diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CheckArgumentsResolutionPart.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CheckArgumentsResolutionPart.kt
index ecea70aeaf2..cf517fe2b48 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CheckArgumentsResolutionPart.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CheckArgumentsResolutionPart.kt
@@ -19,18 +19,21 @@ package org.jetbrains.kotlin.resolve.calls.components
 import org.jetbrains.kotlin.builtins.getValueParameterTypesFromFunctionType
 import org.jetbrains.kotlin.builtins.isExtensionFunctionType
 import org.jetbrains.kotlin.builtins.isFunctionType
-import org.jetbrains.kotlin.descriptors.FunctionDescriptor
-import org.jetbrains.kotlin.descriptors.PropertyDescriptor
-import org.jetbrains.kotlin.descriptors.ValueParameterDescriptor
+import org.jetbrains.kotlin.descriptors.*
 import org.jetbrains.kotlin.resolve.calls.inference.ConstraintSystemBuilder
 import org.jetbrains.kotlin.resolve.calls.inference.model.ArgumentConstraintPosition
 import org.jetbrains.kotlin.resolve.calls.inference.model.LambdaTypeVariable
 import org.jetbrains.kotlin.resolve.calls.model.*
 import org.jetbrains.kotlin.resolve.calls.tower.isSuccess
 import org.jetbrains.kotlin.types.UnwrappedType
+import org.jetbrains.kotlin.types.checker.captureFromExpression
+import org.jetbrains.kotlin.types.checker.hasSupertypeWithGivenTypeConstructor
 import org.jetbrains.kotlin.types.checker.intersectWrappedTypes
+import org.jetbrains.kotlin.types.lowerIfFlexible
 import org.jetbrains.kotlin.types.typeUtil.builtIns
+import org.jetbrains.kotlin.types.typeUtil.immediateSupertypes
 import org.jetbrains.kotlin.types.typeUtil.supertypes
+import org.jetbrains.kotlin.types.upperIfFlexible
 import org.jetbrains.kotlin.utils.SmartList
 import org.jetbrains.kotlin.utils.addIfNotNull
 import java.lang.UnsupportedOperationException
@@ -202,7 +205,7 @@ internal fun checkExpressionArgument(
         isReceiver: Boolean
 ): KotlinCallDiagnostic? {
     // todo run this approximation only once for call
-    val argumentType = expressionArgument.stableType
+    val argumentType = captureFromTypeParameterUpperBoundIfNeeded(expressionArgument.stableType, expectedType)
 
     fun unstableSmartCastOrSubtypeError(
             unstableType: UnwrappedType?, expectedType: UnwrappedType, position: ArgumentConstraintPosition
@@ -246,6 +249,38 @@ internal fun checkExpressionArgument(
     return null
 }
 
+/**
+ * interface Inv<T>
+ * fun <Y> bar(l: Inv<Y>): Y = ...
+ *
+ * fun <X : Inv<out Int>> foo(x: X) {
+ *      val xr = bar(x)
+ * }
+ * Here we try to capture from upper bound from type parameter.
+ * We replace type of `x` to `Inv<out Int>`(we chose supertype which contains supertype with expectedTypeConstructor) and capture from this type.
+ * It is correct, because it is like this code:
+ * fun <X : Inv<out Int>> foo(x: X) {
+ *      val inv: Inv<out Int> = x
+ *      val xr = bar(inv)
+ * }
+ *
+ */
+private fun captureFromTypeParameterUpperBoundIfNeeded(argumentType: UnwrappedType, expectedType: UnwrappedType): UnwrappedType {
+    val expectedTypeConstructor = expectedType.upperIfFlexible().constructor
+
+    if (argumentType.lowerIfFlexible().constructor.declarationDescriptor is TypeParameterDescriptor) {
+        val chosenSupertype = argumentType.lowerIfFlexible().supertypes().singleOrNull {
+            it.constructor.declarationDescriptor is ClassifierDescriptorWithTypeParameters &&
+            it.unwrap().hasSupertypeWithGivenTypeConstructor(expectedTypeConstructor)
+        }
+        if (chosenSupertype != null) {
+            return captureFromExpression(chosenSupertype.unwrap()) ?: argumentType
+        }
+    }
+
+    return argumentType
+}
+
 // if expression is not stable and has smart casts, then we create this type
 private val ExpressionKotlinCallArgument.unstableType: UnwrappedType?
     get() {
diff --git a/compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.kt b/compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.kt
new file mode 100644
index 00000000000..603295865f2
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.kt
@@ -0,0 +1,11 @@
+interface Inv<T>
+
+fun <Y: X, X : Inv<out String>> foo(x: X, y: Y) {
+    val rX = bar(x)
+    rX.length
+
+    val rY = bar(y)
+    rY.length
+}
+
+fun <Y> bar(<!UNUSED_PARAMETER!>l<!>: Inv<Y>): Y = TODO()
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.txt b/compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.txt
new file mode 100644
index 00000000000..b2ac7794784
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.txt
@@ -0,0 +1,10 @@
+package
+
+public fun </*0*/ Y> bar(/*0*/ l: Inv<Y>): Y
+public fun </*0*/ Y : X, /*1*/ X : Inv<out kotlin.String>> foo(/*0*/ x: X, /*1*/ y: Y): kotlin.Unit
+
+public interface Inv</*0*/ T> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index e6d3a70f706..a4ca4d57edf 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -10236,6 +10236,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                     doTest(fileName);
                 }
 
+                @TestMetadata("captureFromTypeParameterUpperBound.kt")
+                public void testCaptureFromTypeParameterUpperBound() throws Exception {
+                    String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/inference/capturedTypes/captureFromTypeParameterUpperBound.kt");
+                    doTest(fileName);
+                }
+
                 @TestMetadata("captureTypeOnlyOnTopLevel.kt")
                 public void testCaptureTypeOnlyOnTopLevel() throws Exception {
                     String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/inference/capturedTypes/captureTypeOnlyOnTopLevel.kt");
diff --git a/core/descriptors/src/org/jetbrains/kotlin/types/checker/NewKotlinTypeChecker.kt b/core/descriptors/src/org/jetbrains/kotlin/types/checker/NewKotlinTypeChecker.kt
index 9546d45e3b8..5037de9c01a 100644
--- a/core/descriptors/src/org/jetbrains/kotlin/types/checker/NewKotlinTypeChecker.kt
+++ b/core/descriptors/src/org/jetbrains/kotlin/types/checker/NewKotlinTypeChecker.kt
@@ -391,6 +391,9 @@ object NullabilityChecker {
 
 }
 
+fun UnwrappedType.hasSupertypeWithGivenTypeConstructor(typeConstructor: TypeConstructor) =
+        TypeCheckerContext(false).anySupertype(lowerIfFlexible(), { it.constructor == typeConstructor }, { SupertypesPolicy.LowerIfFlexible })
+
 /**
  * ClassType means that type constructor for this type is type for real class or interface
  */