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 f08411886d9..bf8d3b47c2a 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetPsiUtil.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/psi/JetPsiUtil.java
@@ -241,6 +241,17 @@ public class JetPsiUtil {
                 return parent;
             }
         }
+        if (parent instanceof JetTryExpression) {
+            JetTryExpression tryExpression = (JetTryExpression) parent;
+            if (tryExpression.getTryBlock() == block) {
+                return parent;
+            }
+            for (JetCatchClause clause : tryExpression.getCatchClauses()) {
+                if (clause.getCatchBody() == block) {
+                    return parent;
+                }
+            }
+        }
         return null;
     }
 
@@ -257,6 +268,9 @@ public class JetPsiUtil {
             if (expression == null) {
                 expression = getDirectParentOfTypeForBlock(block, JetFunctionLiteral.class);
             }
+            if (expression == null) {
+                expression = getDirectParentOfTypeForBlock(block, JetTryExpression.class);
+            }
             if (expression != null) {
                 return isImplicitlyUsed(expression);
             }
diff --git a/compiler/testData/diagnostics/tests/controlFlowAnalysis/kt1977.jet b/compiler/testData/diagnostics/tests/controlFlowAnalysis/kt1977.jet
new file mode 100644
index 00000000000..843bd4cb5f2
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/controlFlowAnalysis/kt1977.jet
@@ -0,0 +1,51 @@
+package kt1977
+
+//KT-1977 Wrong 'unused expression' in catch
+fun strToInt(s : String) : Int? =
+try {
+    Integer.parseInt(s)
+} catch(e : NumberFormatException) {
+    null
+}
+
+//more tests
+fun test1(s : String) : Int? {
+    return try {
+        <!UNUSED_EXPRESSION!>88<!>
+        Integer.parseInt(s)
+        22
+    }
+    catch (e: NumberFormatException) {
+        44
+    }
+    finally {
+        <!UNUSED_EXPRESSION!>22<!>
+    }
+}
+
+fun test2(s : String) : Int? {
+    return try {
+        <!UNUSED_EXPRESSION!>88<!>
+        Integer.parseInt(s)
+        22
+    } finally {
+            <!UNUSED_FUNCTION_LITERAL!>{
+            (x : Int) -> x
+            }<!>
+    }
+}
+
+
+//KT-2015 False "Expression is unused" warnings
+fun foo() {
+    val <!UNUSED_VARIABLE!>i<!> : Int = try{
+        bar()
+        1
+    }
+    catch(e : Exception){
+        0
+    }
+}
+
+fun bar() {
+}
\ No newline at end of file