diff --git a/python/src/com/jetbrains/python/formatter/PyBlock.java b/python/src/com/jetbrains/python/formatter/PyBlock.java
index 1c94b0ecbe1d..461e0fad9b90 100644
--- a/python/src/com/jetbrains/python/formatter/PyBlock.java
+++ b/python/src/com/jetbrains/python/formatter/PyBlock.java
@@ -323,8 +323,13 @@ public class PyBlock implements ASTBlock {
       if (childType == PyTokenTypes.RPAR) {
         childIndent = Indent.getNoneIndent();
       }
-      else if (childType != PyTokenTypes.LPAR){
-        childIndent = Indent.getContinuationIndent();
+      else {
+        if (parentType == PyElementTypes.PARAMETER_LIST || argumentMayHaveSameIndentAsFollowingStatementList()) {
+          childIndent = Indent.getContinuationIndent();
+        }
+        else {
+          childIndent = Indent.getNormalIndent();
+        }
       }
     }
     else if (parentType == PyElementTypes.SUBSCRIPTION_EXPRESSION) {
@@ -421,6 +426,19 @@ public class PyBlock implements ASTBlock {
     return node.getPsi() instanceof PySequenceExpression && ((PySequenceExpression)node.getPsi()).isEmpty();
   }
 
+  private boolean argumentMayHaveSameIndentAsFollowingStatementList() {
+    if (myNode.getElementType() != PyElementTypes.ARGUMENT_LIST) {
+      return false;
+    }
+    // This check is supposed to prevent PEP8's error: Continuation line with the same indent as next logical line
+    final PsiElement header = getControlStatementHeader(myNode);
+    if (header instanceof PyStatementListContainer) {
+      final PyStatementList statementList = ((PyStatementListContainer)header).getStatementList();
+      return PyUtil.onSameLine(header, myNode.getPsi()) && !PyUtil.onSameLine(header, statementList);
+    }
+    return false;
+  }
+
   // Check https://www.python.org/dev/peps/pep-0008/#indentation
   private static boolean hasHangingIndent(@NotNull PsiElement elem) {
     if (elem instanceof PyCallExpression) {
diff --git a/python/testData/formatter/continuationIndentIsNotUsedForNestedFunctionCallsInWithStatement_after.py b/python/testData/formatter/continuationIndentIsNotUsedForNestedFunctionCallsInWithStatement_after.py
index 9a4e5063b2ab..c867a3f0451a 100644
--- a/python/testData/formatter/continuationIndentIsNotUsedForNestedFunctionCallsInWithStatement_after.py
+++ b/python/testData/formatter/continuationIndentIsNotUsedForNestedFunctionCallsInWithStatement_after.py
@@ -1,4 +1,4 @@
 with raises_assertion(
         has_string('Missing download_urls: {}, {}'.format(
-                self.other_download_url, self.another_download_url))):
+            self.other_download_url, self.another_download_url))):
     fixture.assert_detail_page_yields_expected()
diff --git a/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py b/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py
index 1102984b4b98..4585528e01cd 100644
--- a/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py
+++ b/python/testData/formatter/hangingIndentInNamedArgumentValue_after.py
@@ -1,3 +1,3 @@
 funcWithLongName(x=[
 ],
-        y=42)
+    y=42)
diff --git a/python/testData/formatter/noAlignForMethodArguments_after.py b/python/testData/formatter/noAlignForMethodArguments_after.py
index 740f638adf4c..5682f4ca4f45 100644
--- a/python/testData/formatter/noAlignForMethodArguments_after.py
+++ b/python/testData/formatter/noAlignForMethodArguments_after.py
@@ -2,4 +2,4 @@ def long_method_name(bar, baz): pass
 
 
 long_method_name("long string one",
-        "long string two")
+    "long string two")
diff --git a/python/testData/formatter/noWrapBeforeParen_after.py b/python/testData/formatter/noWrapBeforeParen_after.py
index 003f387c408c..5ab3054984db 100644
--- a/python/testData/formatter/noWrapBeforeParen_after.py
+++ b/python/testData/formatter/noWrapBeforeParen_after.py
@@ -4,4 +4,4 @@ def foo():
             if comments:
                 for comment in comments:
                     record += '    <comment ' + "".join(
-                            ca + '=' + quoteattr(comment[ca]) + ' ' for ca in comment) + '/>\n'
+                        ca + '=' + quoteattr(comment[ca]) + ' ' for ca in comment) + '/>\n'
diff --git a/python/testData/formatter/setLiteralInArgList_after.py b/python/testData/formatter/setLiteralInArgList_after.py
index 48bec3381227..9c2f75d6dca6 100644
--- a/python/testData/formatter/setLiteralInArgList_after.py
+++ b/python/testData/formatter/setLiteralInArgList_after.py
@@ -1,3 +1,3 @@
 self.assertEqual(
-        {"000000000000", "111111111111"},
-        foo['bar']['baz'])
+    {"000000000000", "111111111111"},
+    foo['bar']['baz'])
diff --git a/python/testData/refactoring/introduceVariable/functionCallWithCommentNotInlined.after.py b/python/testData/refactoring/introduceVariable/functionCallWithCommentNotInlined.after.py
index f73d8462c0c9..3140c9b2ab96 100644
--- a/python/testData/refactoring/introduceVariable/functionCallWithCommentNotInlined.after.py
+++ b/python/testData/refactoring/introduceVariable/functionCallWithCommentNotInlined.after.py
@@ -1,8 +1,8 @@
 import subprocess as sp
 
 a = sp.check_output(
-        args=['python', '-c', 'print("Spam")'],
-        # read errors too
-        stderr=sp.STDOUT
+    args=['python', '-c', 'print("Spam")'],
+    # read errors too
+    stderr=sp.STDOUT
 )
 print(a)
\ No newline at end of file
diff --git a/python/testSrc/com/jetbrains/python/PyIndentTest.java b/python/testSrc/com/jetbrains/python/PyIndentTest.java
index d6c09b817227..0164e14fc5ce 100644
--- a/python/testSrc/com/jetbrains/python/PyIndentTest.java
+++ b/python/testSrc/com/jetbrains/python/PyIndentTest.java
@@ -16,6 +16,7 @@
 package com.jetbrains.python;
 
 import com.intellij.openapi.actionSystem.IdeActions;
+import com.intellij.openapi.command.CommandProcessor;
 import com.intellij.psi.codeStyle.CodeStyleSettingsManager;
 import com.jetbrains.python.fixtures.PyTestCase;
 
@@ -199,7 +200,7 @@ public class PyIndentTest extends PyTestCase {
   public void testEnterInNonEmptyArgList() {  // PY-1947
     doTest("Task(<caret>params=1)",
            "Task(\n" +
-           "        <caret>params=1)");
+           "    <caret>params=1)");
   }
 
   public void testEnterInNonClosedArgList() {   // PY-4863