diff --git a/java/java-impl/src/com/intellij/psi/formatter/java/JavaSpacePropertyProcessor.java b/java/java-impl/src/com/intellij/psi/formatter/java/JavaSpacePropertyProcessor.java
index 27999a62ea6c..2666ff0856c2 100644
--- a/java/java-impl/src/com/intellij/psi/formatter/java/JavaSpacePropertyProcessor.java
+++ b/java/java-impl/src/com/intellij/psi/formatter/java/JavaSpacePropertyProcessor.java
@@ -50,6 +50,8 @@ import org.jetbrains.annotations.Nullable;
 import java.util.List;
 import java.util.Map;
 
+import static com.intellij.psi.codeStyle.CommonCodeStyleSettings.*;
+
 public class JavaSpacePropertyProcessor extends JavaElementVisitor {
   private static final Logger LOG = Logger.getInstance("#com.intellij.psi.formatter.java.JavaSpacePropertyProcessor");
 
@@ -1291,9 +1293,27 @@ public class JavaSpacePropertyProcessor extends JavaElementVisitor {
 
   @Override
   public void visitLambdaExpression(PsiLambdaExpression expression) {
-    if ((myRole1 == ChildRole.ARROW && (myRole2 == ChildRole.LBRACE || myRole2 == ChildRole.EXPRESSION)) ||
-        (myRole1 == ChildRole.PARAMETER_LIST && myRole2 == ChildRole.ARROW)) {
-      createSpaceInCode(mySettings.SPACE_AROUND_LAMBDA_ARROW);
+    boolean spaceAroundArrow = mySettings.SPACE_AROUND_LAMBDA_ARROW;
+    
+    if (myRole1 == ChildRole.PARAMETER_LIST && myRole2 == ChildRole.ARROW) {
+      createSpaceInCode(spaceAroundArrow);
+    }
+    else if (myRole1 == ChildRole.ARROW) {
+      if (myRole2 == ChildRole.LBRACE) {
+        switch (mySettings.BRACE_STYLE) {
+          case NEXT_LINE:
+          case NEXT_LINE_SHIFTED:
+          case NEXT_LINE_SHIFTED2:  
+            int space = spaceAroundArrow ? 1 : 0;
+            myResult = Spacing.createSpacing(space, space, 1, false, 0);
+            break;
+          default:
+            createSpaceInCode(spaceAroundArrow);
+        }
+      }
+      else if (myRole2 == ChildRole.EXPRESSION) {
+        createSpaceInCode(spaceAroundArrow);
+      }
     }
   }
 
diff --git a/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaFormatterBracesTest.java b/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaFormatterBracesTest.java
index d44db0fe62d9..0a5c29b688db 100644
--- a/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaFormatterBracesTest.java
+++ b/java/java-tests/testSrc/com/intellij/psi/formatter/java/JavaFormatterBracesTest.java
@@ -372,5 +372,16 @@ public class JavaFormatterBracesTest extends AbstractJavaFormatterTest {
       "        throws IOException {}"
     );
   }
+  
+  public void testLambdaBrace() {
+    getSettings().BRACE_STYLE = CommonCodeStyleSettings.NEXT_LINE;
+    doMethodTest(
+      "Runnable r = () -> {\n" +
+      "};",
+      "Runnable r = () ->\n" +
+      "{\n" +
+      "};"
+    );
+  }
 
 }