diff --git a/java/java-psi-impl/src/com/intellij/lang/java/lexer/JavaLexer.java b/java/java-psi-impl/src/com/intellij/lang/java/lexer/JavaLexer.java
index 190f64dd2be6..8a4732ba9354 100644
--- a/java/java-psi-impl/src/com/intellij/lang/java/lexer/JavaLexer.java
+++ b/java/java-psi-impl/src/com/intellij/lang/java/lexer/JavaLexer.java
@@ -55,7 +55,8 @@ public final class JavaLexer extends LexerBase {
   private int myTokenEndOffset;  // positioned after the last symbol of the current token
   private IElementType myTokenType;
   private short myState = 0;
-  private short myBraceCount = 0;
+  private short[] myBraceCounts = new short[1];
+  private int myTemplateDepth = -1;
 
   /** The length of the last valid unicode escape (6 or greater), or 1 when no unicode escape was found. */
   private int mySymbolLength = 1;
@@ -76,14 +77,18 @@ public final class JavaLexer extends LexerBase {
     mySymbolLength = 1;
     if (initialState != 0) {
       myState = (short)initialState;
-      myBraceCount = (short)(initialState >> 16);
+      short braceCount = (short)(initialState >> 16);
+      if (braceCount > 0) {
+        myBraceCounts[0] = braceCount;
+        myTemplateDepth = 0;
+      }
     }
     myFlexLexer.reset(myBuffer, startOffset, endOffset, 0);
   }
 
   @Override
   public int getState() {
-    return (myBraceCount == 0) ? 0 : myBraceCount << 16 | myState;
+    return myTemplateDepth < 0 ? 0 : myBraceCounts[myTemplateDepth] << 16 | myState;
   }
 
   @Override
@@ -135,16 +140,16 @@ public final class JavaLexer extends LexerBase {
         break;
 
       case '{':
-        if (myBraceCount > 0) {
-          myBraceCount++;
+        if (myTemplateDepth >= 0) {
+          myBraceCounts[myTemplateDepth]++;
         }
         myTokenType = JavaTokenType.LBRACE;
         myTokenEndOffset = myBufferIndex + mySymbolLength;
         break;
       case '}':
-        if (myBraceCount > 0) {
-          myBraceCount--;
-          if (myBraceCount == 0) {
+        if (myTemplateDepth >= 0) {
+          if (--myBraceCounts[myTemplateDepth] == 0) {
+            myTemplateDepth--;
             if (myState == STATE_TEXT_BLOCK_TEMPLATE) {
               if (locateTextBlockEnd(myBufferIndex + mySymbolLength)) {
                 myTokenType = JavaTokenType.TEXT_BLOCK_TEMPLATE_MID;
@@ -287,7 +292,11 @@ public final class JavaLexer extends LexerBase {
         if (pos < myBufferEndOffset) {
           if (locateCharAt(pos) == '{' && myStringTemplates && quoteChar == '"') {
             pos += mySymbolLength;
-            myBraceCount = 1;
+            myTemplateDepth++;
+            if (myTemplateDepth == myBraceCounts.length) {
+              myBraceCounts = Arrays.copyOf(myBraceCounts, myTemplateDepth * 2);
+            }
+            myBraceCounts[myTemplateDepth] = 1;
             myTokenEndOffset = pos;
             return true;
           }
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advHighlightingStringTemplates/StringTemplates.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advHighlightingStringTemplates/StringTemplates.java
index 206eb03f53bd..23b1d3df70d3 100644
--- a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advHighlightingStringTemplates/StringTemplates.java
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/advHighlightingStringTemplates/StringTemplates.java
@@ -36,4 +36,8 @@ class X {
     System.out.println(<error descr="Raw processor type is not allowed: X.MyProcessor">myProcessor</error>."");
     return <error descr="Raw processor type is not allowed: java.lang.StringTemplate.Processor">processor</error>."\{}\{}\{}\{}\{}\{}";
   }
+
+  void nested() {
+    System.out.println(STR."\{STR."\{STR."\{STR."\{STR."\{STR."\{STR.""}"}"}"}"}"}");
+  }
 }
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/lexer/JavaLexerTest.java b/java/java-tests/testSrc/com/intellij/java/lexer/JavaLexerTest.java
index 935e8a8ddc55..0c530816177f 100644
--- a/java/java-tests/testSrc/com/intellij/java/lexer/JavaLexerTest.java
+++ b/java/java-tests/testSrc/com/intellij/java/lexer/JavaLexerTest.java
@@ -333,7 +333,64 @@ public class JavaLexerTest extends LexerTestCase {
       WHITE_SPACE (' ')
       TEXT_BLOCK_TEMPLATE_END ('}""\"')
       WHITE_SPACE ('  ')""");
-    //doTest("\"\\{fruit[0]}, \\{STR.\"\\{fruit[1]}, \\{fruit[2]}\"}\"","");
+    doTest("""
+             "\\{fruit[0]}, \\{STR."\\{fruit[1]}, \\{fruit[2]}"}"
+             """,
+           """
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('fruit')
+             LBRACKET ('[')
+             INTEGER_LITERAL ('0')
+             RBRACKET (']')
+             STRING_TEMPLATE_MID ('}, \\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('fruit')
+             LBRACKET ('[')
+             INTEGER_LITERAL ('1')
+             RBRACKET (']')
+             STRING_TEMPLATE_MID ('}, \\{')
+             IDENTIFIER ('fruit')
+             LBRACKET ('[')
+             INTEGER_LITERAL ('2')
+             RBRACKET (']')
+             STRING_TEMPLATE_END ('}"')
+             STRING_TEMPLATE_END ('}"')
+             WHITE_SPACE ('\\n')""");
+    doTest("""
+             STR."\\{STR."\\{STR."\\{STR."\\{STR."\\{STR."\\{STR.""}"}"}"}"}"}"
+             """,
+           """
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_TEMPLATE_BEGIN ('"\\{')
+             IDENTIFIER ('STR')
+             DOT ('.')
+             STRING_LITERAL ('""')
+             STRING_TEMPLATE_END ('}"')
+             STRING_TEMPLATE_END ('}"')
+             STRING_TEMPLATE_END ('}"')
+             STRING_TEMPLATE_END ('}"')
+             STRING_TEMPLATE_END ('}"')
+             STRING_TEMPLATE_END ('}"')
+             WHITE_SPACE ('\\n')
+             """);
   }
 
   public void testStringLiterals() {
@@ -404,7 +461,8 @@ public class JavaLexerTest extends LexerTestCase {
     doTest("/", "DIV ('/')");
     doTest("1/2", "INTEGER_LITERAL ('1')\nDIV ('/')\nINTEGER_LITERAL ('2')");
     doTest("//\\\\u000A test", "END_OF_LINE_COMMENT ('//\\\\u000A test')"); // escaped backslash, not a unicode escape
-    doTest("//\\\\\\u000A test", "END_OF_LINE_COMMENT ('//\\\\')\nWHITE_SPACE ('\\u000A ')\nIDENTIFIER ('test')"); // escaped backslash, followed by a unicode escape
+    doTest("//\\\\\\u000A test",
+           "END_OF_LINE_COMMENT ('//\\\\')\nWHITE_SPACE ('\\u000A ')\nIDENTIFIER ('test')"); // escaped backslash, followed by a unicode escape
   }
 
   public void testWhitespace() {