diff --git a/python/src/com/jetbrains/python/parsing/FunctionParsing.java b/python/src/com/jetbrains/python/parsing/FunctionParsing.java
index 70c2bb67bbab..62f4d9508937 100644
--- a/python/src/com/jetbrains/python/parsing/FunctionParsing.java
+++ b/python/src/com/jetbrains/python/parsing/FunctionParsing.java
@@ -150,7 +150,11 @@ public class FunctionParsing extends Parsing {
         }
         if (!isStarParameter && matchToken(PyTokenTypes.EQ)) {
           if (!getExpressionParser().parseSingleExpression(false)) {
-            myBuilder.error(message("PARSE.expected.expression"));
+            PsiBuilder.Marker invalidElements = myBuilder.mark();
+            while(!atAnyOfTokens(endToken, PyTokenTypes.LINE_BREAK, PyTokenTypes.COMMA, null)) {
+              nextToken();
+            }
+            invalidElements.error(message("PARSE.expected.expression"));
           }
         }
         parameter.done(PyElementTypes.NAMED_PARAMETER);
diff --git a/python/src/com/jetbrains/python/parsing/Parsing.java b/python/src/com/jetbrains/python/parsing/Parsing.java
index 77bcc849b0e2..1975fc2c0ec2 100644
--- a/python/src/com/jetbrains/python/parsing/Parsing.java
+++ b/python/src/com/jetbrains/python/parsing/Parsing.java
@@ -62,6 +62,14 @@ public class Parsing {
     return myBuilder.getTokenType() == tokenType;
   }
 
+  protected boolean atAnyOfTokens(final IElementType... tokenTypes) {
+    IElementType currentTokenType = myBuilder.getTokenType();
+    for (IElementType tokenType : tokenTypes) {
+      if (currentTokenType == tokenType) return true;
+    }
+    return false;
+  }
+
   protected boolean matchToken(final IElementType tokenType) {
     if (myBuilder.getTokenType() == tokenType) {
       myBuilder.advanceLexer();
diff --git a/python/testData/psi/KeywordAsDefaultParameterValue.py b/python/testData/psi/KeywordAsDefaultParameterValue.py
new file mode 100644
index 000000000000..46762951dbcc
--- /dev/null
+++ b/python/testData/psi/KeywordAsDefaultParameterValue.py
@@ -0,0 +1,2 @@
+def select2(self, fields=from):
+    pass
diff --git a/python/testData/psi/KeywordAsDefaultParameterValue.txt b/python/testData/psi/KeywordAsDefaultParameterValue.txt
new file mode 100644
index 000000000000..2c0c3bb02689
--- /dev/null
+++ b/python/testData/psi/KeywordAsDefaultParameterValue.txt
@@ -0,0 +1,22 @@
+PyFile:KeywordAsDefaultParameterValue.py
+  PyFunction('select2')
+    PsiElement(Py:DEF_KEYWORD)('def')
+    PsiWhiteSpace(' ')
+    PsiElement(Py:IDENTIFIER)('select2')
+    PyParameterList
+      PsiElement(Py:LPAR)('(')
+      PyNamedParameter('self')
+        PsiElement(Py:IDENTIFIER)('self')
+      PsiElement(Py:COMMA)(',')
+      PsiWhiteSpace(' ')
+      PyNamedParameter('fields')
+        PsiElement(Py:IDENTIFIER)('fields')
+        PsiElement(Py:EQ)('=')
+        PsiErrorElement:expression expected
+          PsiElement(Py:FROM_KEYWORD)('from')
+      PsiElement(Py:RPAR)(')')
+    PsiElement(Py:COLON)(':')
+    PsiWhiteSpace('\n    ')
+    PyStatementList
+      PyPassStatement
+        PsiElement(Py:PASS_KEYWORD)('pass')
\ No newline at end of file
diff --git a/python/testSrc/com/jetbrains/python/PythonParsingTest.java b/python/testSrc/com/jetbrains/python/PythonParsingTest.java
index 75115b2d16a0..7ef573f17db7 100644
--- a/python/testSrc/com/jetbrains/python/PythonParsingTest.java
+++ b/python/testSrc/com/jetbrains/python/PythonParsingTest.java
@@ -271,6 +271,10 @@ public class PythonParsingTest extends ParsingTestCase {
     doTest();
   }
 
+  public void testKeywordAsDefaultParameterValue() {  // PY-3713
+    doTest();
+  }
+
   public void testTrailingCommaInArgList() {  // PY-4016
     doTest();
   }