettingsProvider.java
@@ -130,6 +130,11 @@ public class JetLanguageCodeStyleSettingsProvider extends LanguageCodeStyleSetti
                 consumer.showCustomOption(JetCodeStyleSettings.class, "SPACE_AROUND_WHEN_ARROW",
                                           "Surround arrow in \"when\" clause with spaces",
                                           CodeStyleSettingsCustomizable.SPACES_OTHER);
+
+                consumer.showCustomOption(JetCodeStyleSettings.class, "SPACE_BEFORE_LAMBDA_ARROW",
+                                          "Before lambda arrow",
+                                          CodeStyleSettingsCustomizable.SPACES_OTHER);
+
                 break;
             case WRAPPING_AND_BRACES_SETTINGS:
                 consumer.showStandardOptions(
diff --git a/idea/testData/formatter/LambdaArrow.kt b/idea/testData/formatter/LambdaArrow.kt
new file mode 100644
index 00000000000..ccaae3ddf93
--- /dev/null
+++ b/idea/testData/formatter/LambdaArrow.kt
@@ -0,0 +1,3 @@
+val f: (Int, Int, Int) -> Int = { x, y, z           -> x + y + z }
+
+// SET_FALSE: SPACE_BEFORE_LAMBDA_ARROW
\ No newline at end of file
diff --git a/idea/testData/formatter/LambdaArrow_after.kt b/idea/testData/formatter/LambdaArrow_after.kt
new file mode 100644
index 00000000000..60fd61f3099
--- /dev/null
+++ b/idea/testData/formatter/LambdaArrow_after.kt
@@ -0,0 +1,3 @@
+val f: (Int, Int, Int) -> Int = { x, y, z-> x + y + z }
+
+// SET_FALSE: SPACE_BEFORE_LAMBDA_ARROW
\ No newline at end of file
diff --git a/idea/testData/formatter/LambdaArrow_after_inv.kt b/idea/testData/formatter/LambdaArrow_after_inv.kt
new file mode 100644
index 00000000000..c9a3caca990
--- /dev/null
+++ b/idea/testData/formatter/LambdaArrow_after_inv.kt
@@ -0,0 +1,3 @@
+val f: (Int, Int, Int) -> Int = { x, y, z -> x + y + z }
+
+// SET_FALSE: SPACE_BEFORE_LAMBDA_ARROW
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java b/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java
index ff49ea3c73a..860bf045c76 100644
--- a/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java
+++ b/idea/tests/org/jetbrains/jet/formatter/JetFormatterTest.java
@@ -143,6 +143,10 @@ public class JetFormatterTest extends AbstractJetFormatterTest {
         doTestWithInvert();
     }
 
+    public void testLambdaArrow() throws Exception {
+        doTestWithInvert();
+    }
+
     @Override
     public void doTest() throws Exception {
         String originalFileText = AbstractJetFormatterTest.loadFile(getTestName(false) + ".kt");