diff --git a/java/java-impl/src/com/intellij/refactoring/inline/InlineLocalHandler.java b/java/java-impl/src/com/intellij/refactoring/inline/InlineLocalHandler.java
index 07b63f7d0003..4b5f32ccf1b5 100644
--- a/java/java-impl/src/com/intellij/refactoring/inline/InlineLocalHandler.java
+++ b/java/java-impl/src/com/intellij/refactoring/inline/InlineLocalHandler.java
@@ -16,6 +16,7 @@
  */
 package com.intellij.refactoring.inline;
 
+import com.intellij.codeInsight.ExceptionUtil;
 import com.intellij.codeInsight.TargetElementUtilBase;
 import com.intellij.codeInsight.highlighting.HighlightManager;
 import com.intellij.codeInsight.intention.QuickFixFactory;
@@ -153,6 +154,12 @@ public class InlineLocalHandler extends JavaInlineActionHandler {
       return;
     }
 
+    PsiTryStatement tryStatement = PsiTreeUtil.getParentOfType(defToInline, PsiTryStatement.class);
+    if (tryStatement != null) {
+      if (ExceptionUtil.getThrownExceptions(defToInline).isEmpty()) {
+        tryStatement = null;
+      }
+    }
     PsiFile workingFile = local.getContainingFile();
     for (PsiElement ref : refsToInline) {
       final PsiFile otherFile = ref.getContainingFile();
@@ -161,6 +168,10 @@ public class InlineLocalHandler extends JavaInlineActionHandler {
         CommonRefactoringUtil.showErrorHint(project, editor, message, REFACTORING_NAME, HelpID.INLINE_VARIABLE);
         return;
       }
+      if (tryStatement != null && !PsiTreeUtil.isAncestor(tryStatement, ref, false)) {
+        CommonRefactoringUtil.showErrorHint(project, editor, "Unable to inline outside try/catch statement", REFACTORING_NAME, HelpID.INLINE_VARIABLE);
+        return;
+      }
     }
 
     for (final PsiElement ref : refsToInline) {
diff --git a/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatch.java b/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatch.java
new file mode 100644
index 000000000000..8c224240f414
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatch.java
@@ -0,0 +1,18 @@
+import java.io.*;
+
+class Test {
+  private static InputStream getInputUnchecked() throws IOException {
+    InputStream in;
+    try {
+      in = ff();
+    }
+    catch (IOException e) {
+      throw new IOException();
+    }
+    return i<caret>n;
+  }
+
+  static InputStream ff() throws IOException {
+    return null;
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatchAvailable.java b/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatchAvailable.java
new file mode 100644
index 000000000000..41164ea97600
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatchAvailable.java
@@ -0,0 +1,15 @@
+import java.io.*;
+
+class Test {
+  private static InputStream getInputUnchecked(InputStream inputSupplier) throws IOException {
+    InputStream in;
+    try {
+      in = null;
+    }
+    catch (IOException e) {
+      throw new IOException();
+    }
+    return i<caret>n;
+  }
+
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatchAvailable.java.after b/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatchAvailable.java.after
new file mode 100644
index 000000000000..1853d8acca74
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineLocal/InlineFromTryCatchAvailable.java.after
@@ -0,0 +1,13 @@
+import java.io.*;
+
+class Test {
+  private static InputStream getInputUnchecked(InputStream inputSupplier) throws IOException {
+      try {
+      }
+    catch (IOException e) {
+      throw new IOException();
+    }
+    return null;
+  }
+
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java
index 7cd884aab33c..e312ee81defa 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java
@@ -147,6 +147,14 @@ public class InlineLocalTest extends LightCodeInsightTestCase {
     doTest(false, "Cannot perform refactoring.\n" +
                   "Variable 'x' is accessed for writing.");
   }
+
+  public void testInlineFromTryCatch() throws Exception {
+    doTest(true, "Unable to inline outside try/catch statement");
+  }
+  
+  public void testInlineFromTryCatchAvailable() throws Exception {
+    doTest(true);
+  }
   
   public void testConditionExpr() throws Exception {
     doTest(true);