diff --git a/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java b/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
index 90eaada7446d..663f795a4429 100644
--- a/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
+++ b/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
@@ -68,7 +68,8 @@ public class PyControlFlowBuilder extends PyRecursiveElementVisitor {
   public void visitPyCallExpression(final PyCallExpression node) {
     final PyExpression callee = node.getCallee();
     // Flow abrupted
-    if (callee != null && "sys.exit".equals(PyUtil.getReadableRepr(callee, true))) {
+    if (callee != null && ("sys.exit".equals(PyUtil.getReadableRepr(callee, true)) ||
+                           "fail".equals(callee.getName()))) {
       callee.accept(this);
       for (PyExpression expression : node.getArguments()) {
         expression.accept(this);
diff --git a/python/testData/inspections/PyUnreachableCodeInspection/expected.xml b/python/testData/inspections/PyUnreachableCodeInspection/expected.xml
index f455dfd911bb..5781925361ab 100644
--- a/python/testData/inspections/PyUnreachableCodeInspection/expected.xml
+++ b/python/testData/inspections/PyUnreachableCodeInspection/expected.xml
@@ -26,16 +26,19 @@
     <line>30</line>
     <description>This code is unreachable</description>
   </problem>
-
   <problem>
     <file>unreachable.py</file>
     <line>36</line>
     <description>This code is unreachable</description>
   </problem>
-
   <problem>
     <file>unreachable.py</file>
     <line>46</line>
     <description>This code is unreachable</description>
   </problem>
+  <problem>
+    <file>unreachable.py</file>
+    <line>69</line>
+    <description>This code is unreachable</description>
+  </problem>
 </problems>