diff --git a/idea/jvm-debugger/jvm-debugger-util/src/org/jetbrains/kotlin/idea/debugger/InlineUtils.kt b/idea/jvm-debugger/jvm-debugger-util/src/org/jetbrains/kotlin/idea/debugger/InlineUtils.kt
index 02de0482a3d..229339d875c 100644
--- a/idea/jvm-debugger/jvm-debugger-util/src/org/jetbrains/kotlin/idea/debugger/InlineUtils.kt
+++ b/idea/jvm-debugger/jvm-debugger-util/src/org/jetbrains/kotlin/idea/debugger/InlineUtils.kt
@@ -14,18 +14,20 @@ import org.jetbrains.kotlin.load.java.JvmAbi.LOCAL_VARIABLE_NAME_PREFIX_INLINE_F
 val INLINED_THIS_REGEX = getLocalVariableNameRegexInlineAware(AsmUtil.INLINE_DECLARATION_SITE_THIS)
 
 fun getInlineDepth(variables: List<LocalVariableProxyImpl>): Int {
-    val inlineFunVariables = variables
-        .filter { it.name().startsWith(LOCAL_VARIABLE_NAME_PREFIX_INLINE_FUNCTION) }
+    val rawInlineFunDepth = variables.count { it.name().startsWith(LOCAL_VARIABLE_NAME_PREFIX_INLINE_FUNCTION) }
 
-    if (inlineFunVariables.isEmpty()) {
-        return 0
+    for (variable in variables.sortedByDescending { it.variable }) {
+        val name = variable.name()
+        val depth = getInlineDepth(name)
+        if (depth > 0) {
+            return depth
+        } else if (name.startsWith(LOCAL_VARIABLE_NAME_PREFIX_INLINE_ARGUMENT)) {
+            // TODO this heuristics doesn't support debugging inlined lambdas inside inline functions.
+            return 0
+        }
     }
 
-    val closestInlineFun = inlineFunVariables.maxBy { it.variable }!!.variable
-    val inlineLambdaDepth = variables
-        .count { it.name().startsWith(LOCAL_VARIABLE_NAME_PREFIX_INLINE_ARGUMENT) && it.variable > closestInlineFun }
-
-    return maxOf(0, inlineFunVariables.size - inlineLambdaDepth)
+    return rawInlineFunDepth
 }
 
 fun getInlineDepth(variableName: String): Int {
diff --git a/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.kt b/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.kt
new file mode 100644
index 00000000000..65dd00ca68b
--- /dev/null
+++ b/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.kt
@@ -0,0 +1,25 @@
+package nestedInlineFun
+
+fun main() {
+    val a = 1
+    foo {
+        val b = 2
+        //Breakpoint!
+        val c = 0
+    }
+}
+
+inline fun foo(block: () -> Unit) {
+    val x = 3
+    bar(1, block)
+}
+
+inline fun bar(count: Int, block: () -> Unit) {
+    var i = count
+    while (i-- > 0) {
+        block()
+    }
+}
+
+// SHOW_KOTLIN_VARIABLES
+// PRINT_FRAME
\ No newline at end of file
diff --git a/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.out b/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.out
new file mode 100644
index 00000000000..c535b62e036
--- /dev/null
+++ b/idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.out
@@ -0,0 +1,10 @@
+LineBreakpoint created at nestedInlineFun.kt:8
+Run Java
+Connected to the target VM
+nestedInlineFun.kt:8
+ frame    = main:8, NestedInlineFunKt {nestedInlineFun}
+   local    = a: int = 1 (sp = nestedInlineFun.kt, 4)
+   local    = b: int = 2 (sp = nestedInlineFun.kt, 6)
+Disconnected from the target VM
+
+Process finished with exit code 0
diff --git a/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java
index 80f19a6dac3..5b147240530 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/debugger/evaluate/KotlinEvaluateExpressionTestGenerated.java
@@ -900,6 +900,11 @@ public class KotlinEvaluateExpressionTestGenerated extends AbstractKotlinEvaluat
                 runTest("idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/localFunctionMangling.kt");
             }
 
+            @TestMetadata("nestedInlineFun.kt")
+            public void testNestedInlineFun() throws Exception {
+                runTest("idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/nestedInlineFun.kt");
+            }
+
             @TestMetadata("remapThis.kt")
             public void testRemapThis() throws Exception {
                 runTest("idea/testData/debugger/tinyApp/src/evaluate/singleBreakpoint/frame/remapThis.kt");