diff --git a/java/java-tests/testSrc/com/intellij/ide/fileTemplates/EmbeddedLiveTemplatesTest.java b/java/java-tests/testSrc/com/intellij/ide/fileTemplates/EmbeddedLiveTemplatesTest.java
index dde5003204ec..5c8fc3204e26 100644
--- a/java/java-tests/testSrc/com/intellij/ide/fileTemplates/EmbeddedLiveTemplatesTest.java
+++ b/java/java-tests/testSrc/com/intellij/ide/fileTemplates/EmbeddedLiveTemplatesTest.java
@@ -39,7 +39,7 @@ public class EmbeddedLiveTemplatesTest extends LightPlatformCodeInsightFixtureTe
   public void testSupportVariables() throws Exception {
 
     doTest("First: #[[$Var$]]# Second: #[[$Var$]]#",
-           "First: <caret> Second: ");
+           "First: Var Second: Var");
   }
 
   protected void doTest(String text, String result) {
diff --git a/platform/lang-impl/src/com/intellij/ide/fileTemplates/actions/CreateFromTemplateActionBase.java b/platform/lang-impl/src/com/intellij/ide/fileTemplates/actions/CreateFromTemplateActionBase.java
index 70d1406285d1..a69a5b5f437c 100644
--- a/platform/lang-impl/src/com/intellij/ide/fileTemplates/actions/CreateFromTemplateActionBase.java
+++ b/platform/lang-impl/src/com/intellij/ide/fileTemplates/actions/CreateFromTemplateActionBase.java
@@ -93,11 +93,11 @@ public abstract class CreateFromTemplateActionBase extends AnAction {
 
     Set<String> variables = new HashSet<String>();
     for (int i = 0; i < count; i++) {
-      String name = template.getSegmentName(i);
-      variables.add(name);
+      variables.add(template.getSegmentName(i));
     }
+    variables.removeAll(TemplateImpl.INTERNAL_VARS_SET);
     for (String variable : variables) {
-      template.addVariable(variable, null, variable, true);
+      template.addVariable(variable, null, "\"" + variable + "\"", true);
     }
     WriteCommandAction.runWriteCommandAction(project, new Runnable() {
       @Override