diff --git a/python/helpers/pydev/_pydevd_bundle/pydevd_dont_trace_files.py b/python/helpers/pydev/_pydevd_bundle/pydevd_dont_trace_files.py
index cafbbebd987d..33bb9fa020cc 100644
--- a/python/helpers/pydev/_pydevd_bundle/pydevd_dont_trace_files.py
+++ b/python/helpers/pydev/_pydevd_bundle/pydevd_dont_trace_files.py
@@ -18,7 +18,6 @@ DONT_TRACE = {
     'linecache.py':LIB_FILE,
     'threading.py':LIB_FILE,
     'dis.py':LIB_FILE,
-    'contextlib.py':LIB_FILE,
 
     #things from pydev that we don't want to trace
     '_pydev_execfile.py':PYDEV_FILE,
diff --git a/python/helpers/pydev/_pydevd_bundle/pydevd_tracing.py b/python/helpers/pydev/_pydevd_bundle/pydevd_tracing.py
index 912731abf865..86176a86af04 100644
--- a/python/helpers/pydev/_pydevd_bundle/pydevd_tracing.py
+++ b/python/helpers/pydev/_pydevd_bundle/pydevd_tracing.py
@@ -69,22 +69,6 @@ def _internal_set_trace(tracing_func):
         TracingFunctionHolder._original_tracing(tracing_func)
 
 
-@contextmanager
-def _do_not_trace_ctx():
-    current_thread = threading.currentThread()
-    do_not_trace_before = getattr(current_thread, 'pydev_do_not_trace', None)
-    if do_not_trace_before:
-        yield
-        return
-    current_thread.pydev_do_not_trace = True
-    try:
-        yield
-    except:
-        pass
-    finally:
-        current_thread.pydev_do_not_trace = do_not_trace_before
-
-
 def SetTrace(tracing_func, frame_eval_func=None, dummy_tracing_func=None):
     if tracing_func is not None and frame_eval_func is not None:
         # There is no need to set tracing function if frame evaluation is available
@@ -96,14 +80,19 @@ def SetTrace(tracing_func, frame_eval_func=None, dummy_tracing_func=None):
         sys.settrace(tracing_func)
         return
 
-    with _do_not_trace_ctx():
+    current_thread = threading.currentThread()
+    do_not_trace_before = getattr(current_thread, 'pydev_do_not_trace', None)
+    if do_not_trace_before:
+        return
+    try:
         TracingFunctionHolder._lock.acquire()
-        try:
-            TracingFunctionHolder._warn = False
-            _internal_set_trace(tracing_func)
-            TracingFunctionHolder._warn = True
-        finally:
-            TracingFunctionHolder._lock.release()
+        current_thread.pydev_do_not_trace = True  # avoid settrace reentering
+        TracingFunctionHolder._warn = False
+        _internal_set_trace(tracing_func)
+        TracingFunctionHolder._warn = True
+    finally:
+        TracingFunctionHolder._lock.release()
+        current_thread.pydev_do_not_trace = do_not_trace_before
 
 
 def replace_sys_set_trace_func():
diff --git a/python/testSrc/com/jetbrains/env/python/PythonDebuggerTest.java b/python/testSrc/com/jetbrains/env/python/PythonDebuggerTest.java
index 7858afe24c66..62418900eadc 100644
--- a/python/testSrc/com/jetbrains/env/python/PythonDebuggerTest.java
+++ b/python/testSrc/com/jetbrains/env/python/PythonDebuggerTest.java
@@ -579,7 +579,7 @@ public class PythonDebuggerTest extends PyEnvTestCase {
       @NotNull
       @Override
       public Set<String> getTags() {
-        return ImmutableSet.of("-jython");
+        return ImmutableSet.of("-jython", "-iron");
       }
     });
   }
@@ -605,7 +605,7 @@ public class PythonDebuggerTest extends PyEnvTestCase {
       @NotNull
       @Override
       public Set<String> getTags() {
-        return ImmutableSet.of("-jython");
+        return ImmutableSet.of("-jython", "-iron");
       }
     });
   }
@@ -1314,6 +1314,12 @@ public class PythonDebuggerTest extends PyEnvTestCase {
         eval("a").hasValue("2");
         resume();
       }
+
+      @NotNull
+      @Override
+      public Set<String> getTags() {
+        return ImmutableSet.of("-iron");
+      }
     });
   }