--- a/langtools/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/Infer.java	Wed Jul 06 12:46:37 2016 -0700
+++ b/langtools/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/Infer.java	Wed Jul 06 15:27:36 2016 -0700
@@ -56,6 +56,7 @@
 import java.util.HashMap;
 import java.util.HashSet;
 import java.util.Map;
+import java.util.Optional;
 import java.util.Properties;
 import java.util.Set;
 import java.util.function.BiFunction;
@@ -675,18 +676,12 @@
                 paramTypes = paramTypes.tail;
             }
 
-            try {
-                funcInterfaceContext.solve(funcInterfaceContext.boundedVars(), types.noWarnings);
-            } catch (InferenceException ex) {
-                checkContext.report(pos, diags.fragment("no.suitable.functional.intf.inst", funcInterface));
-            }
-
             List<Type> actualTypeargs = funcInterface.getTypeArguments();
             for (Type t : funcInterfaceContext.undetvars) {
                 UndetVar uv = (UndetVar)t;
-                if (uv.getInst() == null) {
-                    uv.setInst(actualTypeargs.head);
-                }
+                Optional<Type> inst = uv.getBounds(InferenceBound.EQ).stream()
+                        .filter(b -> !b.containsAny(formalInterface.getTypeArguments())).findFirst();
+                uv.setInst(inst.orElse(actualTypeargs.head));
                 actualTypeargs = actualTypeargs.tail;
             }
 

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/langtools/test/tools/javac/T8048543/InferenceVariableInstantiatedUnexpectedlyTest.java	Wed Jul 06 15:27:36 2016 -0700
@@ -0,0 +1,39 @@
+/*
+ * Copyright (c) 2016, Oracle and/or its affiliates. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ *
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ *
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ *
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+/*
+ * @test
+ * @bug 8048543
+ * @summary JLS8 18.5.3: inference variable seems to be instantiated unexpectedly
+ * @compile InferenceVariableInstantiatedUnexpectedlyTest.java
+ */
+
+public class InferenceVariableInstantiatedUnexpectedlyTest {
+    interface Iface<A1 extends A2, A2> {
+        String m(A1 t);
+    }
+
+    public void run() {
+        Iface<? super Integer, Number> i = (Integer a) -> a.toString();
+    }
+}

--- a/langtools/test/tools/javac/lambda/TargetType19.java	Wed Jul 06 12:46:37 2016 -0700
+++ b/langtools/test/tools/javac/lambda/TargetType19.java	Wed Jul 06 15:27:36 2016 -0700
@@ -1,5 +1,5 @@
 /*
- * Copyright (c) 2011, Oracle and/or its affiliates. All rights reserved.
+ * Copyright (c) 2011, 2016, Oracle and/or its affiliates. All rights reserved.
  * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
  *
  * This code is free software; you can redistribute it and/or modify it
@@ -39,5 +39,5 @@
 
     <Z> void call(SAM<? extends Z> s, Z z) {  }
 
-   { call((List<? extends String> p) -> { }, 1); }
+    { call((List<? extends String> p) -> { }, 1); }
 }