diff --git a/java/java-impl/src/com/intellij/refactoring/inline/InlineToAnonymousConstructorProcessor.java b/java/java-impl/src/com/intellij/refactoring/inline/InlineToAnonymousConstructorProcessor.java
index d826d9998d59..7ce79aef8a64 100644
--- a/java/java-impl/src/com/intellij/refactoring/inline/InlineToAnonymousConstructorProcessor.java
+++ b/java/java-impl/src/com/intellij/refactoring/inline/InlineToAnonymousConstructorProcessor.java
@@ -183,7 +183,7 @@ class InlineToAnonymousConstructorProcessor {
         ProcessingContext context = new ProcessingContext();
         if (ourAssignmentPattern.accepts(stmt, context)) {
           PsiAssignmentExpression expression = context.get(ourAssignmentKey);
-          if (!processAssignmentInConstructor(expression)) {
+          if (processAssignmentInConstructor(expression)) {
             initializerBlock.addBefore(replaceParameterReferences(stmt, null, false), initializerBlock.getRBrace());
           }
         }
@@ -205,7 +205,7 @@ class InlineToAnonymousConstructorProcessor {
     if (expression.getLExpression() instanceof PsiReferenceExpression) {
       PsiReferenceExpression lExpr = (PsiReferenceExpression) expression.getLExpression();
       final PsiExpression rExpr = expression.getRExpression();
-      if (rExpr == null) return true;
+      if (rExpr == null) return false;
       final PsiElement psiElement = lExpr.resolve();
       if (psiElement instanceof PsiField) {
         PsiField field = (PsiField) psiElement;
@@ -217,25 +217,20 @@ class InlineToAnonymousConstructorProcessor {
           }
           catch (IncorrectOperationException e) {
             LOG.error(e);
-            return true;
+            return false;
           }
           if (!localVarRefs.isEmpty()) {
-            return false;
+            return true;
           }
 
           myFieldInitializers.put(field.getName(), initializer);
         }
       }
       else if (psiElement instanceof PsiVariable) {
-        try {
-          replaceParameterReferences(rExpr.copy(), new ArrayList<PsiReferenceExpression>(), false);
-        }
-        catch (IncorrectOperationException e) {
-          LOG.error(e);
-        }
+        return true;
       }
     }
-    return true;
+    return false;
   }
 
   public static boolean isConstant(final PsiExpression expr) {
diff --git a/java/java-tests/testData/refactoring/inlineToAnonymousClass/MultipleAssignments.java b/java/java-tests/testData/refactoring/inlineToAnonymousClass/MultipleAssignments.java
new file mode 100644
index 000000000000..2725dd79cd8c
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineToAnonymousClass/MultipleAssignments.java
@@ -0,0 +1,20 @@
+public class WithCtor {
+	private int myInt = 8;
+	private String myString = "Sashya";
+
+	public WithCtor() {
+	}
+
+	public WithCtor(int anInt, String string) {
+		int i = 2;
+		i = 3;
+		myInt = i + anInt;
+		int j = 4;
+		j = 5;
+		myString = string.substring(j);
+	}
+}
+
+class Usage {
+  private WithCtor wc1 = new With<caret>Ctor(17, "Sa");
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/inlineToAnonymousClass/MultipleAssignments.java.after b/java/java-tests/testData/refactoring/inlineToAnonymousClass/MultipleAssignments.java.after
new file mode 100644
index 000000000000..c7885a80e38d
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineToAnonymousClass/MultipleAssignments.java.after
@@ -0,0 +1,15 @@
+class Usage {
+  private Object wc1 = new Object() {
+      private int myInt = 8;
+      private String myString = "Sashya";
+
+      {
+          int i = 2;
+          i = 3;
+          myInt = i + 17;
+          int j = 4;
+          j = 5;
+          myString = "Sa".substring(j);
+      }
+  };
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineToAnonymousClassTest.java b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineToAnonymousClassTest.java
index 4cc25d09a6c7..61c8e144f56c 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineToAnonymousClassTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineToAnonymousClassTest.java
@@ -218,6 +218,10 @@ public class InlineToAnonymousClassTest extends LightCodeInsightTestCase {
     doTest(false, true);
   }
 
+  public void testMultipleAssignments() throws Exception {
+    doTest(false, true);
+  }
+
   public void testNoInlineAbstract() throws Exception {
     doTestNoInline("Abstract classes cannot be inlined");
   }