diff --git a/build.xml b/build.xml
index 8bfdcb0c50f..a564aadeafb 100644
--- a/build.xml
+++ b/build.xml
@@ -174,7 +174,7 @@
         <chmod dir="${kotlin-home}/bin" includes="*" perm="755"/>
     </target>
 
-    <target name="dist" depends="init,jarRT,copyKotlinJars,jarJDKHeaders,jarLang,jar,buildToolsJar"/>
+    <target name="dist" depends="init,copyKotlinJars,jar,buildToolsJar,jarJDKHeaders,jarRT,jarLang"/>
 
     <target name="doc" depends="dist"/>
 
diff --git a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java
index ccb75ede668..0f1aa136143 100644
--- a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java
+++ b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java
@@ -737,11 +737,11 @@ public class JavaDescriptorResolver {
                 typeParameterDescriptor.addUpperBound(JetStandardClasses.getNullableAnyType());
             }
             else if (referencedTypes.length == 1) {
-                typeParameterDescriptor.addUpperBound(semanticServices.getTypeTransformer().transformToType(referencedTypes[0], typeVariableByPsiResolver));
+                typeParameterDescriptor.addUpperBound(semanticServices.getTypeTransformer().transformToType(referencedTypes[0], JavaTypeTransformer.TypeUsage.UPPER_BOUND, typeVariableByPsiResolver));
             }
             else {
                 for (PsiClassType referencedType : referencedTypes) {
-                    typeParameterDescriptor.addUpperBound(semanticServices.getTypeTransformer().transformToType(referencedType, typeVariableByPsiResolver));
+                    typeParameterDescriptor.addUpperBound(semanticServices.getTypeTransformer().transformToType(referencedType, JavaTypeTransformer.TypeUsage.UPPER_BOUND, typeVariableByPsiResolver));
                 }
             }
         }
diff --git a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaTypeTransformer.java b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaTypeTransformer.java
index 4ae8fbafcca..c1aa87085a1 100644
--- a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaTypeTransformer.java
+++ b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaTypeTransformer.java
@@ -80,12 +80,12 @@ public class JavaTypeTransformer {
 
                 PsiType bound = wildcardType.getBound();
                 assert bound != null;
-                return new TypeProjection(variance, transformToType(bound, typeVariableByPsiResolver));
+                return new TypeProjection(variance, transformToType(bound, TypeUsage.UPPER_BOUND, typeVariableByPsiResolver));
             }
 
             @Override
             public TypeProjection visitType(PsiType type) {
-                return new TypeProjection(transformToType(type, typeVariableByPsiResolver));
+                return new TypeProjection(transformToType(type, TypeUsage.TYPE_ARGUMENT, typeVariableByPsiResolver));
             }
         });
         return result;
@@ -106,6 +106,12 @@ public class JavaTypeTransformer {
 
     @NotNull
     public JetType transformToType(@NotNull PsiType javaType,
+                                   @NotNull final TypeVariableResolver typeVariableResolver) {
+        return transformToType(javaType, TypeUsage.MEMBER_SIGNATURE_INVARIANT, typeVariableResolver);
+    }
+
+    @NotNull
+    public JetType transformToType(@NotNull PsiType javaType, @NotNull final TypeUsage howThisTypeIsUsed,
             @NotNull final TypeVariableResolver typeVariableResolver) {
         return javaType.accept(new PsiTypeVisitor<JetType>() {
             @Override
@@ -119,8 +125,16 @@ public class JavaTypeTransformer {
                 if (psiClass instanceof PsiTypeParameter) {
                     PsiTypeParameter typeParameter = (PsiTypeParameter) psiClass;
                     TypeParameterDescriptor typeParameterDescriptor = typeVariableResolver.getTypeVariable(typeParameter.getName());
-//                    return TypeUtils.makeNullable(typeParameterDescriptor.getDefaultType());
-                    return typeParameterDescriptor.getDefaultType();
+
+                    if (howThisTypeIsUsed == TypeUsage.TYPE_ARGUMENT || howThisTypeIsUsed == TypeUsage.UPPER_BOUND) {
+                        // In Java: ArrayList<T>
+                        // In Kotlin: ArrayList<T>, not ArrayList<T?>
+                        // nullability will be taken care of in individual member signatures
+                        return typeParameterDescriptor.getDefaultType();
+                    }
+                    else {
+                        return TypeUtils.makeNullable(typeParameterDescriptor.getDefaultType());
+                    }
                 }
                 else {
                     JetType jetAnalog = getClassTypesMap().get(psiClass.getQualifiedName());
@@ -211,7 +225,8 @@ public class JavaTypeTransformer {
             classTypesMap = new HashMap<String, JetType>();
             for (JvmPrimitiveType jvmPrimitiveType : JvmPrimitiveType.values()) {
                 PrimitiveType primitiveType = jvmPrimitiveType.getPrimitiveType();
-                classTypesMap.put(jvmPrimitiveType.getWrapper().getFqName(), JetStandardLibrary.getInstance().getNullablePrimitiveJetType(primitiveType));
+                classTypesMap.put(jvmPrimitiveType.getWrapper().getFqName(), JetStandardLibrary.getInstance().getNullablePrimitiveJetType(
+                    primitiveType));
             }
             classTypesMap.put("java.lang.Object", JetStandardClasses.getNullableAnyType());
             classTypesMap.put("java.lang.String", JetStandardLibrary.getInstance().getNullableStringType());
@@ -234,4 +249,18 @@ public class JavaTypeTransformer {
         }
         return classDescriptorMap;
     }
+
+    /**
+     * We convert Java types differently, depending on where they occur in the Java code
+     * This enum encodes the kinds of occurrences
+     */
+    public enum TypeUsage {
+        // Type T occurs somewhere as a generic argument, e.g.: List<T> or List<? extends T>
+        TYPE_ARGUMENT,
+        UPPER_BOUND,
+        MEMBER_SIGNATURE_COVARIANT,
+        MEMBER_SIGNATURE_CONTRAVARIANT,
+        MEMBER_SIGNATURE_INVARIANT,
+        SUPERTYPE
+    }
 }
diff --git a/compiler/testData/codegen/regressions/kt529.kt b/compiler/testData/codegen/regressions/kt529.kt
index 9f6e87e1334..be27ebbc55c 100644
--- a/compiler/testData/codegen/regressions/kt529.kt
+++ b/compiler/testData/codegen/regressions/kt529.kt
@@ -61,7 +61,7 @@ class Luhny() {
 
