diff --git a/python/src/com/jetbrains/python/inspections/PyDictCreationInspection.java b/python/src/com/jetbrains/python/inspections/PyDictCreationInspection.java
index bf8edf416cd0..778aad164878 100644
--- a/python/src/com/jetbrains/python/inspections/PyDictCreationInspection.java
+++ b/python/src/com/jetbrains/python/inspections/PyDictCreationInspection.java
@@ -2,7 +2,9 @@ package com.jetbrains.python.inspections;
 
 import com.intellij.codeInspection.ProblemsHolder;
 import com.intellij.openapi.util.Pair;
+import com.intellij.psi.PsiElement;
 import com.intellij.psi.PsiElementVisitor;
+import com.intellij.psi.PsiPolyVariantReference;
 import com.intellij.psi.util.PsiTreeUtil;
 import com.jetbrains.python.PyBundle;
 import com.jetbrains.python.actions.DictCreationQuickFix;
@@ -10,6 +12,9 @@ import com.jetbrains.python.psi.*;
 import org.jetbrains.annotations.Nls;
 import org.jetbrains.annotations.NotNull;
 
+import java.util.ArrayList;
+import java.util.List;
+
 /**
  * @author Alexey.Ivanov
  */
@@ -39,7 +44,8 @@ public class PyDictCreationInspection extends PyInspection {
         if (node.getTargets().length != 1) {
           return;
         }
-        String name = node.getTargets()[0].getName();
+        final PyExpression target = node.getTargets()[0];
+        String name = target.getName();
         if (name == null) {
           return;
         }
@@ -54,7 +60,9 @@ loop:
           for (Pair<PyExpression, PyExpression> targetToValue : assignmentStatement.getTargetsToValuesMapping()) {
             if (targetToValue.first instanceof PySubscriptionExpression) {
               PySubscriptionExpression subscriptionExpression = (PySubscriptionExpression)targetToValue.first;
-              if (name.equals(subscriptionExpression.getOperand().getName()) && subscriptionExpression.getIndexExpression() != null) {
+              if (name.equals(subscriptionExpression.getOperand().getName()) &&
+                  subscriptionExpression.getIndexExpression() != null &&
+                  !referencesTarget(targetToValue.second, target)) {
                 if (!availableFix) {
                   quickFix = new DictCreationQuickFix(node);
                   availableFix = true;
@@ -73,9 +81,24 @@ loop:
         }
         
         if (availableFix) {
-          registerProblem(node, "This dictionary creation could be rewritten by dictionary literal", quickFix);
+          registerProblem(node, "This dictionary creation could be rewritten as a dictionary literal", quickFix);
         }
       }
     }
+
+    private boolean referencesTarget(PyExpression expression, final PyExpression target) {
+      final List<PsiElement> refs = new ArrayList<PsiElement>();
+      expression.accept(new PyRecursiveElementVisitor() {
+        @Override
+        public void visitPyReferenceExpression(PyReferenceExpression node) {
+          super.visitPyReferenceExpression(node);
+          final PsiPolyVariantReference ref = node.getReference();
+          if (ref.isReferenceTo(target)) {
+            refs.add(node);
+          }
+        }
+      });
+      return !refs.isEmpty();
+    }
   }
 }
diff --git a/python/testData/inspections/PyDictCreationInspection/expected.xml b/python/testData/inspections/PyDictCreationInspection/expected.xml
deleted file mode 100644
index df3d39721312..000000000000
--- a/python/testData/inspections/PyDictCreationInspection/expected.xml
+++ /dev/null
@@ -1,8 +0,0 @@
-<?xml version="1.0" encoding="UTF-8"?>
-<problems>
-  <problem>
-    <file>test.py</file>
-    <line>1</line>
-    <description>This dictionary creation could be rewritten by dictionary literal</description>
-  </problem>
-</problems>
\ No newline at end of file
diff --git a/python/testData/inspections/PyDictCreationInspection/test.py b/python/testData/inspections/PyDictCreationInspection/test.py
new file mode 100644
index 000000000000..df4c9c835bc2
--- /dev/null
+++ b/python/testData/inspections/PyDictCreationInspection/test.py
@@ -0,0 +1,17 @@
+<warning descr="This dictionary creation could be rewritten as a dictionary literal">dict = {"n": "n"}</warning>
+dict["a"], dict["b"] = "a", "b"
+dict["k"] = "k"
+
+dict, a = {"n": "n"}
+dict["a"], a["b"] = "a", "b"
+dict["k"] = "k"
+
+d = {}
+foo()
+d["a"] = 3
+
+def someiter():
+    yield 1
+    yield 2
+dikt = { 'results' : list(someiter()) }
+dikt['num_results'] = len(dikt['results'])
diff --git a/python/testSrc/com/jetbrains/python/PythonInspectionsTest.java b/python/testSrc/com/jetbrains/python/PythonInspectionsTest.java
index a40f8949a72d..6c4838752053 100644
--- a/python/testSrc/com/jetbrains/python/PythonInspectionsTest.java
+++ b/python/testSrc/com/jetbrains/python/PythonInspectionsTest.java
@@ -102,8 +102,7 @@ public class PythonInspectionsTest extends PyLightFixtureTestCase {
   }
 
   public void testPyDictCreationInspection() throws Throwable {
-    LocalInspectionTool inspection = new PyDictCreationInspection();
-    doTest(getTestName(false), inspection);
+    doHighlightingTest(PyDictCreationInspection.class);
   }
 
   public void testPyDeprecatedModulesInspection() throws Throwable {