--- a/langtools/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/LambdaToMethod.java	Fri Jan 13 19:29:55 2017 -0800
+++ b/langtools/src/jdk.compiler/share/classes/com/sun/tools/javac/comp/LambdaToMethod.java	Tue Jan 17 09:17:10 2017 +0530
@@ -792,6 +792,7 @@
             switch (tree.getTag()) {
                 case APPLY: ((JCMethodInvocation)tree).varargsElement = varargsElement; break;
                 case NEWCLASS: ((JCNewClass)tree).varargsElement = varargsElement; break;
+                case TYPECAST: setVarargsIfNeeded(((JCTypeCast) tree).expr, varargsElement); break;
                 default: throw new AssertionError();
             }
         }

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/langtools/test/tools/javac/lambda/MethodReferenceVarargsTest.java	Tue Jan 17 09:17:10 2017 +0530
@@ -0,0 +1,40 @@
+/*
+ * Copyright (c) 2017, 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 8171993
+ * @summary AssertionError when compiling method reference with generic code and varargs.
+ * @compile MethodReferenceVarargsTest.java
+ */
+
+public class MethodReferenceVarargsTest<T> {
+    public T invoke(Object... args) {
+        return null;
+    }
+    public static <T extends String> void test() { // works with <T> alone.
+        MethodReferenceVarargsTest<T> bug = new MethodReferenceVarargsTest<>();
+        java.util.function.Function<String, T> b = bug::invoke;
+        java.util.function.Function<String, T> f = (args) -> bug.invoke(args);
+    }
+}
\ No newline at end of file