     private fun printOneDigit() {
         while (!buffer.isEmpty()) {
-            val c = buffer.removeFirst()
+            val c = buffer.removeFirst().sure()
             print(c)
             if (c.isDigit()) {
                 digits.removeFirst()
diff --git a/compiler/testData/diagnostics/tests/j+k/UnboxingNulls.jet b/compiler/testData/diagnostics/tests/j+k/UnboxingNulls.jet
new file mode 100644
index 00000000000..2512d00714e
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/j+k/UnboxingNulls.jet
@@ -0,0 +1,13 @@
+// FILE: a/Test.java
+package a;
+
+public class Test<T> {
+  T t() {return null;}
+}
+// FILE: b.kt
+package a
+
+fun foo() {
+  // If this fails, it means that we have broken the rule that Java returns are always nullable
+  a.Test<Int>.t() <!UNSAFE_INFIX_CALL!>+<!> 1
+}
diff --git a/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.kt b/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.kt
index 34aafd20ac9..04c67e7b423 100644
--- a/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.kt
+++ b/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.kt
@@ -1,5 +1,5 @@
 package test
 
 final class MethosWithPRefTP() {
-    fun <erased P> f(p0: P) = #()
+    fun <erased P> f(p0: P?) = #()
 }
diff --git a/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.txt b/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.txt
index 8383dae7829..b349f077535 100644
--- a/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.txt
+++ b/compiler/testData/readJavaBinaryClass/MethosWithPRefTP.txt
@@ -2,5 +2,5 @@ namespace test
 
 final class test.MethosWithPRefTP : jet.Any {
     final /*constructor*/ fun <init>(): test.MethosWithPRefTP
-    final fun </*0*/ P : jet.Any?>f(/*0*/ p0: P): jet.Tuple0
+    final fun </*0*/ P : jet.Any?>f(/*0*/ p0: P?): jet.Tuple0
 }
diff --git a/libraries/stdlib/src/Arrays.kt b/libraries/stdlib/src/Arrays.kt
index 422b5bcce65..2fde990771c 100644
--- a/libraries/stdlib/src/Arrays.kt
+++ b/libraries/stdlib/src/Arrays.kt
@@ -84,7 +84,7 @@ inline fun   FloatArray.copyOf(newLength: Int = this.size) = Arrays.copyOf(this,
 inline fun  DoubleArray.copyOf(newLength: Int = this.size) = Arrays.copyOf(this, newLength).sure()
 inline fun    CharArray.copyOf(newLength: Int = this.size) = Arrays.copyOf(this, newLength).sure()
 
-inline fun  <T> Array<T>.copyOf(newLength: Int = this.size) : Array<T> = Arrays.copyOf(this, newLength).sure()
+inline fun  <T> Array<T>.copyOf(newLength: Int = this.size) : Array<T> = Arrays.copyOf(this as Array<T?>, newLength) as Array<T>
 
 inline fun BooleanArray.copyOfRange(from: Int, to: Int) = Arrays.copyOfRange(this, from, to).sure()
 inline fun    ByteArray.copyOfRange(from: Int, to: Int) = Arrays.copyOfRange(this, from, to).sure()
@@ -95,7 +95,7 @@ inline fun   FloatArray.copyOfRange(from: Int, to: Int) = Arrays.copyOfRange(thi
 inline fun  DoubleArray.copyOfRange(from: Int, to: Int) = Arrays.copyOfRange(this, from, to).sure()
 inline fun    CharArray.copyOfRange(from: Int, to: Int) = Arrays.copyOfRange(this, from, to).sure()
 
-inline fun  <T> Array<T>.copyOfRange(from: Int, to: Int) : Array<T> = Arrays.copyOfRange(this, from, to).sure()
+inline fun  <T> Array<T>.copyOfRange(from: Int, to: Int) : Array<T> = Arrays.copyOfRange(this as Array<T?>, from, to) as Array<T>
 
 inline val ByteArray.inputStream : ByteArrayInputStream
     get() = ByteArrayInputStream(this)
diff --git a/libraries/stdlib/src/Standard.kt b/libraries/stdlib/src/Standard.kt
index c575a484de6..22915330b50 100644
--- a/libraries/stdlib/src/Standard.kt
+++ b/libraries/stdlib/src/Standard.kt
@@ -10,7 +10,7 @@ import java.util.TreeSet
 /**
 Helper to make jet.Iterator usable in for
 */
-inline fun <T> jet.Iterator<T>.iterator() = this
+inline fun <T> Iterator<T>.iterator() = this
 
 /**
 Helper to make java.util.Iterator usable in for
@@ -24,7 +24,7 @@ fun <erased T> java.util.Enumeration<T>.iterator(): Iterator<T> = object: Iterat
   override val hasNext: Boolean
     get() = hasMoreElements()
 
-  override fun next() = nextElement()
+  override fun next() = nextElement().sure()
 }
 
 /*