diff --git a/java/java-impl/src/com/intellij/refactoring/anonymousToInner/AnonymousToInnerHandler.java b/java/java-impl/src/com/intellij/refactoring/anonymousToInner/AnonymousToInnerHandler.java
index dd808a94a12d..5ae7c8613e07 100644
--- a/java/java-impl/src/com/intellij/refactoring/anonymousToInner/AnonymousToInnerHandler.java
+++ b/java/java-impl/src/com/intellij/refactoring/anonymousToInner/AnonymousToInnerHandler.java
@@ -26,6 +26,7 @@ import com.intellij.openapi.editor.ScrollType;
 import com.intellij.openapi.project.Project;
 import com.intellij.psi.*;
 import com.intellij.psi.codeStyle.CodeStyleManager;
+import com.intellij.psi.impl.PsiDiamondTypeUtil;
 import com.intellij.psi.search.LocalSearchScope;
 import com.intellij.psi.search.searches.ReferencesSearch;
 import com.intellij.psi.util.PsiTreeUtil;
@@ -184,8 +185,12 @@ public class AnonymousToInnerHandler implements RefactoringActionHandler {
       }
     }
     buf.append(")");
-    PsiExpression newClassExpression = JavaPsiFacade.getInstance(myManager.getProject()).getElementFactory().createExpressionFromText(buf.toString(), null);
-    newExpr.replace(newClassExpression);
+    PsiNewExpression newClassExpression =
+      (PsiNewExpression)JavaPsiFacade.getInstance(myManager.getProject()).getElementFactory().createExpressionFromText(buf.toString(), null);
+    newClassExpression = (PsiNewExpression)newExpr.replace(newClassExpression);
+    if (PsiDiamondTypeUtil.canCollapseToDiamond(newClassExpression, newClassExpression, newClassExpression.getType())) {
+      PsiDiamondTypeUtil.replaceExplicitWithDiamond(newClassExpression.getClassOrAnonymousClassReference().getParameterList());
+    }
   }
 
   @Nullable
diff --git a/java/java-tests/testData/refactoring/anonymousToInner/canBeStatic_after.java b/java/java-tests/testData/refactoring/anonymousToInner/canBeStatic_after.java
index f56eeb0391ed..4bcfab1cb5bd 100644
--- a/java/java-tests/testData/refactoring/anonymousToInner/canBeStatic_after.java
+++ b/java/java-tests/testData/refactoring/anonymousToInner/canBeStatic_after.java
@@ -1,6 +1,6 @@
 public class Foo {
     public<T> void foo() {
-        Predicate<T> predicate = new MyPredicate<T>();
+        Predicate<T> predicate = new MyPredicate<>();
     }
 
     private interface Predicate<K> {
diff --git a/java/java-tests/testData/refactoring/anonymousToInner/collapseDiamonds.java b/java/java-tests/testData/refactoring/anonymousToInner/collapseDiamonds.java
new file mode 100644
index 000000000000..dd7ca4915b75
--- /dev/null
+++ b/java/java-tests/testData/refactoring/anonymousToInner/collapseDiamonds.java
@@ -0,0 +1,14 @@
+public class Foo {
+    public<T> void foo() {
+        Predicate<T> predicate = ne<caret>w Predicate<T>() {
+            @Override
+            public boolean test(T t) {
+                return false;
+            }
+        };
+    }
+
+    private interface Predicate<K> {
+        boolean test(K t);
+    }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/anonymousToInner/collapseDiamonds_after.java b/java/java-tests/testData/refactoring/anonymousToInner/collapseDiamonds_after.java
new file mode 100644
index 000000000000..4bcfab1cb5bd
--- /dev/null
+++ b/java/java-tests/testData/refactoring/anonymousToInner/collapseDiamonds_after.java
@@ -0,0 +1,16 @@
+public class Foo {
+    public<T> void foo() {
+        Predicate<T> predicate = new MyPredicate<>();
+    }
+
+    private interface Predicate<K> {
+        boolean test(K t);
+    }
+
+    private static class MyPredicate<T> implements Predicate<T> {
+        @Override
+        public boolean test(T t) {
+            return false;
+        }
+    }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/anonymousToInner/genericTypeParameters_after.java b/java/java-tests/testData/refactoring/anonymousToInner/genericTypeParameters_after.java
index aa7fe1d30f5d..9ee35687cb2a 100644
--- a/java/java-tests/testData/refactoring/anonymousToInner/genericTypeParameters_after.java
+++ b/java/java-tests/testData/refactoring/anonymousToInner/genericTypeParameters_after.java
@@ -2,7 +2,7 @@ import java.util.*;
 
 class A<K, V> {
     public Iterator<Map.Entry<K, V>> iterator(long revision) {
-        return new MyIterator<K, V>();
+        return new MyIterator<>();
     }
 
     private static class MyIterator<K, V> implements Iterator<Map.Entry<K, V>> {
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/AnonymousToInnerTest.java b/java/java-tests/testSrc/com/intellij/refactoring/AnonymousToInnerTest.java
index 1dcfc7ab39e5..71fa16179846 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/AnonymousToInnerTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/AnonymousToInnerTest.java
@@ -38,6 +38,10 @@ public class AnonymousToInnerTest extends LightCodeInsightTestCase {
     doTest("MyRunnable", true);
   }
   
+  public void testCollapseDiamonds() throws Exception {  // IDEADEV-29446
+    doTest("MyPredicate", true);
+  }
+  
   public void testCanBeStatic() throws Exception {
     configureByFile(TEST_ROOT + getTestName(true) + ".java");
     AnonymousToInnerHandler handler = new AnonymousToInnerHandler(){