diff --git a/jps/jps-builders-6/src/org/jetbrains/jps/javac/Iterators.java b/jps/jps-builders-6/src/org/jetbrains/jps/javac/Iterators.java
index 6d7ebfeee2e4..8d3ed8b4ce7c 100644
--- a/jps/jps-builders-6/src/org/jetbrains/jps/javac/Iterators.java
+++ b/jps/jps-builders-6/src/org/jetbrains/jps/javac/Iterators.java
@@ -1,4 +1,4 @@
-// Copyright 2000-2023 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
+// Copyright 2000-2024 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
 package org.jetbrains.jps.javac;
 
 import org.jetbrains.annotations.NotNull;
@@ -63,7 +63,11 @@ public final class Iterators {
   public interface Function<S, T> {
     T fun(S s);
   }
-  
+
+  public interface BiFunction<S1, S2, T> {
+    T fun(S1 s1, S2 s2);
+  }
+
   public interface BooleanFunction<T> {
     boolean fun(T t);
   }
@@ -368,12 +372,21 @@ public final class Iterators {
   }
 
   public static <T> boolean equals(Iterable<? extends T> s1, Iterable<? extends T> s2) {
+    return equals(s1, s2, new BiFunction<T, T, Boolean>() {
+      @Override
+      public Boolean fun(T t1, T t2) {
+        return t1.equals(t2);
+      }
+    });
+  }
+
+  public static <T> boolean equals(Iterable<? extends T> s1, Iterable<? extends T> s2, BiFunction<? super T, ? super T, Boolean> comparator) {
     Iterator<? extends T> it2 = s2.iterator();
     for (T elem : s1) {
       if (!it2.hasNext()) {
         return false;
       }
-      if (!elem.equals(it2.next())) {
+      if (!comparator.fun(elem, it2.next())) {
         return false;
       }
     }
diff --git a/jps/jps-builders/src/org/jetbrains/jps/dependency/java/JvmDifferentiateStrategyImpl.java b/jps/jps-builders/src/org/jetbrains/jps/dependency/java/JvmDifferentiateStrategyImpl.java
index 2a77c1423f86..4c56becea3df 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/dependency/java/JvmDifferentiateStrategyImpl.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/dependency/java/JvmDifferentiateStrategyImpl.java
@@ -56,7 +56,7 @@ public abstract class JvmDifferentiateStrategyImpl implements JvmDifferentiateSt
       else {
         context.affectUsage(usageFactory.apply(id));
       }
-      debug("Affect ", usageKind, " usage owned by node ", id.getNodeName());
+      debug("Affect ", usageKind, " usage owned by node '", id.getNodeName(), "'");
     }
   }
 
diff --git a/jps/jps-builders/src/org/jetbrains/jps/dependency/java/KotlinMeta.java b/jps/jps-builders/src/org/jetbrains/jps/dependency/java/KotlinMeta.java
index 96ae55adad5f..ce9fa67c1386 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/dependency/java/KotlinMeta.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/dependency/java/KotlinMeta.java
@@ -151,6 +151,11 @@ public final class KotlinMeta implements JvmMetadata<KotlinMeta, KotlinMeta.Diff
     return container != null? container.getFunctions() : Collections.emptyList();
   }
 
+  public Iterable<KmTypeParameter> getTypeParameters() {
+    KmDeclarationContainer container = getDeclarationContainer();
+    return container instanceof KmClass? ((KmClass)container).getTypeParameters() : Collections.emptyList();
+  }
+
   @Nullable
   public KmDeclarationContainer getDeclarationContainer() {
     KotlinClassMetadata clsMeta = getClassMetadata();
@@ -192,7 +197,7 @@ public final class KotlinMeta implements JvmMetadata<KotlinMeta, KotlinMeta.Diff
 
     @Override
     public boolean unchanged() {
-      return !kindChanged() && !versionChanged() && !packageChanged() && !extraChanged() && functions().unchanged() && properties().unchanged()/*&& !dataChanged()*/;
+      return !kindChanged() && !versionChanged() && !packageChanged() && !extraChanged() && !typeParametersVarianceChanged() && functions().unchanged() && properties().unchanged()/*&& !dataChanged()*/;
     }
 
     public boolean kindChanged() {
@@ -215,6 +220,10 @@ public final class KotlinMeta implements JvmMetadata<KotlinMeta, KotlinMeta.Diff
       return myPast.myExtraInt != myExtraInt || !Objects.equals(myPast.myExtraString, myExtraString);
     }
 
