diff --git a/compiler/testData/builtin-classes.txt b/compiler/testData/builtin-classes.txt
index d03c764dfbc..4719ad693b9 100644
--- a/compiler/testData/builtin-classes.txt
+++ b/compiler/testData/builtin-classes.txt
@@ -762,6 +762,42 @@ public trait Function9</*0*/ in P1, /*1*/ in P2, /*2*/ in P3, /*3*/ in P4, /*4*/
     public abstract fun invoke(/*0*/ p1: P1, /*1*/ p2: P2, /*2*/ p3: P3, /*3*/ p4: P4, /*4*/ p5: P5, /*5*/ p6: P6, /*6*/ p7: P7, /*7*/ p8: P8, /*8*/ p9: P9): R
 }
 
+public final enum class InlineOption : kotlin.Enum<kotlin.InlineOption> {
+    /*primary*/ private constructor InlineOption()
+    public final override /*1*/ /*fake_override*/ fun name(): kotlin.String
+    public final override /*1*/ /*fake_override*/ fun ordinal(): kotlin.Int
+
+    public class object <class-object-for-InlineOption> {
+        /*primary*/ private constructor <class-object-for-InlineOption>()
+        public final /*synthesized*/ fun valueOf(/*0*/ value: kotlin.String): kotlin.InlineOption
+        public final /*synthesized*/ fun values(): kotlin.Array<kotlin.InlineOption>
+    }
+
+    public enum entry LOCAL_CONTINUE_AND_BREAK : kotlin.InlineOption {
+        /*primary*/ private constructor LOCAL_CONTINUE_AND_BREAK()
+        public final override /*1*/ /*fake_override*/ fun name(): kotlin.String
+        public final override /*1*/ /*fake_override*/ fun ordinal(): kotlin.Int
+
+        public class object <class-object-for-LOCAL_CONTINUE_AND_BREAK> : kotlin.InlineOption.LOCAL_CONTINUE_AND_BREAK {
+            /*primary*/ private constructor <class-object-for-LOCAL_CONTINUE_AND_BREAK>()
+            public final override /*1*/ /*fake_override*/ fun name(): kotlin.String
+            public final override /*1*/ /*fake_override*/ fun ordinal(): kotlin.Int
+        }
+    }
+
+    public enum entry ONLY_LOCAL_RETURN : kotlin.InlineOption {
+        /*primary*/ private constructor ONLY_LOCAL_RETURN()
+        public final override /*1*/ /*fake_override*/ fun name(): kotlin.String
+        public final override /*1*/ /*fake_override*/ fun ordinal(): kotlin.Int
+
+        public class object <class-object-for-ONLY_LOCAL_RETURN> : kotlin.InlineOption.ONLY_LOCAL_RETURN {
+            /*primary*/ private constructor <class-object-for-ONLY_LOCAL_RETURN>()
+            public final override /*1*/ /*fake_override*/ fun name(): kotlin.String
+            public final override /*1*/ /*fake_override*/ fun ordinal(): kotlin.Int
+        }
+    }
+}
+
 public final enum class InlineStrategy : kotlin.Enum<kotlin.InlineStrategy> {
     /*primary*/ private constructor InlineStrategy()
     public final override /*1*/ /*fake_override*/ fun name(): kotlin.String
@@ -1440,6 +1476,12 @@ public final annotation class inline : kotlin.Annotation {
         public final fun <get-strategy>(): kotlin.InlineStrategy
 }
 
+public final annotation class inlineOptions : kotlin.Annotation {
+    /*primary*/ public constructor inlineOptions(/*0*/ vararg value: kotlin.InlineOption /*kotlin.Array<kotlin.InlineOption>*/)
+    internal final val value: kotlin.Array<kotlin.InlineOption>
+        internal final fun <get-value>(): kotlin.Array<kotlin.InlineOption>
+}
+
 public final annotation class noinline : kotlin.Annotation {
     /*primary*/ public constructor noinline()
 }
diff --git a/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSite.2.kt b/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSite.2.kt
index 9a811742b29..1e63a0de218 100644
--- a/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSite.2.kt
+++ b/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSite.2.kt
@@ -1,5 +1,7 @@
 package test
 
+import kotlin.InlineOption.*
+
 abstract class A<R> {
     abstract fun getO() : R
 
