diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/ExpressionCodegen.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/ExpressionCodegen.java
index 47490fb6436..65bc5ee9729 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/ExpressionCodegen.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/ExpressionCodegen.java
@@ -1086,11 +1086,15 @@ public class ExpressionCodegen extends KtVisitor<StackValue, StackValue> impleme
         }
 
         for (Map.Entry<DeclarationDescriptor, EnclosedValueDescriptor> entry : closure.getCaptureVariables().entrySet()) {
-            Type sharedVarType = typeMapper.getSharedVarType(entry.getKey());
+            DeclarationDescriptor declarationDescriptor = entry.getKey();
+            EnclosedValueDescriptor valueDescriptor = entry.getValue();
+
+            Type sharedVarType = typeMapper.getSharedVarType(declarationDescriptor);
+            boolean asSharedVar = sharedVarType != null;
             if (sharedVarType == null) {
-                sharedVarType = typeMapper.mapType((VariableDescriptor) entry.getKey());
+                sharedVarType = typeMapper.mapType((VariableDescriptor) declarationDescriptor);
             }
-            StackValue capturedVar = lookupOuterValue(entry.getValue());
+            StackValue capturedVar = lookupOuterValue(valueDescriptor, asSharedVar);
             callGenerator.putCapturedValueOnStack(capturedVar, sharedVarType, paramIndex++);
         }
 
@@ -1144,11 +1148,16 @@ public class ExpressionCodegen extends KtVisitor<StackValue, StackValue> impleme
     }
 
     @NotNull
-    public StackValue lookupOuterValue(EnclosedValueDescriptor d) {
+    private StackValue lookupOuterValue(EnclosedValueDescriptor d, boolean asSharedVar) {
         DeclarationDescriptor descriptor = d.getDescriptor();
         for (LocalLookup.LocalLookupCase aCase : LocalLookup.LocalLookupCase.values()) {
             if (aCase.isCase(descriptor)) {
-                return aCase.outerValue(d, this);
+                StackValue outerValue = aCase.outerValue(d, this);
+                if (asSharedVar && outerValue instanceof StackValue.FieldForSharedVar) {
+                    StackValue.FieldForSharedVar fieldForSharedVar = (StackValue.FieldForSharedVar) outerValue;
+                    return fieldForSharedVar.receiver;
+                }
+                return outerValue;
             }
         }
         throw new IllegalStateException("Can't get outer value in " + this + " for " + d);
diff --git a/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt b/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt
new file mode 100644
index 00000000000..2200b560d4a
--- /dev/null
+++ b/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt
@@ -0,0 +1,12 @@
+fun box(): String {
+    var x = ""
+
+    class CapturesX {
+        override fun toString() = x
+    }
+
+    fun localFun() = CapturesX()
+
+    x = "OK"
+    return localFun().toString()
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt b/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt
new file mode 100644
index 00000000000..b3553b16847
--- /dev/null
+++ b/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt
@@ -0,0 +1,15 @@
+fun box(): String {
+    var x = ""
+
+    class CapturesX {
+        override fun toString() = x
+    }
+
+    fun outerFun1(): CapturesX {
+        fun localFun() = CapturesX()
+        return localFun()
+    }
+
+    x = "OK"
+    return outerFun1().toString()
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt b/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt
new file mode 100644
index 00000000000..e15eba1b081
--- /dev/null
+++ b/compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt
@@ -0,0 +1,14 @@
+fun box(): String {
+    var x = ""
+
+    class CapturesX {
+        override fun toString() = x
+    }
+
+    class LocalClass {
+        fun foo() = CapturesX()
+    }
+
+    x = "OK"
+    return LocalClass().foo().toString()
+}
\ No newline at end of file
diff --git a/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java b/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
index 4596b1f4f51..7a091cc73c8 100644
--- a/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
+++ b/compiler/tests-ir-jvm/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
@@ -11306,6 +11306,24 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
             doTest(fileName);
         }
 
+        @TestMetadata("recaptureVarCapturedInLocalClass1.kt")
+        public void testRecaptureVarCapturedInLocalClass1() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass2.kt")
+        public void testRecaptureVarCapturedInLocalClass2() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass3.kt")
+        public void testRecaptureVarCapturedInLocalClass3() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("subclassingExtensionReceiverClass.kt")
         public void testSubclassingExtensionReceiverClass() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/subclassingExtensionReceiverClass.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index 55ff62ab07e..805f3a5bcc4 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -11306,6 +11306,24 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest(fileName);
         }
 
+        @TestMetadata("recaptureVarCapturedInLocalClass1.kt")
+        public void testRecaptureVarCapturedInLocalClass1() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass2.kt")
+        public void testRecaptureVarCapturedInLocalClass2() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass3.kt")
+        public void testRecaptureVarCapturedInLocalClass3() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("subclassingExtensionReceiverClass.kt")
         public void testSubclassingExtensionReceiverClass() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/subclassingExtensionReceiverClass.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
index 2a6c275aa94..b8d1dab7038 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
@@ -11318,6 +11318,24 @@ public class LightAnalysisModeTestGenerated extends AbstractLightAnalysisModeTes
             doTest(fileName);
         }
 
+        @TestMetadata("recaptureVarCapturedInLocalClass1.kt")
+        public void testRecaptureVarCapturedInLocalClass1() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass2.kt")
+        public void testRecaptureVarCapturedInLocalClass2() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass3.kt")
+        public void testRecaptureVarCapturedInLocalClass3() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("withclosure.kt")
         public void testWithclosure() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/withclosure.kt");
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
index 3937bd793c1..590b8cc498d 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
@@ -12512,6 +12512,24 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
             doTest(fileName);
         }
 
+        @TestMetadata("recaptureVarCapturedInLocalClass1.kt")
+        public void testRecaptureVarCapturedInLocalClass1() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass1.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass2.kt")
+        public void testRecaptureVarCapturedInLocalClass2() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass2.kt");
+            doTest(fileName);
+        }
+
+        @TestMetadata("recaptureVarCapturedInLocalClass3.kt")
+        public void testRecaptureVarCapturedInLocalClass3() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/recaptureVarCapturedInLocalClass3.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("subclassingExtensionReceiverClass.kt")
         public void testSubclassingExtensionReceiverClass() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/localClasses/subclassingExtensionReceiverClass.kt");