diff --git a/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java b/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java
index 63619edb647..fa5f3821021 100644
--- a/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java
+++ b/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java
@@ -18606,6 +18606,12 @@ public class FirBlackBoxCodegenTestGenerated extends AbstractFirBlackBoxCodegenT
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @Test
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @Test
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
diff --git a/compiler/ir/backend.jvm/src/org/jetbrains/kotlin/backend/jvm/lower/inlineclasses/MemoizedInlineClassReplacements.kt b/compiler/ir/backend.jvm/src/org/jetbrains/kotlin/backend/jvm/lower/inlineclasses/MemoizedInlineClassReplacements.kt
index 1c9b9acf730..fb03018cd91 100644
--- a/compiler/ir/backend.jvm/src/org/jetbrains/kotlin/backend/jvm/lower/inlineclasses/MemoizedInlineClassReplacements.kt
+++ b/compiler/ir/backend.jvm/src/org/jetbrains/kotlin/backend/jvm/lower/inlineclasses/MemoizedInlineClassReplacements.kt
@@ -57,11 +57,10 @@ class MemoizedInlineClassReplacements(
         storageManager.createMemoizedFunctionWithNullableValues {
             when {
                 // Don't mangle anonymous or synthetic functions
-                it.origin == IrDeclarationOrigin.LOCAL_FUNCTION_FOR_LAMBDA ||
+                (it.isLocal && it is IrSimpleFunction && it.overriddenSymbols.isEmpty()) ||
                         (it.origin == IrDeclarationOrigin.DELEGATED_PROPERTY_ACCESSOR && it.visibility == DescriptorVisibilities.LOCAL) ||
                         it.isStaticInlineClassReplacement ||
-                        it.origin.isSynthetic ||
-                        it.origin == IrDeclarationOrigin.ADAPTER_FOR_CALLABLE_REFERENCE ->
+                        it.origin.isSynthetic ->
                     null
 
                 it.isInlineClassFieldGetter ->
diff --git a/compiler/testData/codegen/box/inlineClasses/functionExpression.kt b/compiler/testData/codegen/box/inlineClasses/functionExpression.kt
new file mode 100644
index 00000000000..7c25bf4f986
--- /dev/null
+++ b/compiler/testData/codegen/box/inlineClasses/functionExpression.kt
@@ -0,0 +1,6 @@
+inline fun new(init: (Z) -> Unit): Z = Z(42)
+
+inline class Z(val value: Int)
+
+fun box(): String =
+    if (new(fun(z: Z) {}).value == 42) "OK" else "Fail"
diff --git a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/BlackBoxCodegenTestGenerated.java
index 6c63d0e1da8..c53e030adbf 100644
--- a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/BlackBoxCodegenTestGenerated.java
@@ -18474,6 +18474,12 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @Test
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @Test
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
diff --git a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/IrBlackBoxCodegenTestGenerated.java b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/IrBlackBoxCodegenTestGenerated.java
index 1d6bdb3ae02..a4f7bb0060a 100644
--- a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/IrBlackBoxCodegenTestGenerated.java
+++ b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/codegen/IrBlackBoxCodegenTestGenerated.java
@@ -18606,6 +18606,12 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @Test
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @Test
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
diff --git a/compiler/tests-gen/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java b/compiler/tests-gen/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
index 9d7b8fb78f7..125aa5f894b 100644
--- a/compiler/tests-gen/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
+++ b/compiler/tests-gen/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
@@ -15364,6 +15364,11 @@ public class LightAnalysisModeTestGenerated extends AbstractLightAnalysisModeTes
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
             runTest("compiler/testData/codegen/box/inlineClasses/genericInlineClassSynthMembers.kt");
diff --git a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java
index fac73c8d67b..04825cc2336 100644
--- a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java
+++ b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java
@@ -13383,6 +13383,11 @@ public class IrJsCodegenBoxES6TestGenerated extends AbstractIrJsCodegenBoxES6Tes
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
             runTest("compiler/testData/codegen/box/inlineClasses/genericInlineClassSynthMembers.kt");
diff --git a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java
index d03c2b67a21..dba2bb7227e 100644
--- a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java
+++ b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java
@@ -12789,6 +12789,11 @@ public class IrJsCodegenBoxTestGenerated extends AbstractIrJsCodegenBoxTest {
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
             runTest("compiler/testData/codegen/box/inlineClasses/genericInlineClassSynthMembers.kt");
diff --git a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
index 6352440e8b8..d7de67abab0 100644
--- a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
+++ b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
@@ -12854,6 +12854,11 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
             runTest("compiler/testData/codegen/box/inlineClasses/genericInlineClassSynthMembers.kt");
diff --git a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/wasm/semantics/IrCodegenBoxWasmTestGenerated.java b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/wasm/semantics/IrCodegenBoxWasmTestGenerated.java
index e74b2a51654..89f7738b314 100644
--- a/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/wasm/semantics/IrCodegenBoxWasmTestGenerated.java
+++ b/js/js.tests/tests-gen/org/jetbrains/kotlin/js/test/wasm/semantics/IrCodegenBoxWasmTestGenerated.java
@@ -6899,6 +6899,11 @@ public class IrCodegenBoxWasmTestGenerated extends AbstractIrCodegenBoxWasmTest
             runTest("compiler/testData/codegen/box/inlineClasses/fieldNameClash.kt");
         }
 
+        @TestMetadata("functionExpression.kt")
+        public void testFunctionExpression() throws Exception {
+            runTest("compiler/testData/codegen/box/inlineClasses/functionExpression.kt");
+        }
+
         @TestMetadata("genericInlineClassSynthMembers.kt")
         public void testGenericInlineClassSynthMembers() throws Exception {
             runTest("compiler/testData/codegen/box/inlineClasses/genericInlineClassSynthMembers.kt");