diff --git a/python/src/com/jetbrains/python/parsing/FunctionParsing.java b/python/src/com/jetbrains/python/parsing/FunctionParsing.java
index 65709882d37c..79e1c0f67c0d 100644
--- a/python/src/com/jetbrains/python/parsing/FunctionParsing.java
+++ b/python/src/com/jetbrains/python/parsing/FunctionParsing.java
@@ -225,7 +225,7 @@ public class FunctionParsing extends Parsing {
         nextToken();
       }
       invalidElements.error(message("PARSE.expected.formal.param.name"));
-      return false;
+      return atToken(endToken) || atToken(PyTokenTypes.COMMA);
     }
     return true;
   }
diff --git a/python/testData/psi/KeywordAsNamedParameter.py b/python/testData/psi/KeywordAsNamedParameter.py
new file mode 100644
index 000000000000..6694d8edbc21
--- /dev/null
+++ b/python/testData/psi/KeywordAsNamedParameter.py
@@ -0,0 +1,2 @@
+def f(from=1, another_one=2):
+    pass
\ No newline at end of file
diff --git a/python/testData/psi/KeywordAsNamedParameter.txt b/python/testData/psi/KeywordAsNamedParameter.txt
new file mode 100644
index 000000000000..51d4413bd2eb
--- /dev/null
+++ b/python/testData/psi/KeywordAsNamedParameter.txt
@@ -0,0 +1,24 @@
+PyFile:KeywordAsNamedParameter.py
+  PyFunction('f')
+    PsiElement(Py:DEF_KEYWORD)('def')
+    PsiWhiteSpace(' ')
+    PsiElement(Py:IDENTIFIER)('f')
+    PyParameterList
+      PsiElement(Py:LPAR)('(')
+      PsiErrorElement:formal parameter name expected
+        PsiElement(Py:FROM_KEYWORD)('from')
+        PsiElement(Py:EQ)('=')
+        PsiElement(Py:INTEGER_LITERAL)('1')
+      PsiElement(Py:COMMA)(',')
+      PsiWhiteSpace(' ')
+      PyNamedParameter('another_one')
+        PsiElement(Py:IDENTIFIER)('another_one')
+        PsiElement(Py:EQ)('=')
+        PyNumericLiteralExpression
+          PsiElement(Py:INTEGER_LITERAL)('2')
+      PsiElement(Py:RPAR)(')')
+    PsiElement(Py:COLON)(':')
+    PsiWhiteSpace('\n    ')
+    PyStatementList
+      PyPassStatement
+        PsiElement(Py:PASS_KEYWORD)('pass')
\ No newline at end of file
diff --git a/python/testSrc/com/jetbrains/python/PythonParsingTest.java b/python/testSrc/com/jetbrains/python/PythonParsingTest.java
index 4dcef353c7f1..ec0528d79efa 100644
--- a/python/testSrc/com/jetbrains/python/PythonParsingTest.java
+++ b/python/testSrc/com/jetbrains/python/PythonParsingTest.java
@@ -406,6 +406,10 @@ public class PythonParsingTest extends ParsingTestCase {
     doTest();
   }
 
+  public void testKeywordAsNamedParameter() {  // PY-8318
+    doTest();
+  }
+
   public void doTest(LanguageLevel languageLevel) {
     LanguageLevel prev = myLanguageLevel;
     myLanguageLevel = languageLevel;