diff --git a/.idea/runConfigurations/IDEA__No_ProcessCanceledException_.xml b/.idea/runConfigurations/IDEA__No_ProcessCanceledException_.xml
index 58141b697da..63d5ea84434 100644
--- a/.idea/runConfigurations/IDEA__No_ProcessCanceledException_.xml
+++ b/.idea/runConfigurations/IDEA__No_ProcessCanceledException_.xml
@@ -16,7 +16,9 @@
       <option name="TRANSPORT" value="0" />
       <option name="LOCAL" value="true" />
     </RunnerSettings>
+    <RunnerSettings RunnerId="Run" />
     <ConfigurationWrapper RunnerId="Debug" />
+    <ConfigurationWrapper RunnerId="Run" />
     <method />
   </configuration>
 </component>
\ No newline at end of file
diff --git a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java
index 3cb42d49616..133ccc22a8c 100644
--- a/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java
+++ b/compiler/frontend.java/src/org/jetbrains/jet/lang/resolve/java/JavaDescriptorResolver.java
@@ -6,70 +6,25 @@ import com.google.common.collect.Sets;
 import com.intellij.openapi.project.Project;
 import com.intellij.openapi.util.Pair;
 import com.intellij.openapi.vfs.VirtualFile;
-import com.intellij.psi.JavaPsiFacade;
-import com.intellij.psi.PsiArrayType;
-import com.intellij.psi.PsiClass;
-import com.intellij.psi.PsiClassType;
-import com.intellij.psi.PsiElement;
-import com.intellij.psi.PsiEllipsisType;
-import com.intellij.psi.PsiJavaFile;
-import com.intellij.psi.PsiMethod;
-import com.intellij.psi.PsiModifier;
-import com.intellij.psi.PsiModifierListOwner;
-import com.intellij.psi.PsiPackage;
-import com.intellij.psi.PsiPrimitiveType;
-import com.intellij.psi.PsiType;
-import com.intellij.psi.PsiTypeParameter;
-import com.intellij.psi.PsiTypeParameterListOwner;
-import com.intellij.psi.PsiTypeVariable;
-import com.intellij.psi.impl.source.PsiClassReferenceType;
+import com.intellij.psi.*;
 import com.intellij.psi.search.DelegatingGlobalSearchScope;
 import com.intellij.psi.search.GlobalSearchScope;
 import jet.typeinfo.TypeInfoVariance;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
-import org.jetbrains.jet.lang.descriptors.ClassDescriptor;
-import org.jetbrains.jet.lang.descriptors.ClassKind;
-import org.jetbrains.jet.lang.descriptors.ConstructorDescriptorImpl;
-import org.jetbrains.jet.lang.descriptors.DeclarationDescriptor;
-import org.jetbrains.jet.lang.descriptors.DeclarationDescriptorImpl;
-import org.jetbrains.jet.lang.descriptors.DeclarationDescriptorVisitor;
-import org.jetbrains.jet.lang.descriptors.FunctionDescriptor;
-import org.jetbrains.jet.lang.descriptors.Modality;
-import org.jetbrains.jet.lang.descriptors.MutableClassDescriptorLite;
-import org.jetbrains.jet.lang.descriptors.NamedFunctionDescriptorImpl;
-import org.jetbrains.jet.lang.descriptors.NamespaceDescriptor;
-import org.jetbrains.jet.lang.descriptors.PropertyDescriptor;
-import org.jetbrains.jet.lang.descriptors.PropertyGetterDescriptor;
-import org.jetbrains.jet.lang.descriptors.PropertySetterDescriptor;
-import org.jetbrains.jet.lang.descriptors.TypeParameterDescriptor;
-import org.jetbrains.jet.lang.descriptors.ValueParameterDescriptor;
-import org.jetbrains.jet.lang.descriptors.ValueParameterDescriptorImpl;
-import org.jetbrains.jet.lang.descriptors.VariableDescriptor;
-import org.jetbrains.jet.lang.descriptors.Visibility;
+import org.jetbrains.jet.lang.descriptors.*;
 import org.jetbrains.jet.lang.descriptors.annotations.AnnotationDescriptor;
 import org.jetbrains.jet.lang.resolve.BindingContext;
 import org.jetbrains.jet.lang.resolve.DescriptorUtils;
 import org.jetbrains.jet.lang.resolve.java.kt.JetClassAnnotation;
-import org.jetbrains.jet.lang.types.JetStandardClasses;
-import org.jetbrains.jet.lang.types.JetType;
-import org.jetbrains.jet.lang.types.TypeSubstitutor;
-import org.jetbrains.jet.lang.types.TypeUtils;
-import org.jetbrains.jet.lang.types.Variance;
+import org.jetbrains.jet.lang.types.*;
 import org.jetbrains.jet.plugin.JetFileType;
 import org.jetbrains.jet.rt.signature.JetSignatureAdapter;
 import org.jetbrains.jet.rt.signature.JetSignatureExceptionsAdapter;
 import org.jetbrains.jet.rt.signature.JetSignatureReader;
 import org.jetbrains.jet.rt.signature.JetSignatureVisitor;
 
-import java.util.ArrayList;
-import java.util.Collection;
-import java.util.Collections;
-import java.util.HashMap;
-import java.util.HashSet;
-import java.util.List;
-import java.util.Map;
-import java.util.Set;
+import java.util.*;
 
 /**
  * @author abreslav
@@ -235,7 +190,7 @@ public class JavaDescriptorResolver {
 
         String name = psiClass.getName();
         ResolverClassData classData = new ResolverClassData();
-        ClassKind kind = psiClass.isInterface() ? ClassKind.TRAIT : ClassKind.CLASS;
+        ClassKind kind = psiClass.isInterface() ? (psiClass.isAnnotationType() ? ClassKind.ANNOTATION_CLASS : ClassKind.TRAIT) : ClassKind.CLASS;
         classData.classDescriptor = new MutableClassDescriptorLite(
                 resolveParentDescriptor(psiClass), kind
         );
@@ -288,7 +243,7 @@ public class JavaDescriptorResolver {
             // Example:
             // class Kotlin() : Java() {}
             // abstract public class Java {}
-            if (!psiClass.isInterface()) {
+            if (!psiClass.isInterface() || psiClass.isAnnotationType()) {
                 ConstructorDescriptorImpl constructorDescriptor = new ConstructorDescriptorImpl(
                         classData.classDescriptor,
                         Collections.<AnnotationDescriptor>emptyList(),
diff --git a/compiler/testData/diagnostics/tests/annotations/BasicAnnotations.kt b/compiler/testData/diagnostics/tests/annotations/BasicAnnotations.kt
new file mode 100644
index 00000000000..98bd29f078e
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/annotations/BasicAnnotations.kt
@@ -0,0 +1,10 @@
+annotation class my
+annotation class my1(i : Int)
+annotation class my2(i : Int = 0)
+
+my fun foo() {}
+<!NO_VALUE_FOR_PARAMETER!>my1<!> fun foo2() {}
+my1(2) fun foo3() {}
+my2() fun foo4() {}
+my2 fun foo41() {}
+my2(2) fun foo42() {}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/annotations/Deprecated.jet b/compiler/testData/diagnostics/tests/annotations/Deprecated.jet
new file mode 100644
index 00000000000..9cff9bb8dc0
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/annotations/Deprecated.jet
@@ -0,0 +1,7 @@
+// +JDK
+
+import java.lang.Deprecated as deprecated
+
+Deprecated fun foo() {}
+
+deprecated fun foo1() {}