diff --git a/java/java-impl/src/com/intellij/refactoring/inline/InlineMethodProcessor.java b/java/java-impl/src/com/intellij/refactoring/inline/InlineMethodProcessor.java
index d158cb7b361f..2040dac5e295 100644
--- a/java/java-impl/src/com/intellij/refactoring/inline/InlineMethodProcessor.java
+++ b/java/java-impl/src/com/intellij/refactoring/inline/InlineMethodProcessor.java
@@ -1269,7 +1269,7 @@ public class InlineMethodProcessor extends BaseRefactoringProcessor {
       if (parentStatement != null) {
         PsiElement parent = ref.getParent();
         while (!parent.equals(parentStatement)) {
-          if (parent instanceof PsiExpressionStatement) {
+          if (parent instanceof PsiExpressionStatement || parent instanceof PsiReturnStatement) {
             String text = "{\n}";
             PsiBlockStatement blockStatement = (PsiBlockStatement)myFactory.createStatementFromText(text, null);
             blockStatement = (PsiBlockStatement)myCodeStyleManager.reformat(blockStatement);
diff --git a/java/java-tests/testData/refactoring/inlineMethod/ReturnStatementWithoutBraces.java b/java/java-tests/testData/refactoring/inlineMethod/ReturnStatementWithoutBraces.java
new file mode 100644
index 000000000000..6c1566c3402d
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineMethod/ReturnStatementWithoutBraces.java
@@ -0,0 +1,12 @@
+class JavaClass {
+  String bar() {
+    return "bar";
+  }
+
+  String baz(boolean condition) {
+    if (condition)
+      return b<caret>ar();
+
+    return "default";
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/inlineMethod/ReturnStatementWithoutBraces.java.after b/java/java-tests/testData/refactoring/inlineMethod/ReturnStatementWithoutBraces.java.after
new file mode 100644
index 000000000000..2756a61b3c79
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineMethod/ReturnStatementWithoutBraces.java.after
@@ -0,0 +1,12 @@
+class JavaClass {
+  String bar() {
+    return "bar";
+  }
+
+  String baz(boolean condition) {
+    if (condition)
+        return "bar";
+
+    return "default";
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineMethodTest.java b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineMethodTest.java
index 922d5e04c3bc..fc4af4911730 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineMethodTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineMethodTest.java
@@ -272,6 +272,10 @@ public class InlineMethodTest extends LightRefactoringTestCase {
     doTest();
   }
 
+  public void testReturnStatementWithoutBraces() throws Exception {
+    doTestInlineThisOnly();
+  }
+
   private void doTestInlineThisOnly() {
     @NonNls String fileName = "/refactoring/inlineMethod/" + getTestName(false) + ".java";
     configureByFile(fileName);