+    public boolean typeParametersVarianceChanged() {
+      return !Iterators.equals(myPast.getTypeParameters(), getTypeParameters(), (p1, p2) -> p1.getVariance() == p2.getVariance());
+    }
+
     public Specifier<KmFunction, KmFunctionsDiff> functions() {
       return myFunctionsDiff.get();
     }
diff --git a/jps/jps-builders/src/org/jetbrains/jps/dependency/kotlin/KotlinAwareJavaDifferentiateStrategy.java b/jps/jps-builders/src/org/jetbrains/jps/dependency/kotlin/KotlinAwareJavaDifferentiateStrategy.java
index 2539dccafd15..ad8a9245239a 100644
--- a/jps/jps-builders/src/org/jetbrains/jps/dependency/kotlin/KotlinAwareJavaDifferentiateStrategy.java
+++ b/jps/jps-builders/src/org/jetbrains/jps/dependency/kotlin/KotlinAwareJavaDifferentiateStrategy.java
@@ -32,9 +32,8 @@ public final class KotlinAwareJavaDifferentiateStrategy extends JvmDifferentiate
 
     if (!addedClass.isPrivate()) {
       // calls to newly added class' constructors may shadow calls to functions named similarly
-      String ktName = getKotlinName(addedClass);
-      debug("Affecting lookup usages for added class ", ktName);
-      affectLookupUsages(context, asIterable(new JvmNodeReferenceID(addedClass.getPackageName())), ktName != null? JvmClass.getShortName(ktName) : addedClass.getShortName(), future, null);
+      debug("Affecting lookup usages for added class ", addedClass.getName());
+      affectClassLookupUsages(context, addedClass, future);
     }
 
     return true;
@@ -50,9 +49,8 @@ public final class KotlinAwareJavaDifferentiateStrategy extends JvmDifferentiate
       // this will affect all imports of this class in kotlin sources
       KmDeclarationContainer container = getDeclarationContainer(removedClass);
       if (container == null /*is non-kotlin node*/ || container instanceof KmClass) {
-        String clsName = container != null? ((KmClass)container).getName() : removedClass.getName();
-        debug("Affecting lookup usages for removed class ", clsName);
-        affectLookupUsages(context, asIterable(new JvmNodeReferenceID(removedClass.getPackageName())), JvmClass.getShortName(clsName), present, null);
+        debug("Affecting lookup usages for removed class ", removedClass.getName());
+        affectClassLookupUsages(context, removedClass, present);
       }
     }
 
@@ -127,6 +125,11 @@ public final class KotlinAwareJavaDifferentiateStrategy extends JvmDifferentiate
     for (Difference.Change<KotlinMeta, KotlinMeta.Diff> metaChange : diff.metadata(KotlinMeta.class).changed()) {
       KotlinMeta.Diff metaDiff = metaChange.getDiff();
 
+      if (metaDiff.typeParametersVarianceChanged()) {
+        debug("Kotlin class' type parameters' variance changed; affecting class usage ", changedClass.getName());
+        affectSubclasses(context, future, change.getNow().getReferenceID(), true);
+      }
+
       for (Difference.Change<KmFunction, KotlinMeta.KmFunctionsDiff> funChange : metaDiff.functions().changed()) {
         KmFunction changedKmFunction = funChange.getPast();
         Visibility visibility = Attributes.getVisibility(changedKmFunction);
@@ -272,11 +275,16 @@ public final class KotlinAwareJavaDifferentiateStrategy extends JvmDifferentiate
     if (clsMethod.isPrivate()) {
       return;
     }
-    Set<JvmNodeReferenceID> targets = collect(
-      flat(utils.allSupertypes(cls.getReferenceID()), utils.collectSubclassesWithoutMethod(cls.getReferenceID(), clsMethod)), new SmartHashSet<>()
-    );
-    targets.add(cls.getReferenceID());
-    affectLookupUsages(context, targets, getMethodKotlinName(cls, clsMethod), utils, constraint);
+    if (clsMethod.isConstructor()) {
+      affectClassLookupUsages(context, cls, utils);
+    }
+    else {
+      Set<JvmNodeReferenceID> targets = collect(
+        flat(utils.allSupertypes(cls.getReferenceID()), utils.collectSubclassesWithoutMethod(cls.getReferenceID(), clsMethod)), new SmartHashSet<>()
+      );
+      targets.add(cls.getReferenceID());
+      affectLookupUsages(context, targets, getMethodKotlinName(cls, clsMethod), utils, constraint);
+    }
   }
 
   private static final class PropertyDescriptor{
@@ -350,6 +358,11 @@ public final class KotlinAwareJavaDifferentiateStrategy extends JvmDifferentiate
     return !iterator.hasNext();
   }
 
+  private void affectClassLookupUsages(DifferentiateContext context, JvmClass cls, Utils utils) {
+    String ktName = getKotlinName(cls);
+    affectLookupUsages(context, asIterable(new JvmNodeReferenceID(cls.getPackageName())), ktName != null? JvmClass.getShortName(ktName) : cls.getShortName(), utils, null);
+  }
+
   private void affectMemberLookupUsages(DifferentiateContext context, JvmClass cls, String name, Utils utils) {
     affectLookupUsages(context, filter(map(utils.withAllSubclasses(cls.getReferenceID()), id -> id instanceof JvmNodeReferenceID? ((JvmNodeReferenceID)id) : null), Objects::nonNull), name, utils, null);
   }