diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/AnonymousObjectTransformer.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/AnonymousObjectTransformer.java
index 211b2bdd82a..f459c4b3930 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/AnonymousObjectTransformer.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/AnonymousObjectTransformer.java
@@ -81,6 +81,7 @@ public class AnonymousObjectTransformer {
 
     @NotNull
     public InlineResult doTransform(@NotNull AnonymousObjectGeneration anonymousObjectGen, @NotNull FieldRemapper parentRemapper) {
+        final List<InnerClassNode> innerClassNodes = new ArrayList<InnerClassNode>();
         ClassBuilder classBuilder = createClassBuilder();
         final List<MethodNode> methodsToTransform = new ArrayList<MethodNode>();
 
@@ -95,6 +96,11 @@ public class AnonymousObjectTransformer {
                 super.visit(version, access, name, signature, superName, interfaces);
             }
 
+            @Override
+            public void visitInnerClass(String name, String outerName, String innerName, int access) {
+                innerClassNodes.add(new InnerClassNode(name, outerName, innerName, access));
+            }
+
             @Override
             public void visitOuterClass(@NotNull String owner, String name, String desc) {
                 InliningContext parent = inliningContext.getParent();
@@ -200,6 +206,10 @@ public class AnonymousObjectTransformer {
 
         SourceMapper.Companion.flushToClassBuilder(sourceMapper, classBuilder);
 
+        for (InnerClassNode node : innerClassNodes) {
+            classBuilder.getVisitor().visitInnerClass(node.name, node.outerName, node.innerName, node.access);
+        }
+
         classBuilder.done();
 
         anonymousObjectGen.setNewLambdaType(newLambdaType);
diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/MethodInliner.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/MethodInliner.java
index 1b573fdfc2e..8606a0cffea 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/MethodInliner.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/MethodInliner.java
@@ -262,7 +262,14 @@ public class MethodInliner {
                             visitFieldInsn(Opcodes.GETSTATIC, capturedParamDesc.getContainingLambdaName(),
                                            "$$$" + capturedParamDesc.getFieldName(), capturedParamDesc.getType().getDescriptor());
                         }
-                        super.visitMethodInsn(opcode, anonymousObjectGen.getNewLambdaType().getInternalName(), name, anonymousObjectGen.getNewConstructorDescriptor(), itf);
+                        String newInternalName = anonymousObjectGen.getNewLambdaType().getInternalName();
+                        super.visitMethodInsn(opcode, newInternalName, name, anonymousObjectGen.getNewConstructorDescriptor(), itf);
+
+                        //TODO: add new inner class also for other contexts
+                        if (inliningContext.getParent() instanceof RegeneratedClassContext) {
+                            inliningContext.getParent().typeRemapper.addAdditionalMappings(anonymousObjectGen.getOwnerInternalName(), newInternalName);
+                        }
+
                         anonymousObjectGen = null;
                     } else {
                         super.visitMethodInsn(opcode, changeOwnerForExternalPackage(owner, opcode), name, desc, itf);
diff --git a/compiler/testData/codegen/boxInline/innerClasses/kt10259.1.kt b/compiler/testData/codegen/boxInline/innerClasses/kt10259.1.kt
new file mode 100644
index 00000000000..c1c7854b88d
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/innerClasses/kt10259.1.kt
@@ -0,0 +1,22 @@
+import test.*
+
+fun box(): String {
+    var encl1 = "fail";
+    var encl2 = "fail";
+    test {
+        {
+            val p = object {}
+            encl1 = p.javaClass.enclosingMethod.declaringClass.name
+            {
+
+                val p = object {}
+                encl2 = p.javaClass.enclosingMethod.declaringClass.name
+            }()
+        }()
+    }
+
+    if (encl1 != "Kt10259_1Kt\$box\$\$inlined\$test\$lambda$1") return "fail 1: $encl1"
+    if (encl2 != "Kt10259_1Kt\$box\$\$inlined\$test\$lambda\$lambda$2") return "fail 2: $encl2"
+
+    return "OK"
+}
diff --git a/compiler/testData/codegen/boxInline/innerClasses/kt10259.2.kt b/compiler/testData/codegen/boxInline/innerClasses/kt10259.2.kt
new file mode 100644
index 00000000000..e82c338479c
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/innerClasses/kt10259.2.kt
@@ -0,0 +1,5 @@
+package test
+
+inline fun test(s: () -> Unit) {
+    s()
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/bytecodeText/kt10259.kt b/compiler/testData/codegen/bytecodeText/kt10259.kt
new file mode 100644
index 00000000000..bf6b46da44e
--- /dev/null
+++ b/compiler/testData/codegen/bytecodeText/kt10259.kt
@@ -0,0 +1,22 @@
+fun box(): String {
+    var encl1 = "fail";
+    var encl2 = "fail";
+    test {
+        {
+            encl1 = "OK"
+            {
+                encl2 = "OK"
+            }()
+        }()
+    }
+
+    return "OK"
+}
+
+inline fun test(s: () -> Unit) {
+    s()
+}
+
+// 2 INNERCLASS Kt10259Kt\$box\$\$inlined\$test\$lambda\$1
+// 2 INNERCLASS Kt10259Kt\$box\$\$inlined\$test\$lambda\$lambda\$1
+// 4 INNERCLASS
\ No newline at end of file
diff --git a/compiler/testData/codegen/bytecodeText/kt10259_2.kt b/compiler/testData/codegen/bytecodeText/kt10259_2.kt
new file mode 100644
index 00000000000..c0fe532acaf
--- /dev/null
+++ b/compiler/testData/codegen/bytecodeText/kt10259_2.kt
@@ -0,0 +1,22 @@
+fun box(): String {
+    var encl1 = "fail";
+    test {
+        encl1 = "OK"
+    }
+
+    return encl1
+}
+
+inline fun test(crossinline s: () -> Unit) {
+    {
+        {
+            s()
+        }()
+    }()
+}
+
+// 3 INNERCLASS Kt10259_2Kt\$test\$1 null
+// 2 INNERCLASS Kt10259_2Kt\$test\$1\$1
+// 2 INNERCLASS Kt10259_2Kt\$box\$\$inlined\$test\$1
+// 2 INNERCLASS Kt10259_2Kt\$box\$\$inlined\$test\$lambda\$1
+// 9 INNERCLASS
\ No newline at end of file
diff --git a/compiler/testData/codegen/bytecodeText/kt10259_3.kt b/compiler/testData/codegen/bytecodeText/kt10259_3.kt
new file mode 100644
index 00000000000..95410821b76
--- /dev/null
+++ b/compiler/testData/codegen/bytecodeText/kt10259_3.kt
@@ -0,0 +1,29 @@
+fun box(): String {
+    var encl1 = "fail";
+    test {
+        {
+            {
+                encl1 = "OK"
+            }()
+        }()
+    }
+
+    return encl1
+}
+
+inline fun test(crossinline s: () -> Unit) {
+    {
+        {
+            s()
+        }()
+    }()
+}
+
+// 3 INNERCLASS Kt10259_3Kt\$test\$1 null
+// 2 INNERCLASS Kt10259_3Kt\$test\$1\$1
+// 2 INNERCLASS Kt10259_3Kt\$box\$\$inlined\$test\$1
+// 2 INNERCLASS Kt10259_3Kt\$box\$\$inlined\$test\$lambda\$1
+// inlined:
+// 2 INNERCLASS Kt10259_3Kt\$box\$\$inlined\$test\$lambda\$lambda\$lambda\$1
+// 2 INNERCLASS Kt10259_3Kt\$box\$\$inlined\$test\$lambda\$lambda\$lambda\$lambda\$1
+// 13 INNERCLASS
\ No newline at end of file
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeTextTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeTextTestGenerated.java
index 28200d65c9c..d056261655b 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeTextTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BytecodeTextTestGenerated.java
@@ -167,6 +167,24 @@ public class BytecodeTextTestGenerated extends AbstractBytecodeTextTest {
         doTest(fileName);
     }
 