@@ -8,7 +10,7 @@ abstract class A<R> {
     abstract fun getParam() : R
 }
 
-inline fun <R> doWork(jobO: ()-> R, jobK: ()-> R, param: R) : A<R> {
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) jobO: ()-> R, inlineOptions(ONLY_LOCAL_RETURN) jobK: ()-> R, param: R) : A<R> {
     val s = object : A<R>() {
 
         override fun getO(): R {
@@ -25,7 +27,7 @@ inline fun <R> doWork(jobO: ()-> R, jobK: ()-> R, param: R) : A<R> {
     return s;
 }
 
-inline fun <R> doWorkInConstructor(jobO: ()-> R, jobK: ()-> R, param: R) : A<R> {
+inline fun <R> doWorkInConstructor(inlineOptions(ONLY_LOCAL_RETURN) jobO: ()-> R, inlineOptions(ONLY_LOCAL_RETURN) jobK: ()-> R, param: R) : A<R> {
     val s = object : A<R>() {
 
         val p = param;
diff --git a/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSiteSuperParams.2.kt b/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSiteSuperParams.2.kt
index 5c7af7ad686..60aec4858bb 100644
--- a/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSiteSuperParams.2.kt
+++ b/compiler/testData/codegen/boxInline/anonymousObject/anonymousObjectOnDeclarationSiteSuperParams.2.kt
@@ -1,12 +1,14 @@
 package test
 
+import kotlin.InlineOption.*
+
 abstract class A<R>(val param : R) {
     abstract fun getO() : R
 
     abstract fun getK() : R
 }
 
-inline fun <R> doWork(jobO: ()-> R, jobK: ()-> R, param: R) : A<R> {
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) jobO: ()-> R, inlineOptions(ONLY_LOCAL_RETURN) jobK: ()-> R, param: R) : A<R> {
     val s = object : A<R>(param) {
 
         override fun getO(): R {
@@ -19,7 +21,7 @@ inline fun <R> doWork(jobO: ()-> R, jobK: ()-> R, param: R) : A<R> {
     return s;
 }
 
-inline fun <R> doWorkInConstructor(jobO: ()-> R, jobK: ()-> R, param: () -> R) : A<R> {
+inline fun <R> doWorkInConstructor(inlineOptions(ONLY_LOCAL_RETURN) jobO: ()-> R, inlineOptions(ONLY_LOCAL_RETURN) jobK: ()-> R, inlineOptions(ONLY_LOCAL_RETURN) param: () -> R) : A<R> {
     val s = object : A<R>(param()) {
         val o1 = jobO()
 
diff --git a/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.1.kt b/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.1.kt
index 0c4eb3d1ba0..8a29493b425 100644
--- a/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.1.kt
+++ b/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.1.kt
@@ -1,4 +1,5 @@
 import builders.*
+import kotlin.InlineOption.*
 
 inline fun testAllInline(f: () -> String) : String {
     val args = array("1", "2", "3")
@@ -40,7 +41,7 @@ inline fun testAllInline(f: () -> String) : String {
     return result.toString()!!
 }
 
-inline fun testHtmlNoInline(f: () -> String) : String {
+inline fun testHtmlNoInline(inlineOptions(ONLY_LOCAL_RETURN) f: () -> String) : String {
     val args = array("1", "2", "3")
     val result =
             htmlNoInline() {
@@ -80,7 +81,7 @@ inline fun testHtmlNoInline(f: () -> String) : String {
     return result.toString()!!
 }
 
-inline fun testBodyNoInline(f: () -> String) : String {
+inline fun testBodyNoInline(inlineOptions(ONLY_LOCAL_RETURN) f: () -> String) : String {
     val args = array("1", "2", "3")
     val result =
             html {
@@ -120,7 +121,7 @@ inline fun testBodyNoInline(f: () -> String) : String {
     return result.toString()!!
 }
 
