diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/ClassBuilderMode.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/ClassBuilderMode.java
index 2b75a4dc449..1d6dfcff082 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/ClassBuilderMode.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/ClassBuilderMode.java
@@ -62,4 +62,12 @@ public class ClassBuilderMode {
             /* bodies = */ false,
             /* metadata = */ true,
             /* sourceRetention = */ true);
+
+    /**
+     * Function signatures + metadata (to support incremental compilation with kapt)
+     */
+    public final static ClassBuilderMode KAPT3 = new ClassBuilderMode(
+            /* bodies = */ false,
+            /* metadata = */ true,
+            /* sourceRetention = */ true);
 }
diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/binding/CodegenAnnotatingVisitor.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/binding/CodegenAnnotatingVisitor.java
index 9c5036abb83..ab59eab0e5f 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/binding/CodegenAnnotatingVisitor.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/binding/CodegenAnnotatingVisitor.java
@@ -41,6 +41,7 @@ import org.jetbrains.kotlin.descriptors.impl.LocalVariableDescriptor;
 import org.jetbrains.kotlin.fileClasses.FileClasses;
 import org.jetbrains.kotlin.fileClasses.JvmFileClassesProvider;
 import org.jetbrains.kotlin.load.java.descriptors.SamConstructorDescriptor;
+import org.jetbrains.kotlin.load.kotlin.TypeMappingConfiguration;
 import org.jetbrains.kotlin.name.Name;
 import org.jetbrains.kotlin.psi.*;
 import org.jetbrains.kotlin.resolve.BindingContext;
@@ -81,6 +82,7 @@ class CodegenAnnotatingVisitor extends KtVisitorVoid {
     private final GenerationState.GenerateClassFilter filter;
     private final JvmRuntimeTypes runtimeTypes;
     private final JvmFileClassesProvider fileClassesProvider;
+    private final TypeMappingConfiguration<Type> typeMappingConfiguration;
 
     public CodegenAnnotatingVisitor(@NotNull GenerationState state) {
         this.bindingTrace = state.getBindingTrace();
@@ -88,6 +90,7 @@ class CodegenAnnotatingVisitor extends KtVisitorVoid {
         this.filter = state.getGenerateDeclaredClassFilter();
         this.runtimeTypes = state.getJvmRuntimeTypes();
         this.fileClassesProvider = state.getFileClassesProvider();
+        this.typeMappingConfiguration = state.getTypeMapper().getTypeMappingConfiguration();
     }
 
     @NotNull
@@ -232,8 +235,12 @@ class CodegenAnnotatingVisitor extends KtVisitorVoid {
     private String getName(ClassDescriptor classDescriptor) {
         String base = peekFromStack(nameStack);
         Name descriptorName = safeIdentifier(classDescriptor.getName());
-        return DescriptorUtils.isTopLevelDeclaration(classDescriptor) ? base.isEmpty() ? descriptorName
-                        .asString() : base + '/' + descriptorName : base + '$' + descriptorName;
+        if (DescriptorUtils.isTopLevelDeclaration(classDescriptor)) {
+            return base.isEmpty() ? descriptorName.asString() : base + '/' + descriptorName;
+        }
+        else {
+            return typeMappingConfiguration.getInnerClassNameFactory().invoke(base, descriptorName.asString());
+        }
     }
 
     @Override
diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/InlineCodegen.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/InlineCodegen.java
index 96be20e292b..c5fe3b6a7f6 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/InlineCodegen.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/inline/InlineCodegen.java
@@ -325,7 +325,7 @@ public class InlineCodegen extends CallGenerator {
         assert callableDescriptor instanceof DeserializedCallableMemberDescriptor : "Not a deserialized function or proper: " + callableDescriptor;
 
