diff --git a/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiLiteralExpressionImpl.java b/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiLiteralExpressionImpl.java
index d3b174544904..d7123c08b7bf 100644
--- a/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiLiteralExpressionImpl.java
+++ b/java/java-psi-impl/src/com/intellij/psi/impl/source/tree/java/PsiLiteralExpressionImpl.java
@@ -65,7 +65,7 @@ public class PsiLiteralExpressionImpl
     if (type == JavaTokenType.CHARACTER_LITERAL) {
       return PsiType.CHAR;
     }
-    if (type == JavaTokenType.STRING_LITERAL) {
+    if (type == JavaTokenType.STRING_LITERAL || type == JavaTokenType.RAW_STRING_LITERAL) {
       PsiManagerEx manager = getManager();
       GlobalSearchScope resolveScope = ResolveScopeManager.getElementResolveScope(this);
       return PsiType.getJavaLangString(manager, resolveScope);
@@ -113,6 +113,11 @@ public class PsiLiteralExpressionImpl
       return innerText == null ? null : internedParseStringCharacters(innerText);
     }
 
+    if (type == JavaTokenType.RAW_STRING_LITERAL) {
+      String rawString = getRawString();
+      return rawString == null ? null : internedParseStringCharacters(rawString);
+    }
+
     String text = NUMERIC_LITERALS.contains(type) ? getCanonicalText().toLowerCase(Locale.ENGLISH) : getCanonicalText();
     final int textLength = text.length();
 
@@ -164,6 +169,18 @@ public class PsiLiteralExpressionImpl
     }
     return text;
   }
+  
+  private String getRawString() {
+    String text = getCanonicalText();
+    int pos = 0;
+    int length = text.length();
+
+    while (pos < length && text.charAt(pos) == '`') pos++;
+
+    if (length - pos <= pos) return null;
+
+    return text.substring(pos, length - pos);
+  }
 
   @Nullable
   private static String internedParseStringCharacters(final String chars) {
@@ -193,14 +210,15 @@ public class PsiLiteralExpressionImpl
 
   @Override
   public boolean isValidHost() {
-    return getLiteralElementType() == JavaTokenType.STRING_LITERAL;
+    IElementType elementType = getLiteralElementType();
+    return elementType == JavaTokenType.STRING_LITERAL || elementType == JavaTokenType.RAW_STRING_LITERAL;
   }
 
   @Override
   @NotNull
   public PsiReference[] getReferences() {
     IElementType type = getLiteralElementType();
-    if (type != JavaTokenType.STRING_LITERAL && type != JavaTokenType.INTEGER_LITERAL) {
+    if (type != JavaTokenType.STRING_LITERAL && type != JavaTokenType.RAW_STRING_LITERAL && type != JavaTokenType.INTEGER_LITERAL) {
       return PsiReference.EMPTY_ARRAY; // there are references in int literals in SQL API parameters
     }
     return PsiReferenceService.getService().getContributedReferences(this);
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advRawStringLiteral/StringAssignability.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advRawStringLiteral/StringAssignability.java
new file mode 100644
index 000000000000..6539291edf36
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advRawStringLiteral/StringAssignability.java
@@ -0,0 +1,10 @@
+class Test {
+  void m(String s) {}
+  <T> void n(T s) {}
+  {
+    String s = ``abc``;
+    m(`abc`);
+    n(`abc`);
+    String[] array = {``abc``};
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/LightAdvRawStringLiteralsHighlightingTest.java b/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/LightAdvRawStringLiteralsHighlightingTest.java
new file mode 100644
index 000000000000..6e9b5edf2aaa
--- /dev/null
+++ b/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/LightAdvRawStringLiteralsHighlightingTest.java
@@ -0,0 +1,32 @@
+// Copyright 2000-2018 JetBrains s.r.o. Use of this source code is governed by the Apache 2.0 license that can be found in the LICENSE file.
+package com.intellij.java.codeInsight.daemon;
+
+import com.intellij.codeInsight.daemon.LightDaemonAnalyzerTestCase;
+import com.intellij.openapi.projectRoots.JavaSdkVersion;
+import com.intellij.openapi.projectRoots.Sdk;
+import com.intellij.pom.java.LanguageLevel;
+import com.intellij.testFramework.IdeaTestUtil;
+
+public class LightAdvRawStringLiteralsHighlightingTest extends LightDaemonAnalyzerTestCase {
+  private static final String BASE_PATH = "/codeInsight/daemonCodeAnalyzer/advRawStringLiteral";
+
+  @Override
+  protected void setUp() throws Exception {
+    super.setUp();
+    setLanguageLevel(LanguageLevel.JDK_11_PREVIEW);
+    IdeaTestUtil.setTestVersion(JavaSdkVersion.JDK_11, getModule(), getTestRootDisposable());
+  }
+
+  private void doTest() {
+    doTest(BASE_PATH + "/" + getTestName(false) + ".java", false, false);
+  }
+
+  public void testStringAssignability() {
+    doTest();
+  }
+
+  @Override
+  protected Sdk getProjectJDK() {
+    return IdeaTestUtil.getMockJdk9();
+  }
+}
\ No newline at end of file