diff --git a/java/java-analysis-impl/java-analysis-impl.iml b/java/java-analysis-impl/java-analysis-impl.iml
index ebcda34a7da5..ac27777d1517 100644
--- a/java/java-analysis-impl/java-analysis-impl.iml
+++ b/java/java-analysis-impl/java-analysis-impl.iml
@@ -21,5 +21,6 @@
     <orderEntry type="library" exported="" name="ASM" level="project" />
     <orderEntry type="library" name="StreamEx" level="project" />
     <orderEntry type="library" name="KotlinJavaRuntime" level="project" />
+    <orderEntry type="module" module-name="openapi" />
   </component>
 </module>
\ No newline at end of file
diff --git a/plugins/InspectionGadgets/InspectionGadgetsAnalysis/src/com/siyeh/ig/psiutils/TestUtils.java b/plugins/InspectionGadgets/InspectionGadgetsAnalysis/src/com/siyeh/ig/psiutils/TestUtils.java
index ce9cf552c73a..fe0585333b9a 100644
--- a/plugins/InspectionGadgets/InspectionGadgetsAnalysis/src/com/siyeh/ig/psiutils/TestUtils.java
+++ b/plugins/InspectionGadgets/InspectionGadgetsAnalysis/src/com/siyeh/ig/psiutils/TestUtils.java
@@ -16,6 +16,7 @@
 package com.siyeh.ig.psiutils;
 
 import com.intellij.codeInsight.AnnotationUtil;
+import com.intellij.codeInsight.MetaAnnotationUtil;
 import com.intellij.codeInsight.TestFrameworks;
 import com.intellij.openapi.roots.ProjectRootManager;
 import com.intellij.openapi.vfs.VirtualFile;
@@ -25,12 +26,14 @@ import com.intellij.psi.util.PsiTreeUtil;
 import com.intellij.psi.util.PsiUtil;
 import com.intellij.testIntegration.TestFramework;
 import com.intellij.util.ObjectUtils;
+import com.intellij.util.containers.hash.HashSet;
 import com.siyeh.ig.callMatcher.CallMatcher;
 import com.siyeh.ig.junit.JUnitCommonClassNames;
 import org.jetbrains.annotations.NonNls;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 
+import java.util.Collections;
 import java.util.Set;
 
 import static com.intellij.codeInsight.AnnotationUtil.CHECK_HIERARCHY;
@@ -148,13 +151,23 @@ public class TestUtils {
    * @return true if class is annotated with {@code @TestInstance(TestInstance.Lifecycle.PER_CLASS)}
    */
   public static boolean testInstancePerClass(@NotNull PsiClass containingClass) {
-    PsiAnnotation annotation = AnnotationUtil.findAnnotation(containingClass, JUnitCommonClassNames.ORG_JUNIT_JUPITER_API_TEST_INSTANCE);
+    return testInstancePerClass(containingClass, new HashSet<>());
+  }
+
+  private static boolean testInstancePerClass(@NotNull PsiClass containingClass, HashSet<PsiClass> classes) {
+    PsiAnnotation annotation = MetaAnnotationUtil.findMetaAnnotations(containingClass, Collections.singletonList(JUnitCommonClassNames.ORG_JUNIT_JUPITER_API_TEST_INSTANCE))
+      .findFirst().orElse(null);
     if (annotation != null) {
       PsiAnnotationMemberValue value = annotation.findDeclaredAttributeValue(PsiAnnotation.DEFAULT_REFERENCED_METHOD_NAME);
       if (value != null && value.getText().contains("PER_CLASS")) {
         return true;
       }
     }
+    else {
+      for (PsiClass superClass : containingClass.getSupers()) {
+        if (classes.add(superClass) && testInstancePerClass(superClass, classes)) return true;
+      }
+    }
     return false;
   }
 
diff --git a/plugins/junit/src/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedInspection.kt b/plugins/junit/src/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedInspection.kt
index 4115ccf8b0d5..dc0e105af152 100644
--- a/plugins/junit/src/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedInspection.kt
+++ b/plugins/junit/src/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedInspection.kt
@@ -28,6 +28,7 @@ import com.intellij.psi.util.TypeConversionUtil
 import com.intellij.util.containers.ContainerUtil
 import com.siyeh.InspectionGadgetsBundle
 import com.siyeh.ig.junit.JUnitCommonClassNames
+import com.siyeh.ig.psiutils.TestUtils
 import org.jetbrains.annotations.Nls
 import java.util.*
 
