diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/types/checker/TypeCheckingProcedure.java b/compiler/frontend/src/org/jetbrains/jet/lang/types/checker/TypeCheckingProcedure.java
index debad9b6218..3018bb09ead 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/types/checker/TypeCheckingProcedure.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/types/checker/TypeCheckingProcedure.java
@@ -48,12 +48,12 @@ public class TypeCheckingProcedure {
         return null;
     }
 
-    private static JetType getOutType(TypeParameterDescriptor parameter, TypeProjection argument) {
+    public static JetType getOutType(TypeParameterDescriptor parameter, TypeProjection argument) {
         boolean isOutProjected = argument.getProjectionKind() == IN_VARIANCE || parameter.getVariance() == IN_VARIANCE;
         return isOutProjected ? parameter.getUpperBoundsAsType() : argument.getType();
     }
 
-    private static JetType getInType(TypeParameterDescriptor parameter, TypeProjection argument) {
+    public static JetType getInType(TypeParameterDescriptor parameter, TypeProjection argument) {
         boolean isOutProjected = argument.getProjectionKind() == OUT_VARIANCE || parameter.getVariance() == OUT_VARIANCE;
         return isOutProjected ? KotlinBuiltIns.getInstance().getNothingType() : argument.getType();
     }
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/types/expressions/BasicExpressionTypingVisitor.java b/compiler/frontend/src/org/jetbrains/jet/lang/types/expressions/BasicExpressionTypingVisitor.java
index 4622569ba9f..f88184d67b7 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/types/expressions/BasicExpressionTypingVisitor.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/types/expressions/BasicExpressionTypingVisitor.java
@@ -45,6 +45,7 @@ import org.jetbrains.jet.lang.resolve.scopes.receivers.ExpressionReceiver;
 import org.jetbrains.jet.lang.resolve.scopes.receivers.ReceiverValue;
 import org.jetbrains.jet.lang.types.*;
 import org.jetbrains.jet.lang.types.checker.JetTypeChecker;
+import org.jetbrains.jet.lang.types.checker.TypeCheckingProcedure;
 import org.jetbrains.jet.lang.types.lang.KotlinBuiltIns;
 import org.jetbrains.jet.lexer.JetTokens;
 
@@ -293,23 +294,30 @@ public class BasicExpressionTypingVisitor extends ExpressionTypingVisitor {
             return false;
         }
 
-        List<TypeParameterDescriptor> superTypeParameters = supertype.getConstructor().getParameters();
+        List<TypeParameterDescriptor> superParameters = supertype.getConstructor().getParameters();
         {
             Multimap<TypeConstructor, TypeProjection> subtypeSubstitutionMap =
                     SubstitutionUtils.buildDeepSubstitutionMultimap(subtype);
 
-            for (int i = 0; i < superTypeParameters.size(); i++) {
-                TypeProjection superTypeArgument = supertype.getArguments().get(i);
-                TypeParameterDescriptor superTypeParameter = superTypeParameters.get(i);
+            for (int i = 0; i < superParameters.size(); i++) {
+                TypeProjection superArgument = supertype.getArguments().get(i);
+                TypeParameterDescriptor parameter = superParameters.get(i);
 
-                if (superTypeParameter.isReified()) {
+                if (parameter.isReified()) {
                     continue;
                 }
 
-                Collection<TypeProjection> substituted = subtypeSubstitutionMap.get(superTypeParameter.getTypeConstructor());
-                for (TypeProjection substitutedProjection : substituted) {
-                    //if (!substitutedProjection.getType().equals(superTypeArgument.getType())) {
-                    if (!typeChecker.isSubtypeOf(superTypeArgument.getType(), substitutedProjection.getType())) { // TODO hides error
+                Collection<TypeProjection> substituted = subtypeSubstitutionMap.get(parameter.getTypeConstructor());
+                for (TypeProjection substitutedArgument : substituted) {
+                    JetType superIn = TypeCheckingProcedure.getInType(parameter, superArgument);
+                    JetType superOut = TypeCheckingProcedure.getOutType(parameter, superArgument);
+
+                    JetType subIn = TypeCheckingProcedure.getInType(parameter, substitutedArgument);
+                    JetType subOut = TypeCheckingProcedure.getOutType(parameter, substitutedArgument);
+
+                    if (typeChecker.isSubtypeOf(superOut, subOut) && typeChecker.isSubtypeOf(subIn, superIn)) {
+                        // super type range must be subset of sub type range
+                    } else {
                         return true;
                     }
                 }
@@ -325,7 +333,7 @@ public class BasicExpressionTypingVisitor extends ExpressionTypingVisitor {
 
             Set<JetType> clearSubstituted = new HashSet<JetType>();
 
