diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 2805aa1e67c..d48511d667e 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -927,7 +927,7 @@ public interface Errors {
     DiagnosticFactory0<KtAnnotationEntry> NON_INTERNAL_PUBLISHED_API = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory1<PsiElement, CallableDescriptor> PROTECTED_CALL_FROM_PUBLIC_INLINE = DiagnosticFactory1.create(WARNING);
     DiagnosticFactory2<KtElement, KtExpression, DeclarationDescriptor> INVALID_DEFAULT_FUNCTIONAL_PARAMETER_FOR_INLINE = DiagnosticFactory2.create(ERROR);
-    DiagnosticFactory2<KtElement, KtExpression, DeclarationDescriptor> NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE = DiagnosticFactory2.create(ERROR);
+    DiagnosticFactory2<KtElement, KtExpression, DeclarationDescriptor> NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE = DiagnosticFactory2.create(ERROR);
 
     DiagnosticFactory0<PsiElement> NON_LOCAL_SUSPENSION_POINT = DiagnosticFactory0.create(ERROR);
     DiagnosticFactory1<PsiElement, CallableDescriptor> ILLEGAL_SUSPEND_FUNCTION_CALL = DiagnosticFactory1.create(ERROR);
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 440fc9d83e0..4e948d6365c 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
@@ -837,7 +837,7 @@ public class DefaultErrorMessages {
         MAP.put(NON_INTERNAL_PUBLISHED_API, "@PublishedApi annotation is only applicable for internal declaration");
         MAP.put(PROTECTED_CALL_FROM_PUBLIC_INLINE, "Protected function call from public-API inline function is deprecated", NAME);
         MAP.put(INVALID_DEFAULT_FUNCTIONAL_PARAMETER_FOR_INLINE, "Invalid default value for inline parameter: ''{0}''. Only lambdas, anonymous functions, and callable references are supported", ELEMENT_TEXT, SHORT_NAMES_IN_TYPES);
-        MAP.put(NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE, "Usage of inline parameter ''{0}'' in default value for another inline parameter is not supported", ELEMENT_TEXT, SHORT_NAMES_IN_TYPES);
+        MAP.put(NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE, "Usage of inline parameter ''{0}'' in default value for another inline parameter is not supported", ELEMENT_TEXT, SHORT_NAMES_IN_TYPES);
         //Inline non locals
         MAP.put(NON_LOCAL_RETURN_NOT_ALLOWED, "Can''t inline ''{0}'' here: it may contain non-local returns. Add ''crossinline'' modifier to parameter declaration ''{0}''", ELEMENT_TEXT);
         MAP.put(INLINE_CALL_CYCLE, "The ''{0}'' invocation is a part of inline cycle", NAME);
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/checkers/InlineChecker.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/checkers/InlineChecker.kt
index 2031ee923bc..81dc60598f0 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/checkers/InlineChecker.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/checkers/InlineChecker.kt
@@ -89,7 +89,7 @@ internal class InlineChecker(private val descriptor: FunctionDescriptor) : CallC
             !supportDefaultValueInline || expression.getParentOfType<KtParameter>(true)?.let {
                 val allow = it !in inlinableKtParameters
                 if (!allow) {
-                    context.trace.report(NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE.on(expression, expression, descriptor))
+                    context.trace.report(NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE.on(expression, expression, descriptor))
                 }
                 allow
             } ?: true
diff --git a/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/innerClassConstuctorReference.kt b/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/innerClassConstuctorReference.kt
new file mode 100644
index 00000000000..3c1e468291e
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/innerClassConstuctorReference.kt
@@ -0,0 +1,23 @@
+// FILE: 1.kt
+// LANGUAGE_VERSION: 1.2
+// SKIP_INLINE_CHECK_IN: inlineFun$default
+package test
+
+class A(val value: String) {
+
+    inner class Inner {
+        fun ok() = value
+    }
+}
+
+inline fun inlineFun(a: A, lambda: () -> A.Inner = a::Inner): A.Inner {
+    return lambda()
+}
+
+// FILE: 2.kt
+
+import test.*
+
+fun box(): String {
+    return inlineFun(A("OK")).ok()
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privateFunctionReference.kt b/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privateFunctionReference.kt
new file mode 100644
index 00000000000..9daf1aa9f06
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privateFunctionReference.kt
@@ -0,0 +1,18 @@
+// FILE: 1.kt
+// LANGUAGE_VERSION: 1.2
+// SKIP_INLINE_CHECK_IN: inlineFun$default
+package test
+
+private fun ok() = "OK"
+
+internal inline fun inlineFun(lambda: () -> String = ::ok): String {
+    return lambda()
+}
+
+// FILE: 2.kt
+
+import test.*
+
+fun box(): String {
+    return inlineFun()
+}
\ No newline at end of file
diff --git a/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privatePropertyReference.kt b/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privatePropertyReference.kt
new file mode 100644
index 00000000000..4514cfd5a70
--- /dev/null
+++ b/compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privatePropertyReference.kt
@@ -0,0 +1,18 @@
+// FILE: 1.kt
+// LANGUAGE_VERSION: 1.2
+// SKIP_INLINE_CHECK_IN: inlineFun$default
+package test
+
+private val ok = "OK"
+
+internal inline fun inlineFun(lambda: () -> String = ::ok): String {
+    return lambda()
+}
+
+// FILE: 2.kt
+
+import test.*
+
+fun box(): String {
+    return inlineFun()
+}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.kt b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.kt
index f8e53c2ea26..840f800a426 100644
--- a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.kt
+++ b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.kt
@@ -3,24 +3,24 @@
 