@@ -154,14 +155,16 @@ class JUnit5MalformedParameterizedInspection : AbstractBaseJavaLocalInspectionTo
         processArrayInAnnotationParameter(annotationMemberValue, { attributeValue ->
           for (reference in attributeValue.references) {
             if (reference is MethodSourceReference) {
+              val containingClass = method.containingClass
               val resolve = reference.resolve()
               if (resolve !is PsiMethod) {
-                val containingClass = method.containingClass
                 var createFix : CreateMethodQuickFix? = null
-                if (containingClass != null && holder.isOnTheFly)
+                if (containingClass != null && holder.isOnTheFly) {
+                  val staticModifier = if (!TestUtils.testInstancePerClass(containingClass)) " static" else "";
                   createFix = CreateMethodQuickFix.createFix(containingClass,
-                                                             "static Object[][] " + reference.value + "()",
+                                                             "private$staticModifier Object[][] " + reference.value + "()",
                                                              "return new Object[][] {};")
+                }
                 holder.registerProblem(attributeValue,
                                        "Cannot resolve target method source: \'" + reference.value + "\'",
                                        createFix)
@@ -170,7 +173,8 @@ class JUnit5MalformedParameterizedInspection : AbstractBaseJavaLocalInspectionTo
                 val sourceProvider : PsiMethod = resolve
                 val providerName = sourceProvider.name
 
-                if (!sourceProvider.hasModifierProperty(PsiModifier.STATIC)) {
+                if (!sourceProvider.hasModifierProperty(PsiModifier.STATIC) &&
+                    containingClass != null && !TestUtils.testInstancePerClass(containingClass)) {
                   holder.registerProblem(attributeValue, "Method source \'$providerName\' must be static",
                                          ProblemHighlightType.GENERIC_ERROR_OR_WARNING,
                                          QuickFixFactory.getInstance().createModifierListFix(sourceProvider, PsiModifier.STATIC, true, false))
@@ -248,12 +252,12 @@ class JUnit5MalformedParameterizedInspection : AbstractBaseJavaLocalInspectionTo
         if (InheritanceUtil.isInheritor(returnType, CommonClassNames.JAVA_UTIL_STREAM_LONG_STREAM)) return PsiType.LONG
         if (InheritanceUtil.isInheritor(returnType, CommonClassNames.JAVA_UTIL_STREAM_DOUBLE_STREAM)) return PsiType.DOUBLE
 
-        val streamItemType = PsiUtil.substituteTypeParameter(returnType, CommonClassNames.JAVA_UTIL_STREAM_STREAM, 0, false)
+        val streamItemType = PsiUtil.substituteTypeParameter(returnType, CommonClassNames.JAVA_UTIL_STREAM_STREAM, 0, true)
         if (streamItemType != null) {
           return streamItemType
         }
 
-        return PsiUtil.substituteTypeParameter(returnType, CommonClassNames.JAVA_UTIL_ITERATOR, 0, false)
+        return PsiUtil.substituteTypeParameter(returnType, CommonClassNames.JAVA_UTIL_ITERATOR, 0, true)
       }
     }
   }
diff --git a/plugins/junit/test/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedTest.java b/plugins/junit/test/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedTest.java
index a7dfcebd3cf6..94c2677b68ad 100644
--- a/plugins/junit/test/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedTest.java
+++ b/plugins/junit/test/com/intellij/execution/junit/codeInsight/JUnit5MalformedParameterizedTest.java
@@ -66,12 +66,18 @@ public class JUnit5MalformedParameterizedTest extends LightInspectionTestCase {
 
     addEnvironmentClass("package org.junit.jupiter.params.provider;\n" +
                         "public @interface ArgumentsSource {}");
+
+    addEnvironmentClass("package org.junit.jupiter.api;\n" +
+                        "public @interface TestInstance {\n" +
+                        "enum Lifecycle {PER_CLASS, PER_METHOD;}\n" +
+                        "Lifecycle value();}");
   }
 
   public void testMalformedSources() { doTest(); }
   public void testMethodSource() { doTest(); }
   public void testMalformedSourcesImplicitConversion() { doTest(); }
   public void testMalformedSourcesImplicitParameters() { doTest(); }
+  public void testMalformedSourcesTestInstancePerClass() { doTest(); }
 
   @Override
   protected String getBasePath() {
diff --git a/plugins/junit/testData/codeInsight/malformedParameterized/MalformedSourcesTestInstancePerClass.java b/plugins/junit/testData/codeInsight/malformedParameterized/MalformedSourcesTestInstancePerClass.java
new file mode 100644
index 000000000000..56c5d08b6465
--- /dev/null
+++ b/plugins/junit/testData/codeInsight/malformedParameterized/MalformedSourcesTestInstancePerClass.java
@@ -0,0 +1,22 @@
+
+import java.util.Arrays;
+import java.util.stream.Stream;
+
+import org.junit.jupiter.params.ParameterizedTest;
+import org.junit.jupiter.params.provider.MethodSource;
+import org.junit.jupiter.api.TestInstance;
+
+@TestInstance( TestInstance.Lifecycle.PER_CLASS )
+@interface Meta{}
+
+@Meta
+abstract class AbstractTest {}
+class TestWithMethodSource extends AbstractTest {
+  @ParameterizedTest
+  @MethodSource("getParameters")
+  public void shouldExecuteWithParameterizedMethodSource(String arguments) { }
+
+  public Stream getParameters(){ //non static but that's expected due to PER_CLASS test instance
+    return Arrays.asList( "Another execution", "Last execution").stream();
+  }
+}
\ No newline at end of file