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 c9649a026fbb..1225fe6cbe2a 100644
--- a/java/java-impl/src/com/intellij/refactoring/inline/InlineMethodProcessor.java
+++ b/java/java-impl/src/com/intellij/refactoring/inline/InlineMethodProcessor.java
@@ -48,7 +48,6 @@ import com.intellij.refactoring.BaseRefactoringProcessor;
 import com.intellij.refactoring.RefactoringBundle;
 import com.intellij.refactoring.introduceParameter.Util;
 import com.intellij.refactoring.listeners.RefactoringEventData;
-import com.intellij.refactoring.listeners.RefactoringEventListener;
 import com.intellij.refactoring.rename.NonCodeUsageInfoFactory;
 import com.intellij.refactoring.rename.RenameJavaVariableProcessor;
 import com.intellij.refactoring.util.*;
@@ -1265,7 +1264,7 @@ public class InlineMethodProcessor extends BaseRefactoringProcessor {
       if (parentStatement != null) {
         PsiElement parent = ref.getParent();
         while (!parent.equals(parentStatement)) {
-          if (parent instanceof PsiStatement && !(parent instanceof PsiDeclarationStatement)) {
+          if (parent instanceof PsiExpressionStatement) {
             String text = "{\n}";
             PsiBlockStatement blockStatement = (PsiBlockStatement)myFactory.createStatementFromText(text, null);
             blockStatement = (PsiBlockStatement)myCodeStyleManager.reformat(blockStatement);
diff --git a/java/java-tests/testData/refactoring/inlineMethod/MethodInsideChangeIfStatement.java b/java/java-tests/testData/refactoring/inlineMethod/MethodInsideChangeIfStatement.java
new file mode 100644
index 000000000000..1df5d47a74ab
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineMethod/MethodInsideChangeIfStatement.java
@@ -0,0 +1,26 @@
+import java.util.ArrayList;
+import java.util.List;
+
+class Test {
+  List<String> foo(String[] strs)
+  {
+    final List<String> result = new ArrayList<String>();
+    int start = -1;
+    for (int i = 0; i < strs.length; i++)
+    {
+      if (idx(i) == 42 && start == -1)
+      {
+        start = i;
+      } else if (idx(i) != 24 && start != -1)
+      {
+        result.add("".substring(id<caret>x(start)));
+      }
+    }
+    return result;
+  }
+
+  private static int idx(int i) {
+    return i;
+  }
+
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/inlineMethod/MethodInsideChangeIfStatement.java.after b/java/java-tests/testData/refactoring/inlineMethod/MethodInsideChangeIfStatement.java.after
new file mode 100644
index 000000000000..e43e7e849a44
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineMethod/MethodInsideChangeIfStatement.java.after
@@ -0,0 +1,22 @@
+import java.util.ArrayList;
+import java.util.List;
+
+class Test {
+  List<String> foo(String[] strs)
+  {
+    final List<String> result = new ArrayList<String>();
+    int start = -1;
+    for (int i = 0; i < strs.length; i++)
+    {
+        if (i == 42 && start == -1)
+      {
+        start = i;
+      } else if (i != 24 && start != -1)
+      {
+          result.add("".substring(start));
+      }
+    }
+    return result;
+  }
+
+}
\ 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 ec5ab9e53e96..c77b344f6722 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineMethodTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineMethodTest.java
@@ -260,6 +260,10 @@ public class InlineMethodTest extends LightRefactoringTestCase {
     doTest(true);
   }
 
+  public void testMethodInsideChangeIfStatement() throws Exception {
+    doTest();
+  }
+
   private void doTestInlineThisOnly() {
     @NonNls String fileName = "/refactoring/inlineMethod/" + getTestName(false) + ".java";
     configureByFile(fileName);