diff --git a/plugins/kotlin/idea/tests/test/org/jetbrains/kotlin/idea/refactoring/introduce/InplaceIntroduceFunctionTestGenerated.java b/plugins/kotlin/idea/tests/test/org/jetbrains/kotlin/idea/refactoring/introduce/InplaceIntroduceFunctionTestGenerated.java
index 2e2ff34d852d..822834ccaffb 100644
--- a/plugins/kotlin/idea/tests/test/org/jetbrains/kotlin/idea/refactoring/introduce/InplaceIntroduceFunctionTestGenerated.java
+++ b/plugins/kotlin/idea/tests/test/org/jetbrains/kotlin/idea/refactoring/introduce/InplaceIntroduceFunctionTestGenerated.java
@@ -53,6 +53,11 @@ public class InplaceIntroduceFunctionTestGenerated extends AbstractInplaceIntrod
         runTest("testData/refactoring/extractFunctionInplace/ExtractLocal.kt");
     }
 
+    @TestMetadata("ExtractLocalWithLambda.kt")
+    public void testExtractLocalWithLambda() throws Exception {
+        runTest("testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt");
+    }
+
     @TestMetadata("MoveLambdaOutsideParenthesis.kt")
     public void testMoveLambdaOutsideParenthesis() throws Exception {
         runTest("testData/refactoring/extractFunctionInplace/MoveLambdaOutsideParenthesis.kt");
diff --git a/plugins/kotlin/idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt b/plugins/kotlin/idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt
new file mode 100644
index 000000000000..1b9d4e28aaf8
--- /dev/null
+++ b/plugins/kotlin/idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt
@@ -0,0 +1,5 @@
+inline fun <R> inFun(block: (Any) -> R): R = TODO()
+fun foo(): Any {
+    <selection>inFun { a -> return a }</selection>
+}
+// IGNORE_K1
\ No newline at end of file
diff --git a/plugins/kotlin/idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt.after b/plugins/kotlin/idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt.after
new file mode 100644
index 000000000000..478f5b757abb
--- /dev/null
+++ b/plugins/kotlin/idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt.after
@@ -0,0 +1,7 @@
+inline fun <R> inFun(block: (Any) -> R): R = TODO()
+fun foo(): Any {
+    fun any(): Any = inFun { a -> return a }
+
+    return any<caret>()
+}
+// IGNORE_K1
\ No newline at end of file
diff --git a/plugins/kotlin/refactorings/kotlin.refactorings.tests.k2/test/org/jetbrains/kotlin/idea/k2/refactoring/introduce/K2InplaceIntroduceFunctionTestGenerated.java b/plugins/kotlin/refactorings/kotlin.refactorings.tests.k2/test/org/jetbrains/kotlin/idea/k2/refactoring/introduce/K2InplaceIntroduceFunctionTestGenerated.java
index 6fb4b2c9f539..9a6f0c8dcc63 100644
--- a/plugins/kotlin/refactorings/kotlin.refactorings.tests.k2/test/org/jetbrains/kotlin/idea/k2/refactoring/introduce/K2InplaceIntroduceFunctionTestGenerated.java
+++ b/plugins/kotlin/refactorings/kotlin.refactorings.tests.k2/test/org/jetbrains/kotlin/idea/k2/refactoring/introduce/K2InplaceIntroduceFunctionTestGenerated.java
@@ -53,6 +53,11 @@ public class K2InplaceIntroduceFunctionTestGenerated extends AbstractK2InplaceIn
         runTest("../../idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocal.kt");
     }
 
+    @TestMetadata("ExtractLocalWithLambda.kt")
+    public void testExtractLocalWithLambda() throws Exception {
+        runTest("../../idea/tests/testData/refactoring/extractFunctionInplace/ExtractLocalWithLambda.kt");
+    }
+
     @TestMetadata("MoveLambdaOutsideParenthesis.kt")
     public void testMoveLambdaOutsideParenthesis() throws Exception {
         runTest("../../idea/tests/testData/refactoring/extractFunctionInplace/MoveLambdaOutsideParenthesis.kt");