diff --git a/idea/src/org/jetbrains/jet/plugin/intentions/MoveLambdaOutsideParenthesesIntention.kt b/idea/src/org/jetbrains/jet/plugin/intentions/MoveLambdaOutsideParenthesesIntention.kt
index dc5660429fb..c4d9b79b59c 100644
--- a/idea/src/org/jetbrains/jet/plugin/intentions/MoveLambdaOutsideParenthesesIntention.kt
+++ b/idea/src/org/jetbrains/jet/plugin/intentions/MoveLambdaOutsideParenthesesIntention.kt
@@ -20,37 +20,34 @@ import com.intellij.openapi.editor.Editor
 import org.jetbrains.jet.lang.psi.JetCallExpression
 import org.jetbrains.jet.lang.psi.JetFunctionLiteralExpression
 import org.jetbrains.jet.lang.psi.JetPsiFactory
+import org.jetbrains.jet.lang.psi.JetExpression
+import org.jetbrains.jet.lang.psi.JetLabeledExpression
 
 public class MoveLambdaOutsideParenthesesIntention : JetSelfTargetingIntention<JetCallExpression>(
         "move.lambda.outside.parentheses", javaClass()) {
 
+    private fun isLambdaOrLabeledLambda(expression: JetExpression?): Boolean =
+            expression is JetFunctionLiteralExpression ||
+                    (expression is JetLabeledExpression && isLambdaOrLabeledLambda(expression.getBaseExpression()))
+
     override fun isApplicableTo(element: JetCallExpression): Boolean {
         val args = element.getValueArguments()
-        return args.size > 0 && args.last?.getArgumentExpression() is JetFunctionLiteralExpression
+        return args.size > 0 && isLambdaOrLabeledLambda(args.last?.getArgumentExpression())
     }
 
     override fun applyTo(element: JetCallExpression, editor: Editor) {
         val args = element.getValueArguments()
-        val literal = args.last!!.getArgumentExpression()?.getText()
+        val functionLiteral = args.last!!.getArgumentExpression()?.getText()
         val calleeText = element.getCalleeExpression()?.getText()
-        if (calleeText == null || literal == null) return
+        if (calleeText == null || functionLiteral == null) return
 
-        val params =
-            args.subList(0, args.size - 1).map {
-                val name = it?.getArgumentName()?.getText()
-                val arg = it?.getArgumentExpression()?.getText()
-                if (name != null) {
-                    "$name = $arg"
-                } else {
-                    "$arg"
-                }
-            }.makeString(", ", "(", ")")
+        val params = args.subList(0, args.size - 1).map { it?.asElement()?.getText() ?: "" }.makeString(", ", "(", ")")
 
         val newCall =
             if (params == "()") {
-                "$calleeText $literal"
+                "$calleeText $functionLiteral"
             } else {
-                "$calleeText$params $literal"
+                "$calleeText$params $functionLiteral"
             }
         element.replace(JetPsiFactory.createExpression(element.getProject(), newCall))
     }
diff --git a/idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt b/idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt
new file mode 100644
index 00000000000..b5aef8a9b38
--- /dev/null
+++ b/idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt
@@ -0,0 +1,8 @@
+// IS_APPLICABLE: true
+fun foo() {
+    bar<caret>(2, @l{ it })
+}
+
+fun bar(a: Int, b: (Int) -> Int) {
+    b(a)
+}
diff --git a/idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt.after b/idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt.after
new file mode 100644
index 00000000000..f50c3e47809
--- /dev/null
+++ b/idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt.after
@@ -0,0 +1,8 @@
+// IS_APPLICABLE: true
+fun foo() {
+    bar(2) @l{ it }
+}
+
+fun bar(a: Int, b: (Int) -> Int) {
+    b(a)
+}
diff --git a/idea/tests/org/jetbrains/jet/plugin/intentions/CodeTransformationTestGenerated.java b/idea/tests/org/jetbrains/jet/plugin/intentions/CodeTransformationTestGenerated.java
index 950aab2c417..07cadcde7d0 100644
--- a/idea/tests/org/jetbrains/jet/plugin/intentions/CodeTransformationTestGenerated.java
+++ b/idea/tests/org/jetbrains/jet/plugin/intentions/CodeTransformationTestGenerated.java
@@ -2537,6 +2537,11 @@ public class CodeTransformationTestGenerated extends AbstractCodeTransformationT
             doTestMoveLambdaOutsideParentheses("idea/testData/intentions/moveLambdaOutsideParentheses/inapplicable3.kt");
         }
         
+        @TestMetadata("labeledLambda.kt")
+        public void testLabeledLambda() throws Exception {
+            doTestMoveLambdaOutsideParentheses("idea/testData/intentions/moveLambdaOutsideParentheses/labeledLambda.kt");
+        }
+        
         @TestMetadata("lambdaWithCommas.kt")
         public void testLambdaWithCommas() throws Exception {
             doTestMoveLambdaOutsideParentheses("idea/testData/intentions/moveLambdaOutsideParentheses/lambdaWithCommas.kt");