--- a/langtools/src/share/classes/com/sun/tools/javac/code/Symbol.java	Tue Sep 13 14:14:57 2011 +0100
+++ b/langtools/src/share/classes/com/sun/tools/javac/code/Symbol.java	Tue Sep 13 14:15:22 2011 +0100
@@ -726,6 +726,11 @@
          */
         public JavaFileObject classfile;
 
+        /** the list of translated local classes (used for generating
+         * InnerClasses attribute)
+         */
+        public List<ClassSymbol> trans_local;
+
         /** the constant pool of the class
          */
         public Pool pool;

--- a/langtools/src/share/classes/com/sun/tools/javac/comp/Lower.java	Tue Sep 13 14:14:57 2011 +0100
+++ b/langtools/src/share/classes/com/sun/tools/javac/comp/Lower.java	Tue Sep 13 14:15:22 2011 +0100
@@ -2271,6 +2271,14 @@
         tree.extending = translate(tree.extending);
         tree.implementing = translate(tree.implementing);
 
+        if (currentClass.isLocal()) {
+            ClassSymbol encl = currentClass.owner.enclClass();
+            if (encl.trans_local == null) {
+                encl.trans_local = List.nil();
+            }
+            encl.trans_local = encl.trans_local.prepend(currentClass);
+        }
+
         // Recursively translate members, taking into account that new members
         // might be created during the translation and prepended to the member
         // list `tree.defs'.

--- a/langtools/src/share/classes/com/sun/tools/javac/jvm/ClassWriter.java	Tue Sep 13 14:14:57 2011 +0100
+++ b/langtools/src/share/classes/com/sun/tools/javac/jvm/ClassWriter.java	Tue Sep 13 14:15:22 2011 +0100
@@ -863,10 +863,10 @@
         }
         if (c.type.tag != CLASS) return; // arrays
         if (pool != null && // pool might be null if called from xClassName
-            c.owner.kind != PCK &&
+            c.owner.enclClass() != null &&
             (innerClasses == null || !innerClasses.contains(c))) {
 //          log.errWriter.println("enter inner " + c);//DEBUG
-            if (c.owner.kind == TYP) enterInner((ClassSymbol)c.owner);
+            enterInner(c.owner.enclClass());
             pool.put(c);
             pool.put(c.name);
             if (innerClasses == null) {
@@ -1505,6 +1505,13 @@
             default : Assert.error();
             }
         }
+
+        if (c.trans_local != null) {
+            for (ClassSymbol local : c.trans_local) {
+                enterInner(local);
+            }
+        }
+
         databuf.appendChar(fieldsCount);
         writeFields(c.members().elems);
         databuf.appendChar(methodsCount);

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/langtools/test/tools/javac/7003595/T7003595.java	Tue Sep 13 14:15:22 2011 +0100
@@