diff --git a/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java b/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
index 9fdb3388098c..9aa1c5381e26 100644
--- a/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
+++ b/python/src/com/jetbrains/python/codeInsight/controlflow/PyControlFlowBuilder.java
@@ -476,46 +476,49 @@ public class PyControlFlowBuilder extends PyRecursiveElementVisitor {
     final Ref<Instruction> finallyRef = new Ref<Instruction>(finallyInstruction);
     final Ref<Instruction> lastFinallyRef = new Ref<Instruction>(lastFinallyInstruction);
     myBuilder.processPending(new ControlFlowBuilder.PendingProcessor() {
+      @SuppressWarnings({"ConstantConditions"})
       public void process(final PsiElement pendingScope, final Instruction instruction) {
         final PsiElement pendingElement = instruction.getElement();
-        if (pendingElement == null || !PsiTreeUtil.isAncestor(tryPart, pendingElement, false)) {
-          myBuilder.addPendingEdge(pendingScope, instruction);
-          return;
-        }
 
-        // Process raise statements
-        if (PsiTreeUtil.isAncestor(tryPart, pendingElement, false) &&
-            PsiTreeUtil.getParentOfType(pendingElement, PyRaiseStatement.class) != null) {
-          for (Instruction rescueInstruction : exceptInstructions) {
-            myBuilder.addEdge(instruction, rescueInstruction);
+        // Handle raise statements inside try part
+        if (isRaiseInstruction(pendingElement) && PsiTreeUtil.isAncestor(tryPart, pendingElement, false)) {
+          for (Instruction inst : exceptInstructions) {
+            myBuilder.addEdge(instruction, inst);
+          }
+          if (finallyPart!=null) {
+            myBuilder.addEdge(instruction, finallyRef.get());
           }
-          myBuilder.addPendingEdge(pendingScope, instruction);
           return;
         }
-
-        // Add except statements
-        if (PsiTreeUtil.isAncestor(tryPart, pendingElement, false)) {
-          for (Instruction rescueInstruction : exceptInstructions) {
-            myBuilder.addEdge(instruction, rescueInstruction);
+        else if (pendingElement != null && PsiTreeUtil.isAncestor(tryPart, pendingElement, false)){
+          for (Instruction inst : exceptInstructions) {
+            myBuilder.addEdge(instruction, inst);
           }
         }
 
-        // Process finally
-        if (!finallyRef.isNull()) {
+        // handle return pending instructions inside try if final block exists
+        if (!finallyRef.isNull() &&
+            PsiTreeUtil.isAncestor(tryPart, pendingElement, false)) {
           myBuilder.addEdge(instruction, finallyRef.get());
-          if (!lastFinallyRef.isNull() &&
-              PsiTreeUtil.getParentOfType(pendingElement, PyReturnStatement.class, false) != null) {
-            myBuilder.addPendingEdge(null, lastFinallyRef.get());
-          }
+          myBuilder.addPendingEdge(null, lastFinallyRef.get());
           return;
         }
 
+        // Handle pending instructions inside try with final block
+        if (finallyPart!=null && pendingScope !=finallyPart &&
+            PsiTreeUtil.isAncestor(tryPart, pendingElement, false)) {
+          myBuilder.addEdge(instruction, finallyRef.get());
+          return;
+        }
         myBuilder.addPendingEdge(pendingScope, instruction);
-
       }
     });
   }
 
+  private boolean isRaiseInstruction(final PsiElement pendingElement) {
+    return pendingElement != null && PsiTreeUtil.getParentOfType(pendingElement, PyRaiseStatement.class) != null;
+  }
+
   @Override
   public void visitPyComprehensionElement(final PyComprehensionElement node) {
     myBuilder.startNode(node);
diff --git a/python/testData/codeInsight/controlflow/raise.txt b/python/testData/codeInsight/controlflow/raise.txt
index e3f9d533f122..1461a143404e 100644
--- a/python/testData/codeInsight/controlflow/raise.txt
+++ b/python/testData/codeInsight/controlflow/raise.txt
@@ -2,7 +2,7 @@
 1(2) element: PyTryExceptStatement
 2(3) element: PyTryPart
 3(4) element: PyRaiseStatement
-4(5,11) READ ACCESS: Exception
+4(5) READ ACCESS: Exception
 5(6) element: PyExceptPart
 6(7) element: PyAssignmentStatement
 7(8) READ ACCESS: Exception
diff --git a/python/testData/codeInsight/controlflow/tryraisefinally.py b/python/testData/codeInsight/controlflow/tryraisefinally.py
new file mode 100644
index 000000000000..be0820484dca
--- /dev/null
+++ b/python/testData/codeInsight/controlflow/tryraisefinally.py
@@ -0,0 +1,4 @@
+try:
+    raise KeyboardInterrupt
+finally:
+    print 'test'
\ No newline at end of file
diff --git a/python/testData/codeInsight/controlflow/tryraisefinally.txt b/python/testData/codeInsight/controlflow/tryraisefinally.txt
new file mode 100644
index 000000000000..886370066158
--- /dev/null
+++ b/python/testData/codeInsight/controlflow/tryraisefinally.txt
@@ -0,0 +1,8 @@
+0(1) element: null
+1(2) element: PyTryExceptStatement
+2(3) element: PyTryPart
+3(4) element: PyRaiseStatement
+4(5) READ ACCESS: KeyboardInterrupt
+5(6) element: PyFinallyPart
+6(7) element: PyPrintStatement
+7() element: null
\ No newline at end of file
diff --git a/python/testData/inspections/PyUnreachableCodeInspection/expected.xml b/python/testData/inspections/PyUnreachableCodeInspection/expected.xml
index ebe5d1dbbce6..f455dfd911bb 100644
--- a/python/testData/inspections/PyUnreachableCodeInspection/expected.xml
+++ b/python/testData/inspections/PyUnreachableCodeInspection/expected.xml
@@ -35,7 +35,7 @@
 
   <problem>
     <file>unreachable.py</file>
-    <line>40</line>
+    <line>46</line>
     <description>This code is unreachable</description>
   </problem>
 </problems>
diff --git a/python/testSrc/com/jetbrains/python/PyControlFlowBuilderTest.java b/python/testSrc/com/jetbrains/python/PyControlFlowBuilderTest.java
index 2d9127bc314a..01994d34ad9a 100644
--- a/python/testSrc/com/jetbrains/python/PyControlFlowBuilderTest.java
+++ b/python/testSrc/com/jetbrains/python/PyControlFlowBuilderTest.java
@@ -115,7 +115,7 @@ public class PyControlFlowBuilderTest extends LightMarkedTestCase {
     doTest();
   }
 
-  public void testExit() throws Exception {
+  public void testTryRaiseFinally() throws Exception {
     doTest();
   }