diff --git a/java/java-impl/src/com/intellij/refactoring/extractMethodObject/ExtractLightMethodObjectHandler.java b/java/java-impl/src/com/intellij/refactoring/extractMethodObject/ExtractLightMethodObjectHandler.java
index 5a7e5ca64ea1..ad7f135a340f 100644
--- a/java/java-impl/src/com/intellij/refactoring/extractMethodObject/ExtractLightMethodObjectHandler.java
+++ b/java/java-impl/src/com/intellij/refactoring/extractMethodObject/ExtractLightMethodObjectHandler.java
@@ -79,7 +79,7 @@ public class ExtractLightMethodObjectHandler {
                                                        final PsiFile file,
                                                        @NotNull final PsiCodeFragment fragment,
                                                        final String methodName) throws PrepareFailedException {
-    final PsiElement[] elements = fragment.getChildren();
+    final PsiElement[] elements = CodeInsightUtil.findStatementsInRange(fragment, 0, fragment.getTextLength());
     if (elements.length == 0) {
       return null;
     }
@@ -96,12 +96,11 @@ public class ExtractLightMethodObjectHandler {
       CodeInsightUtil.findElementInRange(copy, range.getStartOffset(), range.getEndOffset(), originalContext.getClass());
     //todo before this or super, not found etc
     final PsiElement anchor = RefactoringUtil.getParentStatement(originalAnchor, false);
-    final PsiElement[] elementsCopy = new PsiElement[elements.length];
     final PsiElement container = anchor.getParent();
-    elementsCopy[0] = container.addRangeBefore(elements[0], elements[elements.length - 1], anchor);
-    for (int i = 1; i < elements.length; i++) {
-      elementsCopy[i] = elementsCopy[i - 1].getNextSibling();
-    }
+    final PsiElement firstElementCopy = container.addRangeBefore(elements[0], elements[elements.length - 1], anchor);
+    final PsiElement[] elementsCopy = CodeInsightUtil.findStatementsInRange(copy,
+                                                                            firstElementCopy.getTextRange().getStartOffset(),
+                                                                            anchor.getTextRange().getStartOffset());
 
     final int start = elementsCopy[0].getTextRange().getStartOffset();
 
diff --git a/java/java-tests/testData/refactoring/extractMethodObject4Debugger/InnerClass.java b/java/java-tests/testData/refactoring/extractMethodObject4Debugger/InnerClass.java
new file mode 100644
index 000000000000..448724bf0543
--- /dev/null
+++ b/java/java-tests/testData/refactoring/extractMethodObject4Debugger/InnerClass.java
@@ -0,0 +1,30 @@
+/*
+ * Copyright 2000-2014 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+class Sample {
+
+  void a() {
+    System.out.println("<caret>");
+  }
+
+  class I {
+    public I(int i) {
+    }
+
+    void foo() {
+      bar();
+    }
+  }
+}
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/ExtractMethodObject4DebuggerTest.java b/java/java-tests/testSrc/com/intellij/refactoring/ExtractMethodObject4DebuggerTest.java
index ea22976efee0..3ef46c33fbb3 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/ExtractMethodObject4DebuggerTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/ExtractMethodObject4DebuggerTest.java
@@ -112,6 +112,18 @@ public class ExtractMethodObject4DebuggerTest extends LightRefactoringTestCase {
            "    }");
   }
 
+  public void testInnerClass() throws Exception {
+    doTest("   new In(2).foo()", "new Test().invoke();",
+
+           "public class Test {\n" +
+           "        public void invoke() {\n" +
+           "            new In(2).foo()\n" +
+           "        }\n" +
+           "    }");
+  }
+
+
+
   @Override
   protected Sdk getProjectJDK() {
     return IdeaTestUtil.getMockJdk18();