diff --git a/java/java-analysis-impl/src/com/intellij/codeInspection/localCanBeFinal/LocalCanBeFinal.java b/java/java-analysis-impl/src/com/intellij/codeInspection/localCanBeFinal/LocalCanBeFinal.java
index 112aee0814de..e508a77b11b6 100644
--- a/java/java-analysis-impl/src/com/intellij/codeInspection/localCanBeFinal/LocalCanBeFinal.java
+++ b/java/java-analysis-impl/src/com/intellij/codeInspection/localCanBeFinal/LocalCanBeFinal.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2000-2009 JetBrains s.r.o.
+ * Copyright 2000-2013 JetBrains s.r.o.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -77,7 +77,7 @@ public class LocalCanBeFinal extends BaseJavaBatchLocalInspectionTool {
   }
 
   @Nullable
-  private List<ProblemDescriptor> checkCodeBlock(final PsiCodeBlock body, InspectionManager manager, boolean onTheFly) {
+  private List<ProblemDescriptor> checkCodeBlock(final PsiCodeBlock body, final InspectionManager manager, final boolean onTheFly) {
     if (body == null) return null;
     final ControlFlow flow;
     try {
@@ -120,9 +120,17 @@ public class LocalCanBeFinal extends BaseJavaBatchLocalInspectionTool {
 
     final List<PsiVariable> writtenVariables = new ArrayList<PsiVariable>(ControlFlowUtil.getWrittenVariables(flow, start, end, false));
 
+    final List<ProblemDescriptor> problems = new ArrayList<ProblemDescriptor>();
     final HashSet<PsiVariable> ssaVarsSet = new HashSet<PsiVariable>();
     body.accept(new JavaRecursiveElementWalkingVisitor() {
       @Override public void visitCodeBlock(PsiCodeBlock block) {
+        if (block.getParent() instanceof PsiLambdaExpression && block != body) {
+          final List<ProblemDescriptor> descriptors = checkCodeBlock(block, manager, onTheFly);
+          if (descriptors != null) {
+            problems.addAll(descriptors);
+          }
+          return;
+        }
         super.visitCodeBlock(block);
         PsiElement anchor = block;
         if (block.getParent() instanceof PsiSwitchStatement) {
@@ -177,7 +185,7 @@ public class LocalCanBeFinal extends BaseJavaBatchLocalInspectionTool {
       }
     });
 
-    ArrayList<PsiVariable> result = new ArrayList<PsiVariable>(ssaVarsSet);
+    final ArrayList<PsiVariable> result = new ArrayList<PsiVariable>(ssaVarsSet);
 
     if (body.getParent() instanceof PsiMethod) {
       PsiMethod method = (PsiMethod)body.getParent();
@@ -215,7 +223,7 @@ public class LocalCanBeFinal extends BaseJavaBatchLocalInspectionTool {
         iterator.remove();
       }
     }
-    List<ProblemDescriptor> problems = new ArrayList<ProblemDescriptor>(result.size());
+
     for (PsiVariable variable : result) {
       final PsiIdentifier nameIdenitier = variable.getNameIdentifier();
       PsiElement problemElement = nameIdenitier != null ? nameIdenitier : variable;
diff --git a/java/java-tests/testData/inspection/localCanBeFinal/LambdaBody/expected.xml b/java/java-tests/testData/inspection/localCanBeFinal/LambdaBody/expected.xml
new file mode 100644
index 000000000000..1da1935ad438
--- /dev/null
+++ b/java/java-tests/testData/inspection/localCanBeFinal/LambdaBody/expected.xml
@@ -0,0 +1,16 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<problems>
+  <problem>
+    <file>Junk.java</file>
+    <line>4</line>
+    <problem_class severity="WARNING" attribute_key="WARNING_ATTRIBUTES">Local variable or parameter can be final</problem_class>
+    <description>Variable &lt;code&gt;i&lt;/code&gt; can have &lt;code&gt;final&lt;/code&gt; modifier</description>
+  </problem>
+  <problem>
+    <file>Junk.java</file>
+    <line>3</line>
+    <problem_class severity="WARNING" attribute_key="WARNING_ATTRIBUTES">Local variable or parameter can be final</problem_class>
+    <description>Variable &lt;code&gt;r&lt;/code&gt; can have &lt;code&gt;final&lt;/code&gt; modifier</description>
+  </problem>
+</problems>
+
diff --git a/java/java-tests/testData/inspection/localCanBeFinal/LambdaBody/src/Junk.java b/java/java-tests/testData/inspection/localCanBeFinal/LambdaBody/src/Junk.java
new file mode 100644
index 000000000000..f89a1e2f4786
--- /dev/null
+++ b/java/java-tests/testData/inspection/localCanBeFinal/LambdaBody/src/Junk.java
@@ -0,0 +1,10 @@
+public final class Junk {
+  public void sillyMethod() {
+    Runnable r = () -> {
+      int i = 0;
+      System.out.println(i);
+    };
+  }
+}
+
+
diff --git a/java/java-tests/testSrc/com/intellij/codeInspection/LocalCanBeFinalTest.java b/java/java-tests/testSrc/com/intellij/codeInspection/LocalCanBeFinalTest.java
index c8e5ecf6fa1c..7dfa608fc142 100644
--- a/java/java-tests/testSrc/com/intellij/codeInspection/LocalCanBeFinalTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInspection/LocalCanBeFinalTest.java
@@ -1,3 +1,18 @@
+/*
+ * Copyright 2000-2013 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
 package com.intellij.codeInspection;
 
 import com.intellij.JavaTestUtil;
@@ -102,4 +117,10 @@ public class LocalCanBeFinalTest extends InspectionTestCase {
     myTool.REPORT_VARIABLES = true;
     doTest();
   }
+
+  public void testLambdaBody() throws Exception {
+    myTool.REPORT_PARAMETERS = true;
+    myTool.REPORT_VARIABLES = true;
+    doTest();
+  }
 }