diff --git a/idea/src/org/jetbrains/kotlin/idea/editor/KotlinEnterHandler.kt b/idea/src/org/jetbrains/kotlin/idea/editor/KotlinEnterHandler.kt
index af430f67122..564bb991faa 100644
--- a/idea/src/org/jetbrains/kotlin/idea/editor/KotlinEnterHandler.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/editor/KotlinEnterHandler.kt
@@ -16,24 +16,26 @@
 
 package org.jetbrains.kotlin.idea.editor
 
-import com.intellij.codeInsight.editorActions.enter.EnterHandlerDelegateAdapter
-import com.intellij.psi.PsiFile
-import com.intellij.openapi.editor.Editor
-import com.intellij.openapi.util.Ref
-import com.intellij.openapi.actionSystem.DataContext
-import com.intellij.openapi.editor.actionSystem.EditorActionHandler
-import com.intellij.codeInsight.editorActions.enter.EnterHandlerDelegate
 import com.intellij.codeInsight.CodeInsightSettings
-import com.intellij.psi.PsiDocumentManager
-import com.intellij.psi.codeStyle.CodeStyleManager
-import org.jetbrains.kotlin.psi.JetFile
-import com.intellij.util.IncorrectOperationException
-import org.jetbrains.kotlin.lexer.JetTokens
-import org.jetbrains.kotlin.psi.JetFunctionLiteral
-import org.jetbrains.kotlin.idea.codeInsight.CodeInsightUtils
+import com.intellij.codeInsight.editorActions.enter.EnterHandlerDelegate
+import com.intellij.codeInsight.editorActions.enter.EnterHandlerDelegateAdapter
+import com.intellij.openapi.actionSystem.DataContext
 import com.intellij.openapi.diagnostic.Logger
-import com.intellij.psi.tree.TokenSet
+import com.intellij.openapi.editor.Editor
+import com.intellij.openapi.editor.actionSystem.EditorActionHandler
+import com.intellij.openapi.util.Ref
+import com.intellij.psi.PsiDocumentManager
+import com.intellij.psi.PsiFile
 import com.intellij.psi.PsiWhiteSpace
+import com.intellij.psi.codeStyle.CodeStyleManager
+import com.intellij.psi.tree.TokenSet
+import com.intellij.util.IncorrectOperationException
+import org.jetbrains.kotlin.idea.codeInsight.CodeInsightUtils
+import org.jetbrains.kotlin.lexer.JetTokens
+import org.jetbrains.kotlin.psi.*
+import org.jetbrains.kotlin.psi.psiUtil.getNonStrictParentOfType
+import org.jetbrains.kotlin.psi.psiUtil.getStrictParentOfType
+import org.jetbrains.kotlin.psi.psiUtil.isSingleQuoted
 
 public class KotlinEnterHandler: EnterHandlerDelegateAdapter() {
     companion object {
@@ -50,6 +52,11 @@ public class KotlinEnterHandler: EnterHandlerDelegateAdapter() {
             originalHandler: EditorActionHandler?
     ): EnterHandlerDelegate.Result? {
         if (file !is JetFile) return EnterHandlerDelegate.Result.Continue
+
+        if (preprocessEnterInStringLiteral(file, editor, caretOffsetRef, caretAdvance)) {
+            return EnterHandlerDelegate.Result.DefaultForceIndent
+        }
+
         if (!CodeInsightSettings.getInstance()!!.SMART_INDENT_ON_ENTER) return EnterHandlerDelegate.Result.Continue
 
         val document = editor.getDocument()
@@ -84,4 +91,36 @@ public class KotlinEnterHandler: EnterHandlerDelegateAdapter() {
 
