diff --git a/java/java-psi-impl/src/com/intellij/core/CoreJavaFileManager.java b/java/java-psi-impl/src/com/intellij/core/CoreJavaFileManager.java
index 1df60969e17e..dd3904097351 100644
--- a/java/java-psi-impl/src/com/intellij/core/CoreJavaFileManager.java
+++ b/java/java-psi-impl/src/com/intellij/core/CoreJavaFileManager.java
@@ -26,10 +26,7 @@ import com.intellij.psi.search.GlobalSearchScope;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 
-import java.util.ArrayList;
-import java.util.Collection;
-import java.util.Collections;
-import java.util.List;
+import java.util.*;
 
 /**
  * @author yole
@@ -138,36 +135,48 @@ public class CoreJavaFileManager implements JavaFileManager {
         if (classes.length == 1) {
           PsiClass curClass = classes[0];
 
-          if (bucks > 0) {
-            int newComponentStart = 0;
-            int lookupStart = 0;
+            if (bucks > 0) {
+              Stack<ClassAndOffsets> currentPath = new Stack<ClassAndOffsets>();
+              currentPath.add(new ClassAndOffsets(curClass, 0, 0));
+              currentPath.add(currentPath.peek());
 
-            while (lookupStart <= className.length()) {
-              int b = className.indexOf("$", lookupStart);
-              b =  b < 0 ? className.length(): b;
+              while (currentPath.size() > 1) {
+                ClassAndOffsets classAndOffset = currentPath.pop();
+                int newComponentStart = classAndOffset.componentStart;
+                int lookupStart = classAndOffset.lookupStart;
+                curClass = currentPath.peek().clazz; //owner class
 
-              String component = className.substring(newComponentStart, b);
-              PsiClass inner = curClass.findInnerClassByName(component, false);
+                while (lookupStart <= className.length()) {
+                  int bucksIndex = className.indexOf("$", lookupStart);
+                  bucksIndex =  bucksIndex < 0 ? className.length(): bucksIndex;
 
-              lookupStart = b + 1;
-              if (inner == null) {
-                continue;
+                  String component = className.substring(newComponentStart, bucksIndex);
+                  PsiClass inner = curClass.findInnerClassByName(component, false);
+
+                  lookupStart = bucksIndex + 1;
+                  if (inner == null) {
+                    continue;
+                  }
+
+                  currentPath.add(new ClassAndOffsets(inner, newComponentStart, lookupStart));
+
+                  newComponentStart = lookupStart;
+                  curClass = inner;
+                }
+
+                if (lookupStart == newComponentStart) {
+                  return curClass;
+                }
               }
 
-              newComponentStart = lookupStart;
-              curClass = inner;
-            }
-
-            if (lookupStart != newComponentStart) {
               return null;
+
+            } else {
+              return curClass;
             }
           }
-
-
-          return curClass;
         }
       }
-    }
 
     return null;
   }
@@ -196,4 +205,17 @@ public class CoreJavaFileManager implements JavaFileManager {
   public void addToClasspath(VirtualFile root) {
     myClasspath.add(root);
   }
+
+  private static class ClassAndOffsets {
+
+    final PsiClass clazz;
+    final int componentStart;
+    final int lookupStart;
+
+    ClassAndOffsets(PsiClass clazz, int componentStart, int lookupStart) {
+      this.clazz = clazz;
+      this.componentStart = componentStart;
+      this.lookupStart = lookupStart;
+    }
+  }
 }
diff --git a/java/java-tests/testSrc/com/intellij/psi/CoreJavaFileManagerTest.java b/java/java-tests/testSrc/com/intellij/psi/CoreJavaFileManagerTest.java
index 1cd630ccc2db..01365c2d1b5a 100644
--- a/java/java-tests/testSrc/com/intellij/psi/CoreJavaFileManagerTest.java
+++ b/java/java-tests/testSrc/com/intellij/psi/CoreJavaFileManagerTest.java
@@ -22,26 +22,36 @@ import com.intellij.psi.search.GlobalSearchScope;
 import com.intellij.testFramework.PsiTestCase;
 import com.intellij.testFramework.PsiTestUtil;
 