-inline fun testBodyHtmlNoInline(f: () -> String) : String {
+inline fun testBodyHtmlNoInline(inlineOptions(ONLY_LOCAL_RETURN) f: () -> String) : String {
     val args = array("1", "2", "3")
     val result =
             htmlNoInline {
diff --git a/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.2.kt b/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.2.kt
index f2c29052b97..c19b0284c3b 100644
--- a/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.2.kt
+++ b/compiler/testData/codegen/boxInline/builders/buildersAndLambdaCapturing.2.kt
@@ -69,7 +69,7 @@ class Title() : TagWithText("title")
 abstract class BodyTag(name: String) : TagWithText(name) {
     inline fun b(init: B.() -> Unit) = initTag(B(), init)
     inline fun p(init: P.() -> Unit) = initTag(P(), init)
-    inline fun pNoInline(init: P.() -> Unit) = initTag(P(), init)
+    fun pNoInline(init: P.() -> Unit) = initTag(P(), init)
     inline fun h1(init: H1.() -> Unit) = initTag(H1(), init)
     inline fun ul(init: UL.() -> Unit) = initTag(UL(), init)
     inline fun a(href: String, init: A.() -> Unit) {
diff --git a/compiler/testData/codegen/boxInline/capture/captureInlinable.2.kt b/compiler/testData/codegen/boxInline/capture/captureInlinable.2.kt
index 8d35830e78b..469f479423c 100644
--- a/compiler/testData/codegen/boxInline/capture/captureInlinable.2.kt
+++ b/compiler/testData/codegen/boxInline/capture/captureInlinable.2.kt
@@ -1,6 +1,8 @@
 package test
 
-inline fun <R> doWork(job: ()-> R) : R {
+import kotlin.InlineOption.*
+
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) job: ()-> R) : R {
     return notInline({job()})
 }
 
diff --git a/compiler/testData/codegen/boxInline/capture/captureInlinableAndOther.2.kt b/compiler/testData/codegen/boxInline/capture/captureInlinableAndOther.2.kt
index 513e63606c4..be7716e8776 100644
--- a/compiler/testData/codegen/boxInline/capture/captureInlinableAndOther.2.kt
+++ b/compiler/testData/codegen/boxInline/capture/captureInlinableAndOther.2.kt
@@ -1,6 +1,8 @@
 package test
 
-inline fun <R> doWork(job: ()-> R) : R {
+import kotlin.InlineOption.*
+
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) job: ()-> R) : R {
     val k = 10;
     return notInline({k; job()})
 }
diff --git a/compiler/testData/codegen/boxInline/complex/with.2.kt b/compiler/testData/codegen/boxInline/complex/with.2.kt
index f0746c03958..0684df6c177 100644
--- a/compiler/testData/codegen/boxInline/complex/with.2.kt
+++ b/compiler/testData/codegen/boxInline/complex/with.2.kt
@@ -1,5 +1,7 @@
 package test
 
+import kotlin.InlineOption.*
+
 public class Data()
 
 public class Input(val d: Data) : Closeable {
@@ -27,4 +29,4 @@ public fun Input.copyTo(output: Output, size: Int): Long {
 }
 
 
-public inline fun with2<T>(receiver : T, body :  T.() -> Unit) : Unit = {receiver.body()}()
+public inline fun with2<T>(receiver : T, inlineOptions(ONLY_LOCAL_RETURN) body :  T.() -> Unit) : Unit = {receiver.body()}()
diff --git a/compiler/testData/codegen/boxInline/lambdaClassClash/lambdaClassClash.2.kt b/compiler/testData/codegen/boxInline/lambdaClassClash/lambdaClassClash.2.kt
index 76f1b12511f..4821ce2eca4 100644
--- a/compiler/testData/codegen/boxInline/lambdaClassClash/lambdaClassClash.2.kt
+++ b/compiler/testData/codegen/boxInline/lambdaClassClash/lambdaClassClash.2.kt
@@ -1,6 +1,8 @@
 package zzz
 
-inline fun calc(lambda: () -> Int): Int {
+import kotlin.InlineOption.*
+
+inline fun calc(inlineOptions(ONLY_LOCAL_RETURN) lambda: () -> Int): Int {
     return doCalc { lambda() }
 }
 
diff --git a/compiler/testData/codegen/boxInline/lambdaTransformation/lambdaInLambdaNoInline.1.kt b/compiler/testData/codegen/boxInline/lambdaTransformation/lambdaInLambdaNoInline.1.kt
index 5b87bb844e2..40c19f1c1e6 100644
--- a/compiler/testData/codegen/boxInline/lambdaTransformation/lambdaInLambdaNoInline.1.kt
+++ b/compiler/testData/codegen/boxInline/lambdaTransformation/lambdaInLambdaNoInline.1.kt
@@ -1,5 +1,7 @@
 import test.*
 
+import kotlin.InlineOption.*
+
 fun test1(param: String): String {
     var result = "fail1"
     noInlineFun(param) { a ->
@@ -22,7 +24,7 @@ fun test11(param: String): String {
     return result
 }
 
-inline fun test2(param: () -> String): String {
+inline fun test2(inlineOptions(ONLY_LOCAL_RETURN) param: () -> String): String {
     var result = "fail1"
     noInlineFun("stub") { a ->
         concat(param()) {
@@ -33,7 +35,7 @@ inline fun test2(param: () -> String): String {
     return result
 }
 