+    @TestMetadata("kt10259.kt")
+    public void testKt10259() throws Exception {
+        String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/bytecodeText/kt10259.kt");
+        doTest(fileName);
+    }
+
+    @TestMetadata("kt10259_2.kt")
+    public void testKt10259_2() throws Exception {
+        String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/bytecodeText/kt10259_2.kt");
+        doTest(fileName);
+    }
+
+    @TestMetadata("kt10259_3.kt")
+    public void testKt10259_3() throws Exception {
+        String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/bytecodeText/kt10259_3.kt");
+        doTest(fileName);
+    }
+
     @TestMetadata("kt2202.kt")
     public void testKt2202() throws Exception {
         String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/bytecodeText/kt2202.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/generated/BlackBoxInlineCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/generated/BlackBoxInlineCodegenTestGenerated.java
index 671ed23ae58..4f122688194 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/generated/BlackBoxInlineCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/generated/BlackBoxInlineCodegenTestGenerated.java
@@ -602,6 +602,21 @@ public class BlackBoxInlineCodegenTestGenerated extends AbstractBlackBoxInlineCo
         }
     }
 
+    @TestMetadata("compiler/testData/codegen/boxInline/innerClasses")
+    @TestDataPath("$PROJECT_ROOT")
+    @RunWith(JUnit3RunnerWithInners.class)
+    public static class InnerClasses extends AbstractBlackBoxInlineCodegenTest {
+        public void testAllFilesPresentInInnerClasses() throws Exception {
+            KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/codegen/boxInline/innerClasses"), Pattern.compile("^(.+)\\.1.kt$"), true);
+        }
+
+        @TestMetadata("kt10259.1.kt")
+        public void testKt10259() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/innerClasses/kt10259.1.kt");
+            doTestMultiFileWithInlineCheck(fileName);
+        }
+    }
+
     @TestMetadata("compiler/testData/codegen/boxInline/lambdaClassClash")
     @TestDataPath("$PROJECT_ROOT")
     @RunWith(JUnit3RunnerWithInners.class)
diff --git a/compiler/tests/org/jetbrains/kotlin/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java
index 02899f3bc9b..13a11639910 100644
--- a/compiler/tests/org/jetbrains/kotlin/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/jvm/compiler/CompileKotlinAgainstInlineKotlinTestGenerated.java
@@ -602,6 +602,21 @@ public class CompileKotlinAgainstInlineKotlinTestGenerated extends AbstractCompi
         }
     }
 
+    @TestMetadata("compiler/testData/codegen/boxInline/innerClasses")
+    @TestDataPath("$PROJECT_ROOT")
+    @RunWith(JUnit3RunnerWithInners.class)
+    public static class InnerClasses extends AbstractCompileKotlinAgainstInlineKotlinTest {
+        public void testAllFilesPresentInInnerClasses() throws Exception {
+            KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/codegen/boxInline/innerClasses"), Pattern.compile("^(.+)\\.1.kt$"), true);
+        }
+
+        @TestMetadata("kt10259.1.kt")
+        public void testKt10259() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/innerClasses/kt10259.1.kt");
+            doBoxTestWithInlineCheck(fileName);
+        }
+    }
+
     @TestMetadata("compiler/testData/codegen/boxInline/lambdaClassClash")
     @TestDataPath("$PROJECT_ROOT")
     @RunWith(JUnit3RunnerWithInners.class)