diff --git a/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirDiagnosticsSmokeTestGenerated.java b/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirDiagnosticsSmokeTestGenerated.java
index 734447fef29..cbcaf8768bf 100644
--- a/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirDiagnosticsSmokeTestGenerated.java
+++ b/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirDiagnosticsSmokeTestGenerated.java
@@ -8341,6 +8341,11 @@ public class FirDiagnosticsSmokeTestGenerated extends AbstractFirDiagnosticsSmok
                 KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/diagnostics/tests/generics/capturedParameters"), Pattern.compile("^(.+)\\.kt$"), TargetBackend.ANY, true);
             }
 
+            @TestMetadata("captured.kt")
+            public void testCaptured() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/generics/capturedParameters/captured.kt");
+            }
+
             @TestMetadata("innerLocalClass.kt")
             public void testInnerLocalClass() throws Exception {
                 runTest("compiler/testData/diagnostics/tests/generics/capturedParameters/innerLocalClass.kt");
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
index bdbf9224a44..2daa47dfa2b 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
@@ -257,7 +257,7 @@ class DiagnosticReporterByTrackingStrategy(
                         val index = parameterTypes.indexOf(constraintError.upperKotlinType.unwrap())
                         val lambdaExpression = lambda.psiExpression as? KtLambdaExpression ?: return@lambda
                         val parameter = lambdaExpression.valueParameters.getOrNull(index) ?: return@lambda
-                        trace.report(Errors.EXPECTED_PARAMETER_TYPE_MISMATCH.on(parameter, constraintError.upperKotlinType.unCapture()))
+                        trace.report(Errors.EXPECTED_PARAMETER_TYPE_MISMATCH.on(parameter, constraintError.upperKotlinType))
                         return
                     }
 
@@ -277,8 +277,8 @@ class DiagnosticReporterByTrackingStrategy(
                     trace.report(
                         Errors.TYPE_MISMATCH.on(
                             deparenthesized,
-                            constraintError.upperKotlinType.unCapture(),
-                            constraintError.lowerKotlinType.unCapture()
+                            constraintError.upperKotlinType,
+                            constraintError.lowerKotlinType
                         )
                     )
                 }
@@ -289,8 +289,8 @@ class DiagnosticReporterByTrackingStrategy(
                         trace.report(
                             Errors.TYPE_MISMATCH.on(
                                 it,
-                                constraintError.upperKotlinType.unCapture(),
-                                constraintError.lowerKotlinType.unCapture()
+                                constraintError.upperKotlinType,
+                                constraintError.lowerKotlinType
                             )
                         )
                     }
diff --git a/compiler/testData/diagnostics/tests/generics/capturedParameters/captured.kt b/compiler/testData/diagnostics/tests/generics/capturedParameters/captured.kt
new file mode 100644
index 00000000000..b69a24e3589
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/generics/capturedParameters/captured.kt
@@ -0,0 +1,30 @@
+// !LANGUAGE: +NewInference
+// !DIAGNOSTICS: -UNUSED_PARAMETER
+
+class X {
+    abstract class Y<T : Any>
+
+    fun <T : Any> foo(y: Y<T>, t: T) {
+    }
+}
+
+
+fun testStar(y: X.Y<*>, t: Any) {
+    X().foo(y, <!TYPE_MISMATCH("CapturedType(*)", "Any")!>t<!>)
+}
+
+fun testOut(y: X.Y<out Any>, t: Any) {
+    X().foo(y, <!TYPE_MISMATCH("CapturedType(out Any)", "Any")!>t<!>)
+}
+
+fun testIn(y: X.Y<in Any>, t: Any) {
+    X().foo(y, t)
+}
+
+fun <T : Any> testWithParameter(y: X.Y<T>, t: Any) {
+    X().foo(y, <!TYPE_MISMATCH("T", "Any")!>t<!>)
+}
+
+fun <T : Any> testWithCapturedParameter(y: X.Y<out T>, t: Any) {
+    X().foo(y, <!TYPE_MISMATCH("CapturedType(out T)", "Any")!>t<!>)
+}
diff --git a/compiler/testData/diagnostics/tests/generics/capturedParameters/captured.txt b/compiler/testData/diagnostics/tests/generics/capturedParameters/captured.txt
new file mode 100644
index 00000000000..9360220bb10
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/generics/capturedParameters/captured.txt
@@ -0,0 +1,22 @@
+package
+
+public fun testIn(/*0*/ y: X.Y<in kotlin.Any>, /*1*/ t: kotlin.Any): kotlin.Unit
+public fun testOut(/*0*/ y: X.Y<out kotlin.Any>, /*1*/ t: kotlin.Any): kotlin.Unit
+public fun testStar(/*0*/ y: X.Y<*>, /*1*/ t: kotlin.Any): kotlin.Unit
+public fun </*0*/ T : kotlin.Any> testWithCapturedParameter(/*0*/ y: X.Y<out T>, /*1*/ t: kotlin.Any): kotlin.Unit
+public fun </*0*/ T : kotlin.Any> testWithParameter(/*0*/ y: X.Y<T>, /*1*/ t: kotlin.Any): kotlin.Unit
+
+public final class X {
+    public constructor X()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public final fun </*0*/ T : kotlin.Any> foo(/*0*/ y: X.Y<T>, /*1*/ t: T): kotlin.Unit
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+
+    public abstract class Y</*0*/ T : kotlin.Any> {
+        public constructor Y</*0*/ T : kotlin.Any>()
+        public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+        public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+        public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+    }
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 4e285245101..801136fec4f 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -8348,6 +8348,11 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                     KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/diagnostics/tests/generics/capturedParameters"), Pattern.compile("^(.*)\\.kts?$"), TargetBackend.ANY, true);
                 }
 
+                @TestMetadata("captured.kt")
+                public void testCaptured() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/generics/capturedParameters/captured.kt");
+                }
+
                 @TestMetadata("innerLocalClass.kt")
                 public void testInnerLocalClass() throws Exception {
                     runTest("compiler/testData/diagnostics/tests/generics/capturedParameters/innerLocalClass.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
index 9e94ea9f3bd..82d7ce3ac34 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
@@ -8343,6 +8343,11 @@ public class DiagnosticsUsingJavacTestGenerated extends AbstractDiagnosticsUsing
                     KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("compiler/testData/diagnostics/tests/generics/capturedParameters"), Pattern.compile("^(.+)\\.kt$"), TargetBackend.ANY, true);
                 }
 
+                @TestMetadata("captured.kt")
+                public void testCaptured() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/generics/capturedParameters/captured.kt");
+                }
+
                 @TestMetadata("innerLocalClass.kt")
                 public void testInnerLocalClass() throws Exception {
                     runTest("compiler/testData/diagnostics/tests/generics/capturedParameters/innerLocalClass.kt");