 inline fun inlineFun(lambda: () -> String) = lambda()
 
-inline fun noInlineFun(lambda: () -> String) = lambda()
+fun noInlineFun(lambda: () -> String) = lambda()
 
 
-inline fun default0_1(lambda: () -> String, dlambda: () -> String = { <!NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE!>lambda<!>; "OK" }) {
+inline fun default0_1(lambda: () -> String, dlambda: () -> String = { <!NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE!>lambda<!>; "OK" }) {
     lambda() + dlambda()
 }
 
-inline fun default0_2(lambda: () -> String, dlambda: () -> String = { noInlineFun (<!NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE, NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE!>lambda<!>) }) {
+inline fun default0_2(lambda: () -> String, dlambda: () -> String = { noInlineFun (<!NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE, NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE!>lambda<!>) }) {
     lambda() + dlambda()
 }
 
 
 
-inline fun default0(lambda: () -> String, dlambda: () -> String = { noInlineFun (<!NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE, NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE!>lambda<!>) }) {
+inline fun default0(lambda: () -> String, dlambda: () -> String = { noInlineFun (<!NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE, NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE!>lambda<!>) }) {
     lambda() + dlambda()
 }
 
-inline fun default1_0(lambda: () -> String, dlambda: () -> String = { <!NON_LOCAL_RETURN_NOT_ALLOWED, NOT_SUPPORTED_USAGE_OF_INLINE_PARAMETER_IN_DEFAULT_INLINE_ONE!>lambda<!>() }) {
+inline fun default1_0(lambda: () -> String, dlambda: () -> String = { <!NON_LOCAL_RETURN_NOT_ALLOWED, NOT_SUPPORTED_INLINE_PARAMETER_IN_INLINE_PARAMETER_DEFAULT_VALUE!>lambda<!>() }) {
     lambda() + dlambda()
 }
 
diff --git a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.txt b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.txt
index 1363590b8ca..258781c12e5 100644
--- a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.txt
+++ b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameter.txt
@@ -13,4 +13,4 @@ public inline fun default2_1crossinline(/*0*/ crossinline lambda: () -> kotlin.S
 public inline fun default2_2(/*0*/ noinline lambda: () -> kotlin.String, /*1*/ dlambda: () -> kotlin.String = ...): kotlin.Unit
 public inline fun default2_3(/*0*/ noinline lambda: () -> kotlin.String, /*1*/ noinline dlambda: () -> kotlin.String = ...): kotlin.Unit
 public inline fun inlineFun(/*0*/ lambda: () -> kotlin.String): kotlin.String
-public inline fun noInlineFun(/*0*/ lambda: () -> kotlin.String): kotlin.String
+public fun noInlineFun(/*0*/ lambda: () -> kotlin.String): kotlin.String
diff --git a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.kt b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.kt
index 32016f9118a..944a8f844c0 100644
--- a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.kt
+++ b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.kt
@@ -3,14 +3,14 @@
 
 inline fun inlineFun(lambda: () -> String) = lambda()
 
