diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 182337a178b..41364d42c08 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -324,6 +324,7 @@ public interface Errors {
     DiagnosticFactory0<KtParameter> INLINE_CLASS_CONSTRUCTOR_NOT_FINAL_READ_ONLY_PARAMETER = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<PsiElement> INLINE_CLASS_WITH_INITIALIZER = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory0<KtProperty> PROPERTY_WITH_BACKING_FIELD_INSIDE_INLINE_CLASS = DiagnosticFactory0.create(ERROR, DECLARATION_SIGNATURE);
+    DiagnosticFactory1<KtTypeReference, KotlinType> INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE = DiagnosticFactory1.create(ERROR);
 
     // Secondary constructors
 
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
index 6119a71fbf8..4695b214dfd 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
@@ -650,6 +650,7 @@ public class DefaultErrorMessages {
         MAP.put(INLINE_CLASS_CONSTRUCTOR_NOT_FINAL_READ_ONLY_PARAMETER, "Inline class primary constructor must have only final read-only (val) property parameter");
         MAP.put(INLINE_CLASS_WITH_INITIALIZER, "Inline class cannot have an initializer block");
         MAP.put(PROPERTY_WITH_BACKING_FIELD_INSIDE_INLINE_CLASS, "Inline class cannot have properties with backing fields");
+        MAP.put(INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE, "Inline class cannot have value parameter of type ''{0}''", RENDER_TYPE);
 
         MAP.put(VARIANCE_ON_TYPE_PARAMETER_NOT_ALLOWED, "Variance annotations are only allowed for type parameters of classes and interfaces");
         MAP.put(BOUND_ON_TYPE_ALIAS_PARAMETER_NOT_ALLOWED, "Bounds are not allowed on type alias parameters");
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt
index 1291ca7aff2..e802b714320 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/checkers/InlineClassDeclarationChecker.kt
@@ -14,6 +14,11 @@ import org.jetbrains.kotlin.psi.psiUtil.visibilityModifier
 import org.jetbrains.kotlin.resolve.BindingContext
 import org.jetbrains.kotlin.resolve.DescriptorUtils
 import org.jetbrains.kotlin.resolve.isInlineClass
+import org.jetbrains.kotlin.resolve.substitutedUnderlyingType
+import org.jetbrains.kotlin.types.typeUtil.isNothing
+import org.jetbrains.kotlin.types.typeUtil.isTypeParameter
+import org.jetbrains.kotlin.types.typeUtil.isUnit
+import org.jetbrains.kotlin.utils.addToStdlib.safeAs
 
 object InlineClassDeclarationChecker : DeclarationChecker {
     override fun check(declaration: KtDeclaration, descriptor: DeclarationDescriptor, context: DeclarationCheckerContext) {
@@ -71,6 +76,17 @@ object InlineClassDeclarationChecker : DeclarationChecker {
 
             return
         }
+
+        val baseParameterType = descriptor.safeAs<ClassDescriptor>()?.defaultType?.substitutedUnderlyingType()
+        if (baseParameterType != null &&
+            (baseParameterType.isUnit() || baseParameterType.isNothing() || baseParameterType.isTypeParameter())
+        ) {
+            val typeReference = baseParameter.typeReference
+            if (typeReference != null) {
+                trace.report(Errors.INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE.on(typeReference, baseParameterType))
+                return
+            }
+        }
     }
 
