diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/inlays/ToggleInlineHintsActionTest.kt b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/inlays/ToggleInlineHintsActionTest.kt
new file mode 100644
index 000000000000..132087a8626d
--- /dev/null
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/inlays/ToggleInlineHintsActionTest.kt
@@ -0,0 +1,82 @@
+/*
+ * Copyright 2000-2016 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package com.intellij.codeInsight.daemon.inlays
+
+import com.intellij.codeInsight.hints.isPossibleHintNearOffset
+import com.intellij.openapi.editor.ex.EditorSettingsExternalizable
+import com.intellij.testFramework.fixtures.LightCodeInsightFixtureTestCase
+import org.assertj.core.api.Assertions.assertThat
+
+class ToggleInlineHintsActionTest : LightCodeInsightFixtureTestCase() {
+
+  private var before: Boolean = false
+
+  override fun setUp() {
+    super.setUp()
+    before = EditorSettingsExternalizable.getInstance().isShowParameterNameHints
+    EditorSettingsExternalizable.getInstance().isShowParameterNameHints = false
+  }
+
+  override fun tearDown() {
+    EditorSettingsExternalizable.getInstance().isShowParameterNameHints = before
+    super.tearDown()
+  }
+
+  fun `test is enabled near method with possible hints`() {
+    myFixture.configureByText("A.java", """"
+class Test {
+  Test(int time) {}
+  void initialize(int loadTime) {}
+  static void s_test() {
+    Test test = new T<caret>est(<caret>10);
+    test.initial<caret>ize(100<caret>00);
+  }
+}
+""")
+
+    val file = myFixture.file
+    val caretModel = myFixture.editor.caretModel
+
+    assertThat(caretModel.caretCount).isEqualTo(4)
+
+    editor.caretModel.allCarets.forEach {
+      val hintCanBeAtCaret = isPossibleHintNearOffset(file, it.offset)
+      assertThat(hintCanBeAtCaret).isTrue()
+    }
+  }
+  
+  fun `test is disabled in random places`() {
+    myFixture.configureByText("A.java", """"
+class Test {
+  static void s_<caret>test() {
+    int a <caret>= 2;
+    Li<caret>st<String> list = null;
+  }
+}
+""")
+
+    val file = myFixture.file
+    val caretModel = myFixture.editor.caretModel
+
+    assertThat(caretModel.caretCount).isEqualTo(3)
+
+    editor.caretModel.allCarets.forEach {
+      val hintCanBeAtCaret = isPossibleHintNearOffset(file, it.offset)
+      assertThat(hintCanBeAtCaret).isFalse()
+    }
+  }
+  
+}
\ No newline at end of file
diff --git a/platform/lang-impl/src/com/intellij/codeInsight/hints/PopupActions.kt b/platform/lang-impl/src/com/intellij/codeInsight/hints/PopupActions.kt
index cbbe24034532..aba36f650a9e 100644
--- a/platform/lang-impl/src/com/intellij/codeInsight/hints/PopupActions.kt
+++ b/platform/lang-impl/src/com/intellij/codeInsight/hints/PopupActions.kt
@@ -23,6 +23,7 @@ import com.intellij.codeInsight.hints.settings.ParameterNameHintsSettings
 import com.intellij.codeInsight.intention.HighPriorityAction
 import com.intellij.codeInsight.intention.IntentionAction
 import com.intellij.injected.editor.EditorWindow
+import com.intellij.openapi.actionSystem.ActionPlaces
 import com.intellij.openapi.actionSystem.AnAction
 import com.intellij.openapi.actionSystem.AnActionEvent
 import com.intellij.openapi.actionSystem.CommonDataKeys
@@ -98,16 +99,32 @@ class ToggleInlineHintsAction : AnAction() {
   }
   
   override fun update(e: AnActionEvent) {
-    if (InlayParameterHintsExtension.hasAnyExtensions()) {
-      e.presentation.isEnabledAndVisible = true
-      val isShow = EditorSettingsExternalizable.getInstance().isShowParameterNameHints
-      e.presentation.text = if (isShow) disableText else enableText
+    if (!InlayParameterHintsExtension.hasAnyExtensions()) {
+      e.presentation.isEnabledAndVisible = false
+      return
     }
-    else {
-      e.presentation.isEnabledAndVisible = false      
+    
+    val isHintsShownNow = EditorSettingsExternalizable.getInstance().isShowParameterNameHints
+    e.presentation.text = if (isHintsShownNow) disableText else enableText
+    e.presentation.isEnabledAndVisible = true
+    
+    if (isInMainEditorPopup(e)) {
+      val file = CommonDataKeys.PSI_FILE.getData(e.dataContext) ?: return
+      val editor = CommonDataKeys.EDITOR.getData(e.dataContext) ?: return
+      val caretOffset = editor.caretModel.offset
+      e.presentation.isEnabledAndVisible = !isHintsShownNow && isPossibleHintNearOffset(file, caretOffset)
     }
   }
 
+  private fun isInMainEditorPopup(e: AnActionEvent): Boolean {
+    if (e.place != ActionPlaces.EDITOR_POPUP) return false
+    
+    val editor = CommonDataKeys.EDITOR.getData(e.dataContext) ?: return false
+    val offset = editor.caretModel.offset
+    
+    return !editor.inlayModel.hasInlineElementAt(offset)
+  }
+
   override fun actionPerformed(e: AnActionEvent) {
     val settings = EditorSettingsExternalizable.getInstance()
     val before = settings.isShowParameterNameHints
@@ -156,4 +173,19 @@ private fun addMethodAtCaretToBlackList(editor: Editor, file: PsiFile) {
   ParameterNameHintsSettings.getInstance().addIgnorePattern(file.language, pattern)
 
   refreshAllOpenEditors()
-}
\ No newline at end of file
+}
+
+fun isPossibleHintNearOffset(file: PsiFile, offset: Int): Boolean {
+  val hintProvider = InlayParameterHintsExtension.forLanguage(file.language) ?: return false
+
+  var element = file.findElementAt(offset)
+  for (i in 0..3) {
+    if (element == null) return false
+
+    val hints = hintProvider.getParameterHints(element)
+    if (hints.isNotEmpty()) return true
+    element = element.parent
+  }
+
+  return false
+}
diff --git a/platform/platform-resources/src/idea/LangActions.xml b/platform/platform-resources/src/idea/LangActions.xml
index 79fc2e5f0658..a0c79c8bff5b 100644
--- a/platform/platform-resources/src/idea/LangActions.xml
+++ b/platform/platform-resources/src/idea/LangActions.xml
@@ -306,6 +306,7 @@
     
     <action id="ToggleInlineHintsAction" class="com.intellij.codeInsight.hints.ToggleInlineHintsAction">
       <add-to-group group-id="EditorPopupMenu"/>
+      <add-to-group group-id="ParameterNameHints"/>
     </action>
     
     <!-- Analyze -->