diff --git a/java/java-impl/src/com/intellij/codeInsight/CodeInsightUtil.java b/java/java-impl/src/com/intellij/codeInsight/CodeInsightUtil.java
index 087332254ec8..91f27452f355 100644
--- a/java/java-impl/src/com/intellij/codeInsight/CodeInsightUtil.java
+++ b/java/java-impl/src/com/intellij/codeInsight/CodeInsightUtil.java
@@ -26,6 +26,7 @@ import com.intellij.openapi.progress.ProgressManager;
 import com.intellij.openapi.project.Project;
 import com.intellij.openapi.util.TextRange;
 import com.intellij.psi.*;
+import com.intellij.psi.scope.PsiScopeProcessor;
 import com.intellij.psi.search.GlobalSearchScope;
 import com.intellij.psi.search.searches.ClassInheritorsSearch;
 import com.intellij.psi.tree.IElementType;
@@ -326,10 +327,12 @@ public class CodeInsightUtil {
 
     if (baseClass.hasModifierProperty(PsiModifier.FINAL)) return;
 
+    Set<PsiClass> imported = processImportedInheritors(context, baseClass, inheritorsProcessor);
+
     if (matcher.getPrefix().length() > 2) {
       JBTreeTraverser<PsiClass> traverser = JBTreeTraverser.of(PsiClass::getInnerClasses);
       AllClassesGetter.processJavaClasses(matcher, context.getProject(), scope, psiClass -> {
-        Iterable<PsiClass> inheritors = traverser.withRoot(psiClass).filter(c -> c.isInheritor(baseClass, true));
+        Iterable<PsiClass> inheritors = traverser.withRoot(psiClass).filter(c -> c.isInheritor(baseClass, true) && !imported.contains(c));
         return ContainerUtil.process(inheritors, inheritorsProcessor);
       });
     }
@@ -337,11 +340,28 @@ public class CodeInsightUtil {
       Query<PsiClass> baseQuery = ClassInheritorsSearch.search(baseClass, scope, true, true, false);
       Query<PsiClass> query = new FilteredQuery<>(baseQuery, psiClass ->
         !(psiClass instanceof PsiTypeParameter) &&
-        ContainerUtil.exists(JavaCompletionUtil.getAllLookupStrings(psiClass), matcher::prefixMatches));
+        ContainerUtil.exists(JavaCompletionUtil.getAllLookupStrings(psiClass), matcher::prefixMatches) &&
+        !imported.contains(psiClass));
       query.forEach(inheritorsProcessor);
     }
   }
 
+  @NotNull
+  private static Set<PsiClass> processImportedInheritors(PsiElement context, PsiClass baseClass, Processor<PsiClass> inheritorsProcessor) {
+    Set<PsiClass> visited = new HashSet<>();
+
+    context.getContainingFile().getOriginalFile().processDeclarations(new PsiScopeProcessor() {
+      @Override
+      public boolean execute(@NotNull PsiElement element, @NotNull ResolveState state) {
+        if (element instanceof PsiClass && ((PsiClass)element).isInheritor(baseClass, true) && visited.add((PsiClass)element)) {
+          return inheritorsProcessor.process((PsiClass)element);
+        }
+        return true;
+      }
+    }, ResolveState.initial(), null, context);
+    return visited;
+  }
+
   private static void addContextTypeArguments(PsiElement context, PsiClassType baseType, Processor<PsiClass> inheritorsProcessor) {
     Set<String> usedNames = ContainerUtil.newHashSet();
     PsiElementFactory factory = JavaPsiFacade.getElementFactory(context.getProject());
diff --git a/java/java-impl/src/com/intellij/psi/filters/getters/ClassLiteralLookupElement.java b/java/java-impl/src/com/intellij/psi/filters/getters/ClassLiteralLookupElement.java
index 65a0bd9da3b1..04927aa2ac05 100644
--- a/java/java-impl/src/com/intellij/psi/filters/getters/ClassLiteralLookupElement.java
+++ b/java/java-impl/src/com/intellij/psi/filters/getters/ClassLiteralLookupElement.java
@@ -32,13 +32,17 @@ import org.jetbrains.annotations.Nullable;
 /**
  * @author peter
  */
-public class ClassLiteralLookupElement extends LookupElement implements TypedLookupItem {
+class ClassLiteralLookupElement extends LookupElement implements TypedLookupItem {
   @NonNls private static final String DOT_CLASS = ".class";
+  @Nullable private final SmartPsiElementPointer<PsiClass> myClass;
   private final PsiExpression myExpr;
   private final String myPresentableText;
   private final String myCanonicalText;
 
-  public ClassLiteralLookupElement(PsiClassType type, PsiElement context) {
+  ClassLiteralLookupElement(PsiClassType type, PsiElement context) {
+    PsiClass psiClass = PsiUtil.resolveClassInType(type);
+    myClass = psiClass == null ? null : SmartPointerManager.createPointer(psiClass);
+    
     myCanonicalText = type.getCanonicalText();
     myPresentableText = type.getPresentableText();
     myExpr = JavaPsiFacade.getInstance(context.getProject()).getElementFactory().createExpressionFromText(myCanonicalText + DOT_CLASS, context);
@@ -63,7 +67,7 @@ public class ClassLiteralLookupElement extends LookupElement implements TypedLoo
   @Nullable
   @Override
   public PsiElement getPsiElement() {
-    return PsiUtil.resolveClassInType(getType());
+    return myClass == null ? null : myClass.getElement();
   }
 
   @NotNull
diff --git a/java/java-tests/testData/codeInsight/completion/smartType/ConsiderClassProximityForClassLiterals.java b/java/java-tests/testData/codeInsight/completion/smartType/ConsiderClassProximityForClassLiterals.java
new file mode 100644
index 000000000000..5d67d66d1504
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/completion/smartType/ConsiderClassProximityForClassLiterals.java
@@ -0,0 +1,11 @@
+class X {
+
+  <T> void foo(Class<T> c) {
+
+  }
+
+  {
+    foo(Str<caret>)
+  }
+
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/SmartType18CompletionTest.java b/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/SmartType18CompletionTest.java
index 8c7df94b7bd1..c40fae768d8c 100644
--- a/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/SmartType18CompletionTest.java
+++ b/java/java-tests/testSrc/com/intellij/java/codeInsight/completion/SmartType18CompletionTest.java
@@ -275,4 +275,8 @@ public void testConvertToObjectStream() {
     myFixture.assertPreferredCompletionItems(2, "SortedMap", "NavigableMap", "TreeMap", "ConcurrentNavigableMap", "ConcurrentSkipListMap");
   }
 
+  public void testConsiderClassProximityForClassLiterals() {
+    configureByTestName();
+    myFixture.assertPreferredCompletionItems(0, "String.class");
+  }
 }