diff --git a/java/java-impl/src/com/intellij/refactoring/util/InlineUtil.java b/java/java-impl/src/com/intellij/refactoring/util/InlineUtil.java
index 140ef8353238..4b2e39ecbe68 100644
--- a/java/java-impl/src/com/intellij/refactoring/util/InlineUtil.java
+++ b/java/java-impl/src/com/intellij/refactoring/util/InlineUtil.java
@@ -72,6 +72,10 @@ public class InlineUtil {
 
     ChangeContextUtil.encodeContextInfo(initializer, false);
     PsiExpression expr = (PsiExpression)replaceDiamondWithInferredTypesIfNeeded(initializer, ref);
+
+    PsiThisExpression thisAccessExpr = createThisExpression(manager, thisClass, refParent);
+
+    expr = (PsiExpression)ChangeContextUtil.decodeContextInfo(expr, thisClass, thisAccessExpr);
     PsiType exprType = expr.getType();
     if (exprType != null && (!varType.equals(exprType) && (varType instanceof PsiPrimitiveType || exprType instanceof PsiPrimitiveType)
                              || !TypeConversionUtil.isAssignable(varType, exprType)
@@ -164,9 +168,7 @@ public class InlineUtil {
 
     ChangeContextUtil.clearContextInfo(initializer);
 
-    PsiThisExpression thisAccessExpr = createThisExpression(manager, thisClass, refParent);
-
-    return (PsiExpression)ChangeContextUtil.decodeContextInfo(expr, thisClass, thisAccessExpr);
+    return expr;
   }
 
   private static PsiExpression surroundWithCast(PsiVariable variable, PsiExpression expr, PsiExpression expression) {
diff --git a/java/java-tests/testData/refactoring/inlineLocal/DecodeRefsBeforeCheckingOverRedundantCasts.java b/java/java-tests/testData/refactoring/inlineLocal/DecodeRefsBeforeCheckingOverRedundantCasts.java
new file mode 100644
index 000000000000..60f50077d47a
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineLocal/DecodeRefsBeforeCheckingOverRedundantCasts.java
@@ -0,0 +1,15 @@
+class Outer {
+
+  public void bar() {
+    Outer foo = this;
+
+    new Object() {
+      public void run() {
+        f<caret>oo.baz();
+      }
+    };
+  }
+
+  public void baz() {
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/refactoring/inlineLocal/DecodeRefsBeforeCheckingOverRedundantCasts.java.after b/java/java-tests/testData/refactoring/inlineLocal/DecodeRefsBeforeCheckingOverRedundantCasts.java.after
new file mode 100644
index 000000000000..60aa60bb8e01
--- /dev/null
+++ b/java/java-tests/testData/refactoring/inlineLocal/DecodeRefsBeforeCheckingOverRedundantCasts.java.after
@@ -0,0 +1,14 @@
+class Outer {
+
+  public void bar() {
+
+      new Object() {
+      public void run() {
+        Outer.this.baz();
+      }
+    };
+  }
+
+  public void baz() {
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java
index 8fc191d8616e..8ba4def19ab3 100644
--- a/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java
+++ b/java/java-tests/testSrc/com/intellij/refactoring/inline/InlineLocalTest.java
@@ -256,6 +256,10 @@ public class InlineLocalTest extends LightCodeInsightTestCase {
     doTest(true);
   }
 
+  public void testDecodeRefsBeforeCheckingOverRedundantCasts() throws Exception {
+    doTest(true);
+  }
+
   public void testLocalVarInsideLambdaBodyWriteUsage() throws Exception {
     doTest(true, "Cannot perform refactoring.\n" +
                  "Variable 'hello' is accessed for writing");