diff --git a/java/java-impl/src/com/intellij/codeInsight/intention/impl/SurroundAutoCloseableAction.java b/java/java-impl/src/com/intellij/codeInsight/intention/impl/SurroundAutoCloseableAction.java
index ac5df759aeb2..d5707a284b48 100644
--- a/java/java-impl/src/com/intellij/codeInsight/intention/impl/SurroundAutoCloseableAction.java
+++ b/java/java-impl/src/com/intellij/codeInsight/intention/impl/SurroundAutoCloseableAction.java
@@ -23,13 +23,17 @@ import com.intellij.openapi.project.Project;
 import com.intellij.pom.java.LanguageLevel;
 import com.intellij.psi.*;
 import com.intellij.psi.codeStyle.CodeStyleManager;
+import com.intellij.psi.search.LocalSearchScope;
 import com.intellij.psi.search.ProjectScope;
+import com.intellij.psi.search.searches.ReferencesSearch;
 import com.intellij.psi.util.InheritanceUtil;
 import com.intellij.psi.util.PsiTreeUtil;
 import com.intellij.psi.util.PsiUtil;
 import com.intellij.util.IncorrectOperationException;
 import org.jetbrains.annotations.NotNull;
 
+import java.util.Collection;
+
 public class SurroundAutoCloseableAction extends PsiElementBaseIntentionAction {
   @Override
   public boolean isAvailable(@NotNull final Project project, final Editor editor, @NotNull final PsiElement element) {
@@ -66,17 +70,39 @@ public class SurroundAutoCloseableAction extends PsiElementBaseIntentionAction {
     final PsiElement codeBlock = declaration.getParent();
     if (!(codeBlock instanceof PsiCodeBlock)) return;
 
+    PsiElement firstStatement = declaration.getNextSibling(), lastUsage = null;
+    final Collection<PsiReference> references = ReferencesSearch.search(variable, new LocalSearchScope(codeBlock)).findAll();
+    for (PsiReference reference : references) {
+      final PsiElement statement = PsiTreeUtil.findPrevParent(codeBlock, reference.getElement());
+      if ((lastUsage == null || statement.getTextOffset() > lastUsage.getTextOffset())) {
+        lastUsage = statement;
+      }
+    }
+
     final String text = "try (" + variable.getTypeElement().getText() + " " + variable.getName() + " = " + initializer.getText() + ") {}";
     final PsiElementFactory factory = JavaPsiFacade.getElementFactory(project);
     final PsiStatement armStatement = factory.createStatementFromText(text, codeBlock);
     final PsiElement newElement = declaration.replace(armStatement);
 
+    if (firstStatement != null && lastUsage != null) {
+      final PsiCodeBlock tryBlock = ((PsiTryStatement)newElement).getTryBlock();
+      assert tryBlock != null : newElement.getText();
+      final PsiJavaToken rBrace = tryBlock.getRBrace();
+      assert rBrace != null : newElement.getText();
+
+      tryBlock.addRangeBefore(firstStatement, lastUsage, rBrace);
+      codeBlock.deleteChildRange(firstStatement, lastUsage);
+    }
+
     final PsiElement formattedElement = CodeStyleManager.getInstance(project).reformat(newElement);
-    final PsiCodeBlock tryBlock = ((PsiTryStatement)formattedElement).getTryBlock();
-    if (tryBlock != null) {
-      final PsiJavaToken brace = tryBlock.getLBrace();
-      if (brace != null) {
-        editor.getCaretModel().moveToOffset(brace.getTextOffset() + 1);
+
+    if (lastUsage == null) {
+      final PsiCodeBlock tryBlock = ((PsiTryStatement)formattedElement).getTryBlock();
+      if (tryBlock != null) {
+        final PsiJavaToken brace = tryBlock.getLBrace();
+        if (brace != null) {
+          editor.getCaretModel().moveToOffset(brace.getTextOffset() + 1);
+        }
       }
     }
   }
diff --git a/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage.java b/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage.java
index 03083fc533ea..b34beda14116 100644
--- a/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage.java
+++ b/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage.java
@@ -5,6 +5,11 @@ import java.io.IOException;
 class C {
     void m(File file) throws IOException {
         <caret>FileInputStream fileInputStream = new FileInputStream(file);
-        int read = fileInputStream.read();
+        int read;
+        do {
+            read = fileInputStream.read();
+            System.out.println(read);
+        }
+        while (read != -1);
     }
 }
diff --git a/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage_after.java b/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage_after.java
index 5916d01bace8..458e331b7f8f 100644
--- a/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage_after.java
+++ b/java/java-tests/testData/codeInsight/surroundAutoCloseable/Usage_after.java
@@ -5,7 +5,12 @@ import java.io.IOException;
 class C {
     void m(File file) throws IOException {
         try (FileInputStream fileInputStream = new FileInputStream(file)) {
-            int read = fileInputStream.read();
+            int read;
+            do {
+                read = fileInputStream.read();
+                System.out.println(read);
+            }
+            while (read != -1);
         }
     }
 }
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/intention/SurroundAutoCloseableActionTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/intention/SurroundAutoCloseableActionTest.java
index 37787bad599e..92c34f8371c7 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/intention/SurroundAutoCloseableActionTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/intention/SurroundAutoCloseableActionTest.java
@@ -37,7 +37,7 @@ public class SurroundAutoCloseableActionTest extends JavaCodeInsightFixtureTestC
   }
 
   public void testSimple() { doTest(); }
-  //public void testUsage() { doTest(); }
+  public void testUsage() { doTest(); }
 
   private void doTest() {
     String name = getTestName(false);