diff --git a/compiler/testData/codegen/box/coroutines/controlFlow/finallyCatch.kt b/compiler/testData/codegen/box/coroutines/controlFlow/finallyCatch.kt
index 94399889ec4..6ebc6152f76 100644
--- a/compiler/testData/codegen/box/coroutines/controlFlow/finallyCatch.kt
+++ b/compiler/testData/codegen/box/coroutines/controlFlow/finallyCatch.kt
@@ -1,4 +1,3 @@
-// IGNORE_BACKEND: JS
 // IGNORE_BACKEND: JVM_IR
 // WITH_RUNTIME
 // WITH_COROUTINES
diff --git a/compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt b/compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt
new file mode 100644
index 00000000000..493c35c2577
--- /dev/null
+++ b/compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt
@@ -0,0 +1,43 @@
+// IGNORE_BACKEND: JVM_IR
+// WITH_RUNTIME
+// WITH_COROUTINES
+// COMMON_COROUTINES_TEST
+import helpers.*
+import COROUTINES_PACKAGE.*
+import COROUTINES_PACKAGE.intrinsics.*
+
+// Note: This test for issue KT-28207 about infinite loop after throwing exception from finally block
+
+suspend fun throwHere(): Nothing = throw RuntimeException("Do not catch me")
+
+fun builder(c: suspend () -> Unit) {
+    c.startCoroutine(EmptyContinuation)
+}
+
+fun box(): String {
+    var result = ""
+
+    var count = 0
+    try {
+        builder {
+            try {
+                throwHere()
+                count = 1
+            } finally {
+                if (count == 0) {
+                    count = 2
+                    result = "O"
+                    throw Exception("K")
+                } else if (count == 2) {
+                    result = "FAIL: execution gets into infinite loop"
+                } else {
+                    result = "FAIL: exception has not been thrown"
+                }
+            }
+        }
+    } catch (x: Exception) {
+        result += x.message
+    }
+
+    return result
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt b/compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt
new file mode 100644
index 00000000000..ff27422583a
--- /dev/null
+++ b/compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt
@@ -0,0 +1,52 @@
+// IGNORE_BACKEND: JVM_IR
+// WITH_RUNTIME
+// WITH_COROUTINES
+// COMMON_COROUTINES_TEST
+import helpers.*
+import COROUTINES_PACKAGE.*
+import COROUTINES_PACKAGE.intrinsics.*
+
+// Note: This test for issue KT-28207 about infinite loop after throwing exception from finally block
+
+var resume: () -> Unit = {}
+
+suspend fun suspendHere(): String = suspendCoroutineUninterceptedOrReturn { cont ->
+    resume = {
+        cont.resumeWithException(RuntimeException("Do not catch me"))
+    }
+    COROUTINE_SUSPENDED
+}
+
+fun builder(c: suspend () -> Unit) {
+    c.startCoroutine(EmptyContinuation)
+}
+
+fun box(): String {
+    var result = ""
+
+    var count = 0
+    try {
+        builder {
+            try {
+                suspendHere()
+                count = 1
+            } finally {
+                if (count == 0) {
+                    count = 2
+                    result = "O"
+                    throw Exception("K")
+                } else if (count == 2) {
+                    result = "FAIL: execution gets into infinite loop"
+                } else {
+                    result = "FAIL: exception has not been thrown"
+                }
+            }
+        }
+        resume()
+    } catch (x: Exception) {
+        result += x.message
+    }
+
+
+    return result
+}
\ No newline at end of file
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index 43fbc63565d..6382392ece1 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -7623,6 +7623,26 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/inlineSuspendFunction.kt", "kotlin.coroutines");
             }
 
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines");
+            }
+
             @TestMetadata("simple.kt")
             public void testSimple_1_2() throws Exception {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/simple.kt", "kotlin.coroutines.experimental");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
index f02f0a1b02a..2e3959f0453 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
@@ -7623,6 +7623,26 @@ public class LightAnalysisModeTestGenerated extends AbstractLightAnalysisModeTes
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/inlineSuspendFunction.kt", "kotlin.coroutines");
             }
 
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines");
+            }
+
             @TestMetadata("simple.kt")
             public void testSimple_1_2() throws Exception {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/simple.kt", "kotlin.coroutines.experimental");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
index 725fbc275cf..af8d266a4bd 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
@@ -7623,6 +7623,26 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/inlineSuspendFunction.kt", "kotlin.coroutines");
             }
 
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines");
+            }
+
             @TestMetadata("simple.kt")
             public void testSimple_1_2() throws Exception {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/simple.kt", "kotlin.coroutines.experimental");
diff --git a/js/js.inliner/src/org/jetbrains/kotlin/js/coroutine/CoroutineBodyTransformer.kt b/js/js.inliner/src/org/jetbrains/kotlin/js/coroutine/CoroutineBodyTransformer.kt
index f7d34b2a4f0..2f1534c0f84 100644
--- a/js/js.inliner/src/org/jetbrains/kotlin/js/coroutine/CoroutineBodyTransformer.kt
+++ b/js/js.inliner/src/org/jetbrains/kotlin/js/coroutine/CoroutineBodyTransformer.kt
@@ -295,6 +295,7 @@ class CoroutineBodyTransformer(private val context: CoroutineTransformationConte
         // Handle finally node
         if (finallyNode != null) {
             currentBlock = finallyBlock
+            currentStatements += exceptionState(oldCatchBlock, x)
             finallyNode.statements.forEach { it.accept(this) }
             generateFinallyExit()
             hasFinallyBlocks = true
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/IrJsCodegenBoxTestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/IrJsCodegenBoxTestGenerated.java
index 957eab89383..c53bbfe5e06 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/IrJsCodegenBoxTestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/IrJsCodegenBoxTestGenerated.java
@@ -6373,6 +6373,16 @@ public class IrJsCodegenBoxTestGenerated extends AbstractIrJsCodegenBoxTest {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/inlineSuspendFunction.kt", "kotlin.coroutines");
             }
 
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines");
+            }
+
             @TestMetadata("simple.kt")
             public void testSimple_1_3() throws Exception {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/simple.kt", "kotlin.coroutines");
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 db1bc3b73be..057c14c666e 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
@@ -7223,6 +7223,26 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/inlineSuspendFunction.kt", "kotlin.coroutines");
             }
 
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinallyWithSuspension.kt")
+            public void testRethrowInFinallyWithSuspension_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinallyWithSuspension.kt", "kotlin.coroutines");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_2() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines.experimental");
+            }
+
+            @TestMetadata("rethrowInFinally.kt")
+            public void testRethrowInFinally_1_3() throws Exception {
+                runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/rethrowInFinally.kt", "kotlin.coroutines");
+            }
+
             @TestMetadata("simple.kt")
             public void testSimple_1_2() throws Exception {
                 runTestWithPackageReplacement("compiler/testData/codegen/box/coroutines/stackUnwinding/simple.kt", "kotlin.coroutines.experimental");