         KotlinTypeMapper.ContainingClassesInfo containingClasses =
-                KotlinTypeMapper.getContainingClassesForDeserializedCallable((DeserializedCallableMemberDescriptor) callableDescriptor);
+                state.getTypeMapper().getContainingClassesForDeserializedCallable((DeserializedCallableMemberDescriptor) callableDescriptor);
 
         final ClassId containerId = containingClasses.getImplClassId();
 
diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/state/KotlinTypeMapper.java b/compiler/backend/src/org/jetbrains/kotlin/codegen/state/KotlinTypeMapper.java
index 05a40722295..f363837796e 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/state/KotlinTypeMapper.java
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/state/KotlinTypeMapper.java
@@ -21,6 +21,7 @@ import com.intellij.psi.PsiElement;
 import kotlin.Pair;
 import kotlin.Unit;
 import kotlin.collections.CollectionsKt;
+import kotlin.jvm.functions.Function2;
 import kotlin.jvm.functions.Function3;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
@@ -103,12 +104,32 @@ public class KotlinTypeMapper {
     private final boolean isJvm8Target;
 
     private final TypeMappingConfiguration<Type> typeMappingConfiguration = new TypeMappingConfiguration<Type>() {
+        private final Function2<String, String, String> defaultClassNameFactory
+                = TypeMappingConfiguration.Companion.getDEFAULT_INNER_CLASS_NAME_FACTORY();
+
+        private final Function2<String, String, String> innerClassNameFactory = new Function2<String, String, String>() {
+            @Override
+            public String invoke(String outer, String inner) {
+                if (classBuilderMode == ClassBuilderMode.KAPT3) {
+                    return outer + '/' + inner;
+                }
+
+                return defaultClassNameFactory.invoke(outer, inner);
+            }
+        };
+
         @NotNull
         @Override
         public KotlinType commonSupertype(@NotNull Collection<KotlinType> types) {
             return CommonSupertypes.commonSupertype(types);
         }
 
+        @NotNull
+        @Override
+        public Function2<String, String, String> getInnerClassNameFactory() {
+            return innerClassNameFactory;
+        }
+
         @Nullable
         @Override
         public Type getPredefinedTypeForClass(@NotNull ClassDescriptor classDescriptor) {
@@ -139,6 +160,11 @@ public class KotlinTypeMapper {
         this.isJvm8Target = isJvm8Target;
     }
 
+    @NotNull
+    public TypeMappingConfiguration<Type> getTypeMappingConfiguration() {
+        return typeMappingConfiguration;
+    }
+
     @NotNull
     public BindingContext getBindingContext() {
         return bindingContext;
@@ -250,7 +276,7 @@ public class KotlinTypeMapper {
     }
 
     @NotNull
-    public static ContainingClassesInfo getContainingClassesForDeserializedCallable(
+    public ContainingClassesInfo getContainingClassesForDeserializedCallable(
             @NotNull DeserializedCallableMemberDescriptor deserializedDescriptor
     ) {
         DeclarationDescriptor parentDeclaration = deserializedDescriptor.getContainingDeclaration();
@@ -269,14 +295,16 @@ public class KotlinTypeMapper {
     }
 
     @NotNull
-    private static ClassId getContainerClassIdForClassDescriptor(@NotNull ClassDescriptor classDescriptor) {
+    private ClassId getContainerClassIdForClassDescriptor(@NotNull ClassDescriptor classDescriptor) {
         ClassId classId = DescriptorUtilsKt.getClassId(classDescriptor);
         assert classId != null : "Deserialized class should have a ClassId: " + classDescriptor;
 
         if (isInterface(classDescriptor)) {
             FqName relativeClassName = classId.getRelativeClassName();
             //TODO test nested trait fun inlining
-            return new ClassId(classId.getPackageFqName(), Name.identifier(relativeClassName.shortName().asString() + JvmAbi.DEFAULT_IMPLS_SUFFIX));
+            String defaultImplsClassName = typeMappingConfiguration.getInnerClassNameFactory()
+                    .invoke(relativeClassName.shortName().asString(), JvmAbi.DEFAULT_IMPLS_CLASS_NAME);
+            return new ClassId(classId.getPackageFqName(), Name.identifier(defaultImplsClassName));
         }
 
         return classId;
@@ -437,7 +465,9 @@ public class KotlinTypeMapper {
 
     @NotNull
     public Type mapDefaultImpls(@NotNull ClassDescriptor descriptor) {
-        return Type.getObjectType(mapType(descriptor).getInternalName() + JvmAbi.DEFAULT_IMPLS_SUFFIX);
+        String defaultImplsClassName = typeMappingConfiguration.getInnerClassNameFactory().invoke(
+                mapType(descriptor).getInternalName(), JvmAbi.DEFAULT_IMPLS_CLASS_NAME);
+        return Type.getObjectType(defaultImplsClassName);
     }
 
