diff --git a/java/java-psi-api/src/com/intellij/psi/util/TypeConversionUtil.java b/java/java-psi-api/src/com/intellij/psi/util/TypeConversionUtil.java
index 809dc516d992..59f9a19aee00 100644
--- a/java/java-psi-api/src/com/intellij/psi/util/TypeConversionUtil.java
+++ b/java/java-psi-api/src/com/intellij/psi/util/TypeConversionUtil.java
@@ -402,14 +402,6 @@ public class TypeConversionUtil {
       PsiType typeArg2 = substitutor2.substitute(typeParameter);
       if (typeArg1 == null || typeArg2 == null) return true;
       if (TypesDistinctProver.provablyDistinct(typeArg1, typeArg2, level)) return false;
-
-      final PsiClass class1 = PsiUtil.resolveClassInType(typeArg1);
-      if (class1 instanceof PsiTypeParameter) {
-        for (PsiType type : class1.getExtendsListTypes()) {
-          type = substitutor1.substitute(type);
-          if (TypesDistinctProver.provablyDistinct(type, typeArg2) && !isAssignable(type, typeArg2)) return false;
-        }
-      }
     }
 
     return true;
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/RecursiveTypesTypeArgumentDistinction.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/RecursiveTypesTypeArgumentDistinction.java
new file mode 100644
index 000000000000..cc64082bee11
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting/RecursiveTypesTypeArgumentDistinction.java
@@ -0,0 +1,11 @@
+interface A<<warning descr="Type parameter 'K' is never used">K</warning>> {}
+
+abstract class B implements A<B> {}
+
+abstract class C<V extends A<V>> {
+  void m(V v){
+    C<B> c = <warning descr="Unchecked cast: 'C<V>' to 'C<B>'">(C<B>) this</warning>;
+    System.out.println(c);
+    System.out.println(v);
+  }
+}
diff --git a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
index 7dc57259de9e..e7869fa150b9 100644
--- a/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
+++ b/java/java-tests/testSrc/com/intellij/codeInsight/daemon/GenericsHighlightingTest.java
@@ -567,6 +567,10 @@ public class GenericsHighlightingTest extends LightDaemonAnalyzerTestCase {
     doTest(LanguageLevel.JDK_1_7, JavaSdkVersion.JDK_1_7, false);
   }
 
+  public void testRecursiveTypesTypeArgumentDistinction() throws Exception {
+    doTest(LanguageLevel.JDK_1_7, JavaSdkVersion.JDK_1_7, true);
+  }
+
   public void testLeastUpperBoundWithRecursiveTypes() throws Exception {
     final PsiManager manager = getPsiManager();
     final GlobalSearchScope scope = GlobalSearchScope.allScope(getProject());