diff --git a/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java b/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
index 3727f9936db8..1d580254ce18 100644
--- a/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
+++ b/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
@@ -334,10 +334,11 @@ public class PyControlFlowBuilder extends PyRecursiveElementVisitor {
     if (list != null) {
       myBuilder.startConditionalNode(list,  condition, true);
       list.accept(this);
-      final Instruction prevInstruction = myBuilder.prevInstruction != null ? myBuilder.prevInstruction : getPrevInstruction(list);
-      if (prevInstruction != null) {
-        myBuilder.addEdge(prevInstruction, instruction); //loop
+      // Loop edges
+      if (myBuilder.prevInstruction != null) {
+        myBuilder.addEdge(myBuilder.prevInstruction, instruction);
       }
+      myBuilder.checkPending(instruction);
     }
     myBuilder.prevInstruction = head;
     if (elsePart != null) {
diff --git a/python/testData/inspections/PyUnusedLocalVariableInspection/test.py b/python/testData/inspections/PyUnusedLocalVariableInspection/test.py
index 345b4ce18440..5edffda057d2 100644
--- a/python/testData/inspections/PyUnusedLocalVariableInspection/test.py
+++ b/python/testData/inspections/PyUnusedLocalVariableInspection/test.py
@@ -294,3 +294,12 @@ def test_unused_variable_in_cycle(x, c):
         x -= 1 #pass
         if c:
             break
+
+
+# PY-7517
+def test_unused_condition_local_with_last_if_in_cycle(c):
+    x = True
+    while x:
+        x = False #pass
+        if c:
+            x = True