     @NotNull
diff --git a/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/java/JvmAbi.java b/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/java/JvmAbi.java
index 56156c04917..6984ac27d44 100644
--- a/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/java/JvmAbi.java
+++ b/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/java/JvmAbi.java
@@ -33,6 +33,11 @@ import static org.jetbrains.kotlin.resolve.DescriptorUtils.isCompanionObject;
 
 public final class JvmAbi {
     public static final String DEFAULT_IMPLS_CLASS_NAME = "DefaultImpls";
+
+    /**
+     * Warning: use DEFAULT_IMPLS_CLASS_NAME and TypeMappingConfiguration.innerClassNameFactory when possible.
+     * This is false for KAPT3 mode.
+     */
     public static final String DEFAULT_IMPLS_SUFFIX = "$" + DEFAULT_IMPLS_CLASS_NAME;
     public static final String DEFAULT_IMPLS_DELEGATE_SUFFIX = "$defaultImpl";
 
diff --git a/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/kotlin/typeSignatureMapping.kt b/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/kotlin/typeSignatureMapping.kt
index 0a75c16d8ba..0050c76da9b 100644
--- a/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/kotlin/typeSignatureMapping.kt
+++ b/core/descriptor.loader.java/src/org/jetbrains/kotlin/load/kotlin/typeSignatureMapping.kt
@@ -42,6 +42,13 @@ private fun <T : Any> JvmTypeFactory<T>.boxTypeIfNeeded(possiblyPrimitiveType: T
         if (needBoxedType) boxType(possiblyPrimitiveType) else possiblyPrimitiveType
 
 interface TypeMappingConfiguration<out T : Any> {
+    companion object {
+        val DEFAULT_INNER_CLASS_NAME_FACTORY = fun(outer: String, inner: String) = outer + "$" + inner
+    }
+
+    val innerClassNameFactory: (outer: String, inner: String) -> String
+        get() = DEFAULT_INNER_CLASS_NAME_FACTORY
+
     fun commonSupertype(types: Collection<@JvmSuppressWildcards KotlinType>): KotlinType
     fun getPredefinedTypeForClass(classDescriptor: ClassDescriptor): T?
     fun processErrorType(kotlinType: KotlinType, descriptor: ClassDescriptor)
@@ -126,7 +133,7 @@ fun <T : Any> mapType(
                         factory.javaLangClassType
                     else
                         typeMappingConfiguration.getPredefinedTypeForClass(descriptor.original)
-                        ?: factory.createObjectType(computeInternalName(descriptor.original))
+                        ?: factory.createObjectType(computeInternalName(descriptor.original, typeMappingConfiguration.innerClassNameFactory))
 
             writeGenericType(kotlinType, jvmType, mode)
 
@@ -179,7 +186,10 @@ private fun <T : Any> mapBuiltInType(
     return null
 }
 
-internal fun computeInternalName(klass: ClassDescriptor): String {
+internal fun computeInternalName(
+        klass: ClassDescriptor,
+        innerClassNameFactory: (outer: String, inner: String) -> String = TypeMappingConfiguration.DEFAULT_INNER_CLASS_NAME_FACTORY
+): String {
     val container = klass.containingDeclaration
 
     val name = SpecialNames.safeIdentifier(klass.name).identifier
@@ -190,8 +200,8 @@ internal fun computeInternalName(klass: ClassDescriptor): String {
 
     assert(container is ClassDescriptor) { "Unexpected container: $container for $klass" }
 
-    val containerInternalName = computeInternalName(container as ClassDescriptor)
-    return if (klass.kind == ClassKind.ENUM_ENTRY) containerInternalName else containerInternalName + "$" + name
+    val containerInternalName = computeInternalName(container as ClassDescriptor, innerClassNameFactory)
+    return if (klass.kind == ClassKind.ENUM_ENTRY) containerInternalName else innerClassNameFactory(containerInternalName, name)
 }
 
 private fun getRepresentativeUpperBound(descriptor: TypeParameterDescriptor): KotlinType {