diff --git a/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/graphInference/InferenceSession.java b/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/graphInference/InferenceSession.java
index cd11b21475ef..57d197e1ce66 100644
--- a/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/graphInference/InferenceSession.java
+++ b/java/java-psi-impl/src/com/intellij/psi/impl/source/resolve/graphInference/InferenceSession.java
@@ -379,7 +379,7 @@ public class InferenceSession {
       PsiType returnType = method.getReturnType();
       if (!PsiType.VOID.equals(returnType) && returnType != null) {
         PsiType targetType = getTargetType(context);
-        if (targetType != null) {
+        if (targetType != null && !PsiType.VOID.equals(targetType)) {
           registerReturnTypeConstraints(PsiUtil.isRawSubstitutor(method, mySiteSubstitutor) ? returnType : mySiteSubstitutor.substitute(returnType), targetType);
         }
       }
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/lambda/newLambda/IDEA127596.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/lambda/newLambda/IDEA127596.java
new file mode 100644
index 000000000000..20636674141b
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/lambda/newLambda/IDEA127596.java
@@ -0,0 +1,9 @@
+class Executor<E> {
+  <K> void bar(Executor<K> e) {
+    Runnable r = () -> foo(e);
+  }
+
+  private <T> T foo(final Executor<T> e) {
+    return null;
+  }
+}
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/lambda/NewLambdaHighlightingTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/lambda/NewLambdaHighlightingTest.java
index 983d28775ab5..ea9ada93ca77 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/lambda/NewLambdaHighlightingTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/lambda/NewLambdaHighlightingTest.java
@@ -88,6 +88,10 @@ public class NewLambdaHighlightingTest extends LightDaemonAnalyzerTestCase {
   public void testIDEA126109() { doTest(); }
   public void testIDEA126809() { doTest(); }
 
+  public void testIDEA127596() throws Exception {
+    doTest();
+  }
+
   private void doTest() {
     doTest(false);
   }