         return EnterHandlerDelegate.Result.Continue
     }
+
+    // We can't use the core platform logic (EnterInStringLiteralHandler) because it assumes that the string
+    // is a single token and the first character of the token is an opening quote. In the case of Kotlin,
+    // the opening quote is a separate token and the first character of the string token is just a random letter.
+    private fun preprocessEnterInStringLiteral(psiFile: PsiFile,
+                                               editor: Editor,
+                                               caretOffsetRef: Ref<Int>,
+                                               caretAdvanceRef: Ref<Int>): Boolean {
+        var caretOffset = caretOffsetRef.get()
+        val psiAtOffset = psiFile.findElementAt(caretOffset) ?: return false
+        val stringTemplate = psiAtOffset.getStrictParentOfType<JetStringTemplateExpression>() ?: return false
+        if (!stringTemplate.isSingleQuoted()) return false
+        val tokenType = psiAtOffset.getNode().getElementType()
+        when (tokenType) {
+            JetTokens.CLOSING_QUOTE, JetTokens.REGULAR_STRING_PART, JetTokens.ESCAPE_SEQUENCE,
+            JetTokens.SHORT_TEMPLATE_ENTRY_START, JetTokens.LONG_TEMPLATE_ENTRY_START -> {
+                val doc = editor.getDocument()
+                var caretAdvance = 1
+                if (stringTemplate.getParent() is JetDotQualifiedExpression) {
+                    doc.insertString(stringTemplate.getTextRange().getEndOffset(), ")")
+                    doc.insertString(stringTemplate.getTextRange().getStartOffset(), "(")
+                    caretOffset++
+                    caretAdvance++
+                }
+                doc.insertString(caretOffset, "\" + \"")
+                caretOffsetRef.set(caretOffset + 3)
+                caretAdvanceRef.set(caretAdvance)
+                return true
+            }
+        }
+        return false
+    }
 }
diff --git a/idea/src/org/jetbrains/kotlin/idea/editor/KotlinQuoteHandler.kt b/idea/src/org/jetbrains/kotlin/idea/editor/KotlinQuoteHandler.kt
index 6d662257aa7..17e1c0d4503 100644
--- a/idea/src/org/jetbrains/kotlin/idea/editor/KotlinQuoteHandler.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/editor/KotlinQuoteHandler.kt
@@ -53,6 +53,11 @@ public class KotlinQuoteHandler : QuoteHandler {
 
     override fun isInsideLiteral(iterator: HighlighterIterator): Boolean {
         val tokenType = iterator.getTokenType()
-        return tokenType == JetTokens.REGULAR_STRING_PART || tokenType == JetTokens.OPEN_QUOTE || tokenType == JetTokens.CLOSING_QUOTE || tokenType == JetTokens.SHORT_TEMPLATE_ENTRY_START || tokenType == JetTokens.LONG_TEMPLATE_ENTRY_END || tokenType == JetTokens.LONG_TEMPLATE_ENTRY_START
+        return tokenType == JetTokens.REGULAR_STRING_PART ||
+               tokenType == JetTokens.OPEN_QUOTE ||
+               tokenType == JetTokens.CLOSING_QUOTE ||
+               tokenType == JetTokens.SHORT_TEMPLATE_ENTRY_START ||
+               tokenType == JetTokens.LONG_TEMPLATE_ENTRY_END ||
+               tokenType == JetTokens.LONG_TEMPLATE_ENTRY_START
     }
 }
diff --git a/idea/tests/org/jetbrains/kotlin/idea/editor/TypedHandlerTest.kt b/idea/tests/org/jetbrains/kotlin/idea/editor/TypedHandlerTest.kt
index e0d80e6a61f..427eb33278e 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/editor/TypedHandlerTest.kt
+++ b/idea/tests/org/jetbrains/kotlin/idea/editor/TypedHandlerTest.kt
@@ -234,6 +234,54 @@ public class TypedHandlerTest : LightCodeInsightTestCase() {
             """fun f() { val a = f(<caret>) }"""
     )
 
+    public fun testSplitStringByEnter(): Unit = doCharTypeTest(
+            '\n',
+            """val s = "foo<caret>bar"""",
+            "val s = \"foo\" +\n" +
+            "        \"bar\""
+    )
+
+    public fun testSplitStringByEnter_Empty(): Unit = doCharTypeTest(
+            '\n',
+            """val s = "<caret>"""",
+            "val s = \"\" +\n" +
+            "        \"\""
+    )
+
+    public fun testSplitStringByEnter_BeforeEscapeSequence(): Unit = doCharTypeTest(
+            '\n',
+            """val s = "foo<caret>\nbar"""",
+            "val s = \"foo\" +\n" +
+            "        \"\\nbar\""
+    )
+
+    public fun testSplitStringByEnter_BeforeSubstitution(): Unit = doCharTypeTest(
+            '\n',
+            """val s = "foo<caret>${amp}bar"""",
+            "val s = \"foo\" +\n" +
+            "        \"${amp}bar\""
+    )
+
+    public fun testSplitStringByEnter_AddParentheses(): Unit = doCharTypeTest(
+            '\n',
+            """val l = "foo<caret>bar".length()""",
+            "val l = (\"foo\" +\n" +
+            "        \"bar\").length()"
+    )
+
+    public fun testSplitStringByEnter_ExistingParentheses(): Unit = doCharTypeTest(
+            '\n',
+            """val l = ("asdf" + "foo<caret>bar").length()""",
+            "val l = (\"asdf\" + \"foo\" +\n" +
+            "        \"bar\").length()"
+    )
+
+    public fun testSplitStringByEnter_TripleQuotedString(): Unit = doCharTypeTest(
+            '\n',
+            "val l = \"\"\"foo<caret>bar\"\"\"",
+            "val l = \"\"\"foo\nbar\"\"\""
+    )
+
     public fun testTypeLtInFunDeclaration() {
         doLtGtTest("fun <caret>")
     }