diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineCodegen.kt b/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineCodegen.kt
index f248d1ed8e9..ae940fbe243 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineCodegen.kt
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/coroutines/CoroutineCodegen.kt
@@ -50,8 +50,9 @@ class CoroutineCodegen(
         parentCodegen: MemberCodegen<*>,
         classBuilder: ClassBuilder,
         private val continuationSuperType: KotlinType,
-        private val controllerType: KotlinType
+        private val coroutineLambdaDescriptor: FunctionDescriptor
 ) : ClosureCodegen(state, element, null, closureContext, null, strategy, parentCodegen, classBuilder) {
+    private val controllerType = coroutineLambdaDescriptor.controllerTypeIfCoroutine!!
 
     override fun generateClosureBody() {
         v.newField(
@@ -64,6 +65,14 @@ class CoroutineCodegen(
                 COROUTINE_LABEL_FIELD_NAME,
                 Type.INT_TYPE.descriptor, null, null)
 
+        for (parameter in funDescriptor.valueParameters) {
+            v.newField(
+                    OtherOrigin(parameter),
+                    Opcodes.ACC_PRIVATE or Opcodes.ACC_FINAL,
+                    COROUTINE_LAMBDA_PARAMETER_PREFIX + parameter.index,
+                    typeMapper.mapType(parameter.type).descriptor, null, null)
+        }
+
         val classDescriptor = closureContext.contextDescriptor
 
         functionCodegen.generateMethod(JvmDeclarationOrigin.NO_ORIGIN, funDescriptor,
@@ -77,6 +86,15 @@ class CoroutineCodegen(
 
                 with(codegen.v) {
                     setLabelValue(LABEL_VALUE_BEFORE_FIRST_SUSPENSION)
+
+                    for (parameter in funDescriptor.valueParameters) {
+                        // 0 - this
+                        // 1 - controller
+                        val parametersIndexShift = 2
+                        AsmUtil.genAssignInstanceFieldFromParam(
+                                parameter.getFieldInfoForCoroutineLambdaParameter(), parametersIndexShift + parameter.index, this)
+                    }
+
                     load(0, AsmTypes.OBJECT_TYPE)
                     areturn(AsmTypes.OBJECT_TYPE)
                 }
@@ -119,12 +137,30 @@ class CoroutineCodegen(
                                        object : FunctionGenerationStrategy.FunctionDefault(state, element as KtDeclarationWithBody) {
                                            override fun doGenerateBody(codegen: ExpressionCodegen, signature: JvmMethodSignature) {
                                                codegen.v.visitAnnotation(CONTINUATION_METHOD_ANNOTATION_DESC, true).visitEnd()
+                                               codegen.initializeCoroutineParameters()
                                                super.doGenerateBody(codegen, signature)
                                                generateExceptionHandlingBlock(codegen)
                                            }
                                        })
     }
 
+    private fun ExpressionCodegen.initializeCoroutineParameters() {
+        for (parameter in coroutineLambdaDescriptor.valueParameters) {
+            val mappedType = typeMapper.mapType(parameter.type)
+            val newIndex = myFrameMap.enter(parameter, mappedType)
+
+            StackValue.field(parameter.getFieldInfoForCoroutineLambdaParameter(), generateThisOrOuter(context.thisDescriptor, false))
+                    .put(mappedType, v)
+            v.store(newIndex, mappedType)
+        }
+    }
+
+    private fun ValueParameterDescriptor.getFieldInfoForCoroutineLambdaParameter() =
+            FieldInfo.createForHiddenField(
+                    typeMapper.mapClass(closureContext.thisDescriptor),
+                    typeMapper.mapType(returnType!!),
+                    COROUTINE_LAMBDA_PARAMETER_PREFIX + index)
+
     private fun generateExceptionHandlingBlock(codegen: ExpressionCodegen) {
         val handleExceptionFunction =
                 controllerType.memberScope.getContributedFunctions(
@@ -132,7 +168,7 @@ class CoroutineCodegen(
                         ?: return
 
         val (resolvedCall, fakeExceptionExpression, fakeThisContinuationException) =
-                createResolvedCallForHandleExceptionCall(element, handleExceptionFunction, (context as ClosureContext).coroutineDescriptor!!)
+                createResolvedCallForHandleExceptionCall(element, handleExceptionFunction, coroutineLambdaDescriptor)
 
         codegen.tempVariables.put(fakeExceptionExpression, StackValue.operation(AsmTypes.OBJECT_TYPE) {
             codegen.v.invokestatic(COROUTINE_MARKER_OWNER, HANDLE_EXCEPTION_ARGUMENT_MARKER_NAME, "()Ljava/lang/Object;", false)
@@ -228,7 +264,9 @@ class CoroutineCodegen(
                             descriptorWithContinuationReturnType, originalCoroutineLambdaDescriptor, expressionCodegen, state.typeMapper),
                     FunctionGenerationStrategy.FunctionDefault(state, declaration), expressionCodegen.parentCodegen, classBuilder,
                     continuationSupertype,
-                    originalCoroutineLambdaDescriptor.controllerTypeIfCoroutine!!)
+                    originalCoroutineLambdaDescriptor)
         }
     }
 }
+
+private const val COROUTINE_LAMBDA_PARAMETER_PREFIX = "p$"
diff --git a/compiler/testData/codegen/box/coroutines/lambdaParameters.kt b/compiler/testData/codegen/box/coroutines/lambdaParameters.kt
new file mode 100644
index 00000000000..cc7e76c0115
--- /dev/null
+++ b/compiler/testData/codegen/box/coroutines/lambdaParameters.kt
@@ -0,0 +1,40 @@
+class Controller {
+    suspend fun suspendHere(v: String, x: Continuation<String>) {
+        x.resume(v)
+    }
+}
+
+fun builder(coroutine c: Controller.(String, Int) -> Continuation<Unit>) {
+    c(Controller(), "OK", 56).resume(Unit)
+}
+
+fun noinline(l: () -> String) = l()
+inline fun inline(l: () -> String) = l()
+
+fun box(): String {
+    var result = ""
+
+    builder { s, i ->
+        result = suspendHere(s + "#" + i)
+    }
+
+    if (result != "OK#56") return "fail 1: $result"
+
+    builder { s, i ->
+        result = suspendHere(noinline {
+            s + "#" + i
+        })
+    }
+
+    if (result != "OK#56") return "fail 2: $result"
+
+    builder { s, i ->
+        result = suspendHere(inline {
+            s + "#" + i
+        })
+    }
+
+    if (result != "OK#56") return "fail 3: $result"
+
+    return "OK"
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index 0edadca2339..26f70ce9f75 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -4171,6 +4171,12 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             doTest(fileName);
         }
 
+        @TestMetadata("lambdaParameters.kt")
+        public void testLambdaParameters() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/lambdaParameters.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("manualContinuationImpl.kt")
         public void testManualContinuationImpl() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/box/coroutines/manualContinuationImpl.kt");