diff --git a/java/java-impl/src/com/intellij/refactoring/inline/InlineParameterExpressionProcessor.java b/java/java-impl/src/com/intellij/refactoring/inline/InlineParameterExpressionProcessor.java
index 8f1751d448bb..f7b4c2b63480 100644
--- a/java/java-impl/src/com/intellij/refactoring/inline/InlineParameterExpressionProcessor.java
+++ b/java/java-impl/src/com/intellij/refactoring/inline/InlineParameterExpressionProcessor.java
@@ -293,6 +293,11 @@ public class InlineParameterExpressionProcessor extends BaseRefactoringProcessor
         factory.createVariableDeclarationStatement(myParameter.getName(), myParameter.getType(), myInitializer);
       final PsiLocalVariable declaredVar = (PsiLocalVariable)localDeclaration.getDeclaredElements()[0];
       PsiUtil.setModifierProperty(declaredVar, PsiModifier.FINAL, myParameter.hasModifierProperty(PsiModifier.FINAL));
+      final PsiExpression localVarInitializer =
+        InlineUtil.inlineVariable(myParameter, myInitializer, (PsiReferenceExpression)factory.createExpressionFromText(myParameter.getName(), myMethod));
+      final PsiExpression initializer = declaredVar.getInitializer();
+      LOG.assertTrue(initializer != null);
+      initializer.replace(localVarInitializer);
       final PsiCodeBlock body = myMethod.getBody();
       if (body != null) {
         body.addAfter(localDeclaration, body.getLBrace());
diff --git a/java/java-tests/testData/refactoring/inlineParameter/RefStaticMethod.java b/java/java-tests/testData/refactoring/inlineParameter/RefStaticMethod.java
new file mode 100644
index 000000000000..429fa3b56972
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineParameter/RefStaticMethod.java
@@ -0,0 +1,16 @@
+public class StaticRefMove {
+  public static int init() {
+    return 1;
+  }
+
+  public void context() {
+    StaticRefMoveSubject v = new StaticRefMoveSubject();
+    v.subject(init());
+  }
+}
+
+class StaticRefMoveSubject {
+  public void subject(int <caret>subj) {
+    System.out.println(subj);
+  }
+}
diff --git a/java/java-tests/testData/refactoring/inlineParameter/RefStaticMethod.java.after b/java/java-tests/testData/refactoring/inlineParameter/RefStaticMethod.java.after
new file mode 100644
index 000000000000..6f076e7e75fb
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineParameter/RefStaticMethod.java.after
@@ -0,0 +1,17 @@
+public class StaticRefMove {
+  public static int init() {
+    return 1;
+  }
+
+  public void context() {
+    StaticRefMoveSubject v = new StaticRefMoveSubject();
+    v.subject();
+  }
+}
+
+class StaticRefMoveSubject {
+  public void subject() {
+      int subj = StaticRefMove.init();
+      System.out.println(subj);
+  }
+}
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineParameterTest.java b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineParameterTest.java
index 5b4f48a46a33..3cebbb97f2f6 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineParameterTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineParameterTest.java
@@ -80,6 +80,10 @@ public class InlineParameterTest extends LightCodeInsightTestCase {
     doTest(false);
   }
 
+  public void testRefStaticMethod() throws Exception {
+    doTest(true);
+  }
+
   public void testRefOuterThis() throws Exception {
     try {
       doTest(false);