-inline fun test22(param: () -> String): String {
+inline fun test22(inlineOptions(ONLY_LOCAL_RETURN) param: () -> String): String {
     var result = "fail1"
     {{result = param()}()}()
 
diff --git a/compiler/testData/codegen/boxInline/lambdaTransformation/regeneratedLambdaName.2.kt b/compiler/testData/codegen/boxInline/lambdaTransformation/regeneratedLambdaName.2.kt
index f063e5ec7e7..4a4786abaec 100644
--- a/compiler/testData/codegen/boxInline/lambdaTransformation/regeneratedLambdaName.2.kt
+++ b/compiler/testData/codegen/boxInline/lambdaTransformation/regeneratedLambdaName.2.kt
@@ -1,5 +1,7 @@
 package test
 
-inline fun <R> call(f: () -> R) : R {
+import kotlin.InlineOption.*
+
+inline fun <R> call(inlineOptions(ONLY_LOCAL_RETURN) f: () -> R) : R {
     return {f()} ()
 }
diff --git a/compiler/testData/codegen/boxInline/lambdaTransformation/sameCaptured.2.kt b/compiler/testData/codegen/boxInline/lambdaTransformation/sameCaptured.2.kt
index c9c21a55892..a9907ead483 100644
--- a/compiler/testData/codegen/boxInline/lambdaTransformation/sameCaptured.2.kt
+++ b/compiler/testData/codegen/boxInline/lambdaTransformation/sameCaptured.2.kt
@@ -1,11 +1,13 @@
 package test
 
-inline fun <R> doWork(job: ()-> R) : R {
+import kotlin.InlineOption.*
+
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) job: ()-> R) : R {
     val k = 10;
     return notInline({k; job()})
 }
 
-inline fun <R> doWork(job: ()-> R, job2: () -> R) : R {
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) job: ()-> R, inlineOptions(ONLY_LOCAL_RETURN) job2: () -> R) : R {
     val k = 10;
     return notInline({k; job(); job2()})
 }
diff --git a/compiler/testData/codegen/boxInline/noInline/noInlineLambdaChainWithCapturedInline.1.kt b/compiler/testData/codegen/boxInline/noInline/noInlineLambdaChainWithCapturedInline.1.kt
index 2c24fa025ff..6c67851060d 100644
--- a/compiler/testData/codegen/boxInline/noInline/noInlineLambdaChainWithCapturedInline.1.kt
+++ b/compiler/testData/codegen/boxInline/noInline/noInlineLambdaChainWithCapturedInline.1.kt
@@ -1,6 +1,8 @@
 import test.*
 
-inline fun test1(param: () -> String): String {
+import kotlin.InlineOption.*
+
+inline fun test1(inlineOptions(ONLY_LOCAL_RETURN) param: () -> String): String {
     var result = "fail"
     inlineFun("1")  { c ->
         {
@@ -18,7 +20,7 @@ inline fun test1(param: () -> String): String {
 }
 
 
-inline fun test2(param: () -> String): String {
+inline fun test2(inlineOptions(ONLY_LOCAL_RETURN) param: () -> String): String {
     var result = "fail"
     inlineFun("2") { a ->
         {
@@ -31,7 +33,7 @@ inline fun test2(param: () -> String): String {
     return result
 }
 
-inline fun test3(param: () -> String): String {
+inline fun test3(inlineOptions(ONLY_LOCAL_RETURN) param: () -> String): String {
     var result = "fail"
     inlineFun("2") { d ->
         inlineFun("1") { c ->
diff --git a/compiler/testData/codegen/boxInline/simple/rootConstructor.2.kt b/compiler/testData/codegen/boxInline/simple/rootConstructor.2.kt
index 8d35830e78b..469f479423c 100644
--- a/compiler/testData/codegen/boxInline/simple/rootConstructor.2.kt
+++ b/compiler/testData/codegen/boxInline/simple/rootConstructor.2.kt
@@ -1,6 +1,8 @@
 package test
 
-inline fun <R> doWork(job: ()-> R) : R {
+import kotlin.InlineOption.*
+
+inline fun <R> doWork(inlineOptions(ONLY_LOCAL_RETURN) job: ()-> R) : R {
     return notInline({job()})
 }
 
diff --git a/compiler/testData/codegen/outerClassInfo/inlineLambda.kt b/compiler/testData/codegen/outerClassInfo/inlineLambda.kt
index 9b62696451a..15c982629b8 100644
--- a/compiler/testData/codegen/outerClassInfo/inlineLambda.kt
+++ b/compiler/testData/codegen/outerClassInfo/inlineLambda.kt
@@ -1,8 +1,10 @@
 package foo;
 