-            for (TypeParameterDescriptor superTypeParameter : superTypeParameters) {
+            for (TypeParameterDescriptor superTypeParameter : superParameters) {
                 Collection<TypeProjection> substituted = clearTypeSubstitutionMap.get(superTypeParameter.getTypeConstructor());
                 for (TypeProjection substitutedProjection : substituted) {
                     clearSubstituted.add(substitutedProjection.getType());
diff --git a/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut.kt b/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut.kt
new file mode 100644
index 00000000000..47400289be2
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut.kt
@@ -0,0 +1 @@
+fun f(a: MutableList<out Number>) = a is MutableList<out Hashable>
diff --git a/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut2.kt b/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut2.kt
new file mode 100644
index 00000000000..6f7bc4f981a
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut2.kt
@@ -0,0 +1 @@
+fun f(a: MutableList<String>) = a is MutableList<out CharSequence>
diff --git a/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOutAtClass.kt b/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOutAtClass.kt
new file mode 100644
index 00000000000..51395925aad
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOutAtClass.kt
@@ -0,0 +1 @@
+fun f(a: List<Number>) = a is List<Hashable>
diff --git a/compiler/testData/diagnostics/tests/cast/IsErasedDisallowDifferentArgInvariantPosition.kt b/compiler/testData/diagnostics/tests/cast/IsErasedDisallowDifferentArgInvariantPosition.kt
new file mode 100644
index 00000000000..430c47fdc50
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/cast/IsErasedDisallowDifferentArgInvariantPosition.kt
@@ -0,0 +1 @@
+fun f(a: MutableList<String>) = a is <!CANNOT_CHECK_FOR_ERASED!>MutableList<CharSequence><!>
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromIn.kt b/compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromIn.kt
new file mode 100644
index 00000000000..88768eca603
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromIn.kt
@@ -0,0 +1 @@
+fun f(a: MutableList<in String>) = a is <!CANNOT_CHECK_FOR_ERASED!>MutableList<CharSequence><!>
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromOutAtClass.kt b/compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromOutAtClass.kt
new file mode 100644
index 00000000000..f7399ac62e2
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromOutAtClass.kt
@@ -0,0 +1 @@
+fun f(a: List<Hashable>) = a is <!CANNOT_CHECK_FOR_ERASED!>List<Number><!>
diff --git a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
index eb567d57145..e32c19c88a0 100644
--- a/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java
@@ -713,6 +713,21 @@ public class JetDiagnosticsTestGenerated extends AbstractDiagnosticsTestWithEage
                 doTest("compiler/testData/diagnostics/tests/cast/AsErasedWarning.kt");
             }
             
+            @TestMetadata("IsErasedAllowFromOut.kt")
+            public void testIsErasedAllowFromOut() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut.kt");
+            }
+            
+            @TestMetadata("IsErasedAllowFromOut2.kt")
+            public void testIsErasedAllowFromOut2() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOut2.kt");
+            }
+            
+            @TestMetadata("IsErasedAllowFromOutAtClass.kt")
+            public void testIsErasedAllowFromOutAtClass() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/cast/IsErasedAllowFromOutAtClass.kt");
+            }
+            
             @TestMetadata("IsErasedAllowParameterSubtype.kt")
             public void testIsErasedAllowParameterSubtype() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/cast/IsErasedAllowParameterSubtype.kt");
@@ -728,16 +743,31 @@ public class JetDiagnosticsTestGenerated extends AbstractDiagnosticsTestWithEage
                 doTest("compiler/testData/diagnostics/tests/cast/IsErasedAllowSameParameterParameter.kt");
             }
             
+            @TestMetadata("IsErasedDisallowDifferentArgInvariantPosition.kt")
+            public void testIsErasedDisallowDifferentArgInvariantPosition() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/cast/IsErasedDisallowDifferentArgInvariantPosition.kt");
+            }
+            
             @TestMetadata("IsErasedDisallowFromAny.kt")
             public void testIsErasedDisallowFromAny() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromAny.kt");
             }
             
+            @TestMetadata("IsErasedDisallowFromIn.kt")
+            public void testIsErasedDisallowFromIn() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromIn.kt");
+            }
+            
             @TestMetadata("IsErasedDisallowFromOut.kt")
             public void testIsErasedDisallowFromOut() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromOut.kt");
             }
             
+            @TestMetadata("IsErasedDisallowFromOutAtClass.kt")
+            public void testIsErasedDisallowFromOutAtClass() throws Exception {
+                doTest("compiler/testData/diagnostics/tests/cast/IsErasedDisallowFromOutAtClass.kt");
+            }
+            
             @TestMetadata("IsErasedStar.kt")
             public void testIsErasedStar() throws Exception {
                 doTest("compiler/testData/diagnostics/tests/cast/IsErasedStar.kt");