+import java.util.LinkedList;
+import java.util.Queue;
+import java.util.Stack;
+
 
 public class CoreJavaFileManagerTest extends PsiTestCase {
 
-  public void testNotNullInnerClass() throws Exception {
+  private VirtualFile prepareClasses(String clazzName, String clazzData) throws Exception {
     VirtualFile root = PsiTestUtil.createTestProjectStructure(myProject, myModule, myFilesToDelete);
     VirtualFile pkg = root.createChildDirectory(this, "foo");
     PsiDirectory dir = myPsiManager.findDirectory(pkg);
     assertNotNull(dir);
+    PsiElement created = dir.add(PsiFileFactory.getInstance(getProject()).createFileFromText(clazzName + ".java", JavaFileType.INSTANCE, clazzData));
+    return root;
+  }
+
+  public void testNotNullInnerClass() throws Exception {
     String text = "package foo;\n\n" +
                   "public class Nested {\n" +
                   "public class InnerGeneral {}\n" +
-                  "public class Inner$ {}\n" +
+                  "public class Inner$ {" +
+                  "}\n" +
                   "\n" +
                   "public Inner$ inner() {\n" +
                   "   return  new Inner$();\n" +
                   "}\n" +
                   "\n" +
                   "}";
-    PsiElement created = dir.add(PsiFileFactory.getInstance(getProject()).createFileFromText("Nested.java", JavaFileType.INSTANCE, text));
 
+    VirtualFile root = prepareClasses("Nested", text);
     GlobalSearchScope scope = GlobalSearchScope.allScope(getProject());
     CoreJavaFileManager manager = new CoreJavaFileManager(myPsiManager);
     manager.addToClasspath(root);
@@ -65,4 +75,90 @@ public class CoreJavaFileManagerTest extends PsiTestCase {
     assertNull(clazzInner$Wrong3);
   }
 
+
+  public void testNotNullInnerClass2() throws Exception {
+    String text = "package foo;\n\n" +
+                  "public class Nested {\n" +
+
+                  "public class Inner {" +
+                  "   public class XInner{}" +
+                  "   public class XInner${}" +
+                  "}\n" +
+                  "public class Inner$ {" +
+                  "   public class XInner{}" +
+                  "   public class XInner${}" +
+                  "}\n" +
+                  "\n" +
+                  "}";
+
+    VirtualFile root = prepareClasses("Nested", text);
+    GlobalSearchScope scope = GlobalSearchScope.allScope(getProject());
+    CoreJavaFileManager manager = new CoreJavaFileManager(myPsiManager);
+    manager.addToClasspath(root);
+
+    PsiClass clazzInner = manager.findClass("foo.Nested.Inner", scope);
+    assertNotNull(clazzInner);
+
+    PsiClass clazzXInner = manager.findClass("foo.Nested.Inner.XInner", scope);
+    assertNotNull(clazzXInner);
+
+    PsiClass clazzXInner$ = manager.findClass("foo.Nested.Inner.XInner$", scope);
+    assertNotNull(clazzXInner$);
+
+    PsiClass clazz$XInner = manager.findClass("foo.Nested.Inner$.XInner", scope);
+    assertNotNull(clazz$XInner);
+
+    PsiClass clazz$XInner$ = manager.findClass("foo.Nested.Inner$.XInner$", scope);
+    assertNotNull(clazz$XInner$);
+  }
+
+
+  public void testNotNullInnerClass3() throws Exception {
+    String text = "package foo;\n\n" +
+                  "public class NestedX {\n" +
+
+                  "public class XX {" +
+                  "   public class XXX{" +
+                  "     public class XXXX{ }" +
+                  "     public class XXXX${ }" +
+                  "   }" +
+                  "   public class XXX${" +
+                  "     public class XXXX{ }" +
+                  "     public class XXXX${ }" +
+                  "   }" +
+                  "}\n" +
+                  "public class XX$ {" +
+                  "   public class XXX{" +
+                  "     public class XXXX{ }" +
+                  "     public class XXXX${ }" +
+                  "   }" +
+                  "   public class XXX${" +
+                  "     public class XXXX{ }" +
+                  "     public class XXXX${ }" +
+                  "   }" +
+                  "}\n" +
+                  "\n" +
+                  "}";
+
+    VirtualFile root = prepareClasses("NestedX", text);
+    GlobalSearchScope scope = GlobalSearchScope.allScope(getProject());
+    CoreJavaFileManager manager = new CoreJavaFileManager(myPsiManager);
+    manager.addToClasspath(root);
+
+    Queue<String> queue = new LinkedList<String>();
+    queue.add("foo.NestedX");
+
+    while(!queue.isEmpty()) {
+      String head = queue.remove();
+      PsiClass clazzInner = manager.findClass(head, scope);
+      assertNotNull(head, clazzInner);      
+      String lastSegment = head.substring(head.lastIndexOf('.'));
+      String xs = lastSegment.substring(lastSegment.indexOf("X")).replace("$", "");
+      if (xs.length() < 4) {
+        queue.add(head + "." + xs + "X");
+        queue.add(head + "." + xs + "X$");
+      }
+    }
+  }
+
 }