+import kotlin.InlineOption.*
+
 class Foo {
 
-    inline fun inlineFoo(s: () -> Unit) {
+    inline fun inlineFoo(inlineOptions(ONLY_LOCAL_RETURN) s: () -> Unit) {
         {
             s()
         }()
diff --git a/compiler/testData/codegen/outerClassInfo/inlineObject.kt b/compiler/testData/codegen/outerClassInfo/inlineObject.kt
index 59f7260e5af..baa6dacfcff 100644
--- a/compiler/testData/codegen/outerClassInfo/inlineObject.kt
+++ b/compiler/testData/codegen/outerClassInfo/inlineObject.kt
@@ -1,8 +1,10 @@
 package foo;
 
+import kotlin.InlineOption.*
+
 class Foo {
 
-    inline fun inlineFoo(s: () -> Unit) {
+    inline fun inlineFoo(inlineOptions(ONLY_LOCAL_RETURN) s: () -> Unit) {
         val localObject = object {
             fun run() {
                 s()
diff --git a/compiler/testData/diagnostics/tests/inline/anonymousObjects.kt b/compiler/testData/diagnostics/tests/inline/anonymousObjects.kt
index 126946fb0bd..af6c62677c6 100644
--- a/compiler/testData/diagnostics/tests/inline/anonymousObjects.kt
+++ b/compiler/testData/diagnostics/tests/inline/anonymousObjects.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -NON_LOCAL_RETURN_NOT_ALLOWED
 
 inline fun <R> inlineFun(p: () -> R) {
     val s = object {
diff --git a/compiler/testData/diagnostics/tests/inline/binaryExpressions/assignment.kt b/compiler/testData/diagnostics/tests/inline/binaryExpressions/assignment.kt
index f10bd226d96..8ea305e5521 100644
--- a/compiler/testData/diagnostics/tests/inline/binaryExpressions/assignment.kt
+++ b/compiler/testData/diagnostics/tests/inline/binaryExpressions/assignment.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE -ONLY_LOCAL_RETURN
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -ASSIGNED_BUT_NEVER_ACCESSED_VARIABLE -UNUSED_VALUE -NON_LOCAL_RETURN_NOT_ALLOWED
 
 fun <T, U> Function1<T, U>.minusAssign(p: Function1<T, U>) {}
 
diff --git a/compiler/testData/diagnostics/tests/inline/capture.kt b/compiler/testData/diagnostics/tests/inline/capture.kt
index 5b821c1407c..55bd44aa557 100644
--- a/compiler/testData/diagnostics/tests/inline/capture.kt
+++ b/compiler/testData/diagnostics/tests/inline/capture.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -NON_LOCAL_RETURN_NOT_ALLOWED
 
 fun Function1<Int, Unit>.noInlineExt(p: Int) {}
 
diff --git a/compiler/testData/diagnostics/tests/inline/propagation.kt b/compiler/testData/diagnostics/tests/inline/propagation.kt
index 658dede57d4..c994f4a92cd 100644
--- a/compiler/testData/diagnostics/tests/inline/propagation.kt
+++ b/compiler/testData/diagnostics/tests/inline/propagation.kt
@@ -1,4 +1,4 @@
-// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE
+// !DIAGNOSTICS: -UNUSED_EXPRESSION -UNUSED_PARAMETER -UNUSED_VARIABLE -NOTHING_TO_INLINE -NON_LOCAL_RETURN_NOT_ALLOWED
 
 inline fun inlineFunWithInvoke(s: (p: Int) -> Unit, ext: Int.(p: Int) -> Unit) {
     subInline(s, ext)
diff --git a/compiler/testData/diagnostics/tests/inline/sam.kt b/compiler/testData/diagnostics/tests/inline/sam.kt
index 5704f82ab31..6be31f27356 100644
--- a/compiler/testData/diagnostics/tests/inline/sam.kt
+++ b/compiler/testData/diagnostics/tests/inline/sam.kt
@@ -1,3 +1,4 @@
+// !DIAGNOSTICS: -NON_LOCAL_RETURN_NOT_ALLOWED
 // FILE: Run.java
 public interface Run {
     public int run();