diff --git a/plugins/IntentionPowerPak/src/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntention.java b/plugins/IntentionPowerPak/src/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntention.java
index 8a339bb62d49..4dd389fd6791 100644
--- a/plugins/IntentionPowerPak/src/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntention.java
+++ b/plugins/IntentionPowerPak/src/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntention.java
@@ -91,7 +91,7 @@ public class ReplaceLambdaWithAnonymousIntention extends Intention {
       final PsiLambdaExpression lambdaExpression = PsiTreeUtil.getParentOfType(element, PsiLambdaExpression.class);
       if (lambdaExpression != null && PsiTreeUtil.isAncestor(lambdaExpression.getParameterList(), element, false)) {
         final PsiType functionalInterfaceType = lambdaExpression.getFunctionalInterfaceType();
-        return functionalInterfaceType != null && LambdaUtil.getFunctionalInterfaceMethod(functionalInterfaceType) != null;
+        return functionalInterfaceType != null && LambdaUtil.getFunctionalInterfaceMethod(functionalInterfaceType) != null && LambdaUtil.isLambdaFullyInferred(lambdaExpression, functionalInterfaceType);
       }
       return false;
     }
diff --git a/plugins/IntentionPowerPak/test/com/siyeh/ipp/types/lambda2anonymous/CyclicInference.java b/plugins/IntentionPowerPak/test/com/siyeh/ipp/types/lambda2anonymous/CyclicInference.java
new file mode 100644
index 000000000000..981d5e6b04cd
--- /dev/null
+++ b/plugins/IntentionPowerPak/test/com/siyeh/ipp/types/lambda2anonymous/CyclicInference.java
@@ -0,0 +1,13 @@
+class Test2 {
+    class Y<T>{}
+    
+    interface I<X> {
+        X foo(Y<X> list);
+    }
+
+    static <T> I<T> bar(I<T> i){return i;}
+
+    {
+        bar(<caret>x -> x);
+    }
+}
\ No newline at end of file
diff --git a/plugins/IntentionPowerPak/testSrc/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntentionTest.java b/plugins/IntentionPowerPak/testSrc/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntentionTest.java
index 191ae96fe5a7..7aa62f3fe353 100644
--- a/plugins/IntentionPowerPak/testSrc/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntentionTest.java
+++ b/plugins/IntentionPowerPak/testSrc/com/siyeh/ipp/types/ReplaceLambdaWithAnonymousIntentionTest.java
@@ -27,6 +27,10 @@ public class ReplaceLambdaWithAnonymousIntentionTest extends IPPTestCase {
     doTest();
   }
 
+  public void testCyclicInference() {
+    assertIntentionNotAvailable();
+  }
+
   public void testNoFunctionalInterfaceFound() {
     assertIntentionNotAvailable();
   }