-inline fun noInlineFun(lambda: () -> String) = lambda()
+fun noInlineFun(lambda: () -> String) = lambda()
 
 
 inline fun default0_1(lambda: () -> String, <!NOT_YET_SUPPORTED_IN_INLINE!>dlambda: () -> String = { <!USAGE_IS_NOT_INLINABLE, TYPE_MISMATCH!>lambda<!> }<!>) {
     lambda() + dlambda()
 }
 
-inline fun default0_2(lambda: () -> String, <!NOT_YET_SUPPORTED_IN_INLINE!>dlambda: () -> String = { noInlineFun (<!NON_LOCAL_RETURN_NOT_ALLOWED!>lambda<!>) }<!>) {
+inline fun default0_2(lambda: () -> String, <!NOT_YET_SUPPORTED_IN_INLINE!>dlambda: () -> String = { noInlineFun (<!USAGE_IS_NOT_INLINABLE!>lambda<!>) }<!>) {
     lambda() + dlambda()
 }
 
diff --git a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.txt b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.txt
index c3ac89f084e..1da78d9b9d6 100644
--- a/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.txt
+++ b/compiler/testData/diagnostics/tests/inline/inlineLambdaInDefaultInlineParameterDisabled.txt
@@ -13,4 +13,4 @@ public inline fun default2_1crossinline(/*0*/ crossinline lambda: () -> kotlin.S
 public inline fun default2_2(/*0*/ noinline lambda: () -> kotlin.String, /*1*/ dlambda: () -> kotlin.String = ...): kotlin.Unit
 public inline fun default2_3(/*0*/ noinline lambda: () -> kotlin.String, /*1*/ noinline dlambda: () -> kotlin.String = ...): kotlin.Unit
 public inline fun inlineFun(/*0*/ lambda: () -> kotlin.String): kotlin.String
-public inline fun noInlineFun(/*0*/ lambda: () -> kotlin.String): kotlin.String
+public fun noInlineFun(/*0*/ lambda: () -> kotlin.String): kotlin.String
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxInlineCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxInlineCodegenTestGenerated.java
index b8b0bf391d6..b347a002b34 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxInlineCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxInlineCodegenTestGenerated.java
@@ -1009,6 +1009,12 @@ public class BlackBoxInlineCodegenTestGenerated extends AbstractBlackBoxInlineCo
                 doTest(fileName);
             }
 
+            @TestMetadata("innerClassConstuctorReference.kt")
+            public void testInnerClassConstuctorReference() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/innerClassConstuctorReference.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("instanceCapuredInClass.kt")
             public void testInstanceCapuredInClass() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/instanceCapuredInClass.kt");
@@ -1039,6 +1045,18 @@ public class BlackBoxInlineCodegenTestGenerated extends AbstractBlackBoxInlineCo
                 doTest(fileName);
             }
 
+            @TestMetadata("privateFunctionReference.kt")
+            public void testPrivateFunctionReference() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privateFunctionReference.kt");
+                doTest(fileName);
+            }
+
+            @TestMetadata("privatePropertyReference.kt")
+            public void testPrivatePropertyReference() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privatePropertyReference.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("propertyImportedFromObject.kt")
             public void testPropertyImportedFromObject() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/propertyImportedFromObject.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstInlineKotlinTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstInlineKotlinTestGenerated.java
index 9f15be9028f..6fb8e0b239c 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstInlineKotlinTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstInlineKotlinTestGenerated.java
@@ -1009,6 +1009,12 @@ public class CompileKotlinAgainstInlineKotlinTestGenerated extends AbstractCompi
                 doTest(fileName);
             }
 
+            @TestMetadata("innerClassConstuctorReference.kt")
+            public void testInnerClassConstuctorReference() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/innerClassConstuctorReference.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("instanceCapuredInClass.kt")
             public void testInstanceCapuredInClass() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/instanceCapuredInClass.kt");
@@ -1039,6 +1045,18 @@ public class CompileKotlinAgainstInlineKotlinTestGenerated extends AbstractCompi
                 doTest(fileName);
             }
 
+            @TestMetadata("privateFunctionReference.kt")
+            public void testPrivateFunctionReference() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privateFunctionReference.kt");
+                doTest(fileName);
+            }
+
+            @TestMetadata("privatePropertyReference.kt")
+            public void testPrivatePropertyReference() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/privatePropertyReference.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("propertyImportedFromObject.kt")
             public void testPropertyImportedFromObject() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/codegen/boxInline/defaultValues/lambdaInlining/propertyImportedFromObject.kt");