diff --git a/python/src/com/jetbrains/python/formatter/PyBlock.java b/python/src/com/jetbrains/python/formatter/PyBlock.java
index 5ed7a2eb81e0..f934beb0b646 100644
--- a/python/src/com/jetbrains/python/formatter/PyBlock.java
+++ b/python/src/com/jetbrains/python/formatter/PyBlock.java
@@ -398,7 +398,16 @@ public class PyBlock implements ASTBlock {
         return !PyTokenTypes.CLOSE_BRACES.contains(elem.getLastChild().getNode().getElementType());
       }
       else {
-        return hasHangingIndent(items[0]);
+        final PsiElement firstItem = items[0];
+        if (firstItem instanceof PyNamedParameter) {
+          final PyExpression defaultValue = ((PyNamedParameter)firstItem).getDefaultValue();
+          return defaultValue != null && hasHangingIndent(defaultValue);
+        }
+        else if (firstItem instanceof PyKeywordArgument) {
+          final PyExpression valueExpression = ((PyKeywordArgument)firstItem).getValueExpression();
+          return valueExpression != null && hasHangingIndent(valueExpression);
+        }
+        return hasHangingIndent(firstItem);
       }
     }
     else {
diff --git a/python/testData/formatter/hangingIndentInNamedArgumentValue.py b/python/testData/formatter/hangingIndentInNamedArgumentValue.py
new file mode 100644
index 000000000000..1102984b4b98
--- /dev/null
+++ b/python/testData/formatter/hangingIndentInNamedArgumentValue.py
@@ -0,0 +1,3 @@
+funcWithLongName(x=[
+],
+        y=42)
diff --git a/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py b/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py
new file mode 100644
index 000000000000..4585528e01cd
--- /dev/null
+++ b/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py
@@ -0,0 +1,3 @@
+funcWithLongName(x=[
+],
+    y=42)
diff --git a/python/testData/formatter/hangingIndentInParameterDefaultValue.py b/python/testData/formatter/hangingIndentInParameterDefaultValue.py
new file mode 100644
index 000000000000..0c42daaf8bea
--- /dev/null
+++ b/python/testData/formatter/hangingIndentInParameterDefaultValue.py
@@ -0,0 +1,5 @@
+def funcWithLongName(x=[
+
+],
+             y=42):
+    pass
diff --git a/python/testData/formatter/hangingIndentInParameterDefaultValue_after.py b/python/testData/formatter/hangingIndentInParameterDefaultValue_after.py
new file mode 100644
index 000000000000..ee9c0c8476c8
--- /dev/null
+++ b/python/testData/formatter/hangingIndentInParameterDefaultValue_after.py
@@ -0,0 +1,5 @@
+def funcWithLongName(x=[
+
+],
+        y=42):
+    pass
diff --git a/python/testSrc/com/jetbrains/python/PyFormatterTest.java b/python/testSrc/com/jetbrains/python/PyFormatterTest.java
index d558a9f1b4c8..ea0e917b9673 100644
--- a/python/testSrc/com/jetbrains/python/PyFormatterTest.java
+++ b/python/testSrc/com/jetbrains/python/PyFormatterTest.java
@@ -546,6 +546,14 @@ public class PyFormatterTest extends PyTestCase {
     doTest();
   }
 
+  public void testHangingIndentInNamedArgumentValue() {
+    doTest();
+  }
+
+  public void testHangingIndentInParameterDefaultValue() {
+    doTest();
+  }
+
   private CommonCodeStyleSettings getCommonSettings() {
     return settings().getCommonSettings(PythonLanguage.getInstance());
   }