     private fun isParameterAcceptableForInlineClass(parameter: KtParameter): Boolean {
diff --git a/compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.kt b/compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.kt
new file mode 100644
index 00000000000..036413bf0d5
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.kt
@@ -0,0 +1,10 @@
+// !LANGUAGE: +InlineClasses
+
+inline class Foo<T>(val x: <!INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE!>T<!>)
+inline class FooNullable<T>(val x: <!INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE!>T?<!>)
+
+inline class Bar(val u: <!INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE!>Unit<!>)
+inline class BarNullable(val u: Unit?)
+
+inline class Baz(val u: <!INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE!>Nothing<!>)
+inline class BazNullable(val u: Nothing?)
diff --git a/compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.txt b/compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.txt
new file mode 100644
index 00000000000..4ab20769e03
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.txt
@@ -0,0 +1,49 @@
+package
+
+public final inline class Bar {
+    public constructor Bar(/*0*/ u: kotlin.Unit)
+    public final val u: kotlin.Unit
+    public open override /*1*/ /*synthesized*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*synthesized*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*synthesized*/ fun toString(): kotlin.String
+}
+
+public final inline class BarNullable {
+    public constructor BarNullable(/*0*/ u: kotlin.Unit?)
+    public final val u: kotlin.Unit?
+    public open override /*1*/ /*synthesized*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*synthesized*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*synthesized*/ fun toString(): kotlin.String
+}
+
+public final inline class Baz {
+    public constructor Baz(/*0*/ u: kotlin.Nothing)
+    public final val u: kotlin.Nothing
+    public open override /*1*/ /*synthesized*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*synthesized*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*synthesized*/ fun toString(): kotlin.String
+}
+
+public final inline class BazNullable {
+    public constructor BazNullable(/*0*/ u: kotlin.Nothing?)
+    public final val u: kotlin.Nothing?
+    public open override /*1*/ /*synthesized*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*synthesized*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*synthesized*/ fun toString(): kotlin.String
+}
+
+public final inline class Foo</*0*/ T> {
+    public constructor Foo</*0*/ T>(/*0*/ x: T)
+    public final val x: T
+    public open override /*1*/ /*synthesized*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*synthesized*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*synthesized*/ fun toString(): kotlin.String
+}
+
+public final inline class FooNullable</*0*/ T> {
+    public constructor FooNullable</*0*/ T>(/*0*/ x: T?)
+    public final val x: T?
+    public open override /*1*/ /*synthesized*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*synthesized*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*synthesized*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithDefaultTypeParameter.kt b/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithDefaultTypeParameter.kt
index 6a43795701a..8430b20a0ba 100644
--- a/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithDefaultTypeParameter.kt
+++ b/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithDefaultTypeParameter.kt
@@ -1,5 +1,6 @@
 // !LANGUAGE: +InlineClasses
 
+@Suppress("INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE")
 inline class Default<T>(val x: T)
 
 class Inv<T>
diff --git a/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithNotNullTypeParameter.kt b/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithNotNullTypeParameter.kt
index f3632c16adb..d6d10565804 100644
--- a/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithNotNullTypeParameter.kt
+++ b/compiler/testData/writeSignature/inlineClasses/genericInlineClassWithNotNullTypeParameter.kt
@@ -1,6 +1,9 @@
 // !LANGUAGE: +InlineClasses
 
+@Suppress("INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE")
 inline class NonNull<T : Any>(val x: T)
+
+@Suppress("INLINE_CLASS_HAS_INAPPLICABLE_PARAMETER_TYPE")
 inline class NullableValue<T : Any>(val x: T?)
 
 object Test {
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 0484606d77c..9590870c720 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -10872,6 +10872,11 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 runTest("compiler/testData/diagnostics/tests/inlineClasses/inlineClassImplementsCollection.kt");
             }
 
+            @TestMetadata("inlineClassWithForbiddenUnderlyingType.kt")
+            public void testInlineClassWithForbiddenUnderlyingType() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.kt");
+            }
+
             @TestMetadata("inlineClassesInsideAnnotations.kt")
             public void testInlineClassesInsideAnnotations() throws Exception {
                 runTest("compiler/testData/diagnostics/tests/inlineClasses/inlineClassesInsideAnnotations.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
index df63df64a4d..f763379b1bc 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
@@ -10872,6 +10872,11 @@ public class DiagnosticsUsingJavacTestGenerated extends AbstractDiagnosticsUsing
                 runTest("compiler/testData/diagnostics/tests/inlineClasses/inlineClassImplementsCollection.kt");
             }
 
+            @TestMetadata("inlineClassWithForbiddenUnderlyingType.kt")
+            public void testInlineClassWithForbiddenUnderlyingType() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/inlineClasses/inlineClassWithForbiddenUnderlyingType.kt");
+            }
+
             @TestMetadata("inlineClassesInsideAnnotations.kt")
             public void testInlineClassesInsideAnnotations() throws Exception {
                 runTest("compiler/testData/diagnostics/tests/inlineClasses/inlineClassesInsideAnnotations.kt");