diff --git a/java/java-psi-api/src/com/intellij/psi/util/TypesDistinctProver.java b/java/java-psi-api/src/com/intellij/psi/util/TypesDistinctProver.java
index 820b3ff0c57b..f6200d1f7a91 100644
--- a/java/java-psi-api/src/com/intellij/psi/util/TypesDistinctProver.java
+++ b/java/java-psi-api/src/com/intellij/psi/util/TypesDistinctProver.java
@@ -157,12 +157,17 @@ public final class TypesDistinctProver {
         if (rejectInconsistentRaw && level > 0 &&
             extendsBound1 instanceof PsiClassType && extendsBound2 instanceof PsiClassType &&
             (((PsiClassType)extendsBound1).isRaw() ^ ((PsiClassType)extendsBound2).isRaw())) return true;
+        if (type1.equals(type2)) return false;
+        if (level > 1) return true;
         return proveExtendsBoundsDistinct(type1, type2, boundClass1, boundClass2);
       }
       return provablyDistinct(extendsBound1, extendsBound2, 1);
     }
     if (type2.isExtends()) return provablyDistinct(type2, type1, rejectInconsistentRaw, level);
-    if (type1.isExtends() && !type2.isBounded() && level > 1) return PsiUtil.resolveClassInType(type1.getExtendsBound()) instanceof PsiTypeParameter;
+    if (type1.isExtends() && !type2.isBounded() && level > 1) {
+      PsiType bound = type1.getExtendsBound();
+      return bound instanceof PsiClassType || bound instanceof PsiArrayType;
+    }
     if (type1.isExtends() && type2.isSuper()) {
       final PsiType extendsBound = type1.getExtendsBound();
       final PsiType superBound = type2.getSuperBound();
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/InvalidCastWithNestedGeneric.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/InvalidCastWithNestedGeneric.java
new file mode 100644
index 000000000000..8d57bab5031a
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/InvalidCastWithNestedGeneric.java
@@ -0,0 +1,86 @@
+import java.util.Set;
+
+@SuppressWarnings("unused")
+public class InvalidCast {
+  public static void main(String[] args) {
+
+  }
+
+  static class X1 {
+  }
+
+  static class X2 extends X1 {
+  }
+
+  public void t1(Set<Set<X1>> t) {
+    Set<Set<X1>> t2 = (Set<Set<X1>>) t;
+  }
+
+  public void t2(Set<Set<X2>> t) {
+    Set<Set<X2>> t2 = (Set<Set<X2>>) t;
+  }
+
+  public void t3(Set<Set<X1>> t) {
+    Set<Set<X2>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<InvalidCast.X1>>' to 'java.util.Set<java.util.Set<InvalidCast.X2>>'">(Set<Set<X2>>) t</error>; //error
+  }
+
+  public void t4(Set<Set<X2>> t) {
+    Set<Set<X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<InvalidCast.X2>>' to 'java.util.Set<java.util.Set<InvalidCast.X1>>'">(Set<Set<X1>>) t</error>;  //error
+  }
+
+  public void t5(Set<Set<? extends X1>> t) {
+    Set<Set<? extends X2>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>' to 'java.util.Set<java.util.Set<? extends InvalidCast.X2>>'">(Set<Set<? extends X2>>) t</error>;  //error
+  }
+
+  public void t6(Set<Set<? extends X2>> t) {
+    Set<Set<? extends X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends InvalidCast.X2>>' to 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>'">(Set<Set<? extends X1>>) t</error>;  //error
+  }
+
+  public void t7(Set<Set<? extends X1>> t) {
+    Set<Set<? extends X1>> t2 = (Set<Set<? extends X1>>) t;
+  }
+
+  public void t8(Set<Set<? extends X2>> t) {
+    Set<Set<? extends X2>> t2 = (Set<Set<? extends X2>>) t;
+  }
+
+  public void t9(Set<Set<X1>> t) {
+    Set<Set<? extends X2>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<InvalidCast.X1>>' to 'java.util.Set<java.util.Set<? extends InvalidCast.X2>>'">(Set<Set<? extends X2>>) t</error>;  //error
+  }
+
+  public void t10(Set<Set<X2>> t) {
+    Set<Set<? extends X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<InvalidCast.X2>>' to 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>'">(Set<Set<? extends X1>>) t</error>;  //error
+  }
+
+  public void t11(Set<Set<? extends X1>> t) {
+    Set<Set<X2>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>' to 'java.util.Set<java.util.Set<InvalidCast.X2>>'">(Set<Set<X2>>) t</error>;  //error
+  }
+
+  public void t12(Set<Set<? extends X2>> t) {
+    Set<Set<X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends InvalidCast.X2>>' to 'java.util.Set<java.util.Set<InvalidCast.X1>>'">(Set<Set<X1>>) t</error>;  //error
+  }
+
+  public void t13(Set<Set<? extends X1>> t) {
+    Set<Set<X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>' to 'java.util.Set<java.util.Set<InvalidCast.X1>>'">(Set<Set<X1>>) t</error>;  //error
+  }
+
+  public void t14(Set<Set<X1>> t) {
+    Set<Set<? extends X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<InvalidCast.X1>>' to 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>'">(Set<Set<? extends X1>>) t</error>;  //error
+  }
+
+  public void t15(Set<Set<?>> t) {
+    Set<Set<? extends X1>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<?>>' to 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>'">(Set<Set<? extends X1>>) t</error>;  // error
+  }
+
+  public void t16(Set<Set<? extends X1>> t) {
+    Set<Set<?>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends InvalidCast.X1>>' to 'java.util.Set<java.util.Set<?>>'">(Set<Set<?>>)  t</error>;  // error
+  }
+
+  public void t17(Set<Set<?>> t) {
+    Set<Set<?>> t2 = (Set<Set<?>>) t;
+  }
+
+  public void t18(Set<Set<? extends int[]>> t) {
+    Set<Set<?>> t2 = <error descr="Inconvertible types; cannot cast 'java.util.Set<java.util.Set<? extends int[]>>' to 'java.util.Set<java.util.Set<?>>'">(Set<Set<?>>)  t</error>;  // error
+  }
+}
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/GenericsHighlightingTest.java b/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/GenericsHighlightingTest.java
index 1afe39946182..b1ebb7771bc8 100644
--- a/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/GenericsHighlightingTest.java
+++ b/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/GenericsHighlightingTest.java
@@ -455,4 +455,6 @@ public class GenericsHighlightingTest extends LightDaemonAnalyzerTestCase {
   public void testOnlyUncheckedWarningCastWithDuplicatedArguments(){doTest(LanguageLevel.JDK_1_7, JavaSdkVersion.JDK_1_7, true);}
   public void testCastUnboxingConversionWithWidening(){doTest(LanguageLevel.JDK_1_7, JavaSdkVersion.JDK_1_7, true);}
   public void testVarCaptureForLoop(){doTest(LanguageLevel.JDK_10, JavaSdkVersion.JDK_10, true);}
+
+  public void testInvalidCastWithNestedGeneric(){doTest(LanguageLevel.JDK_1_8, JavaSdkVersion.JDK_1_8, true);}
 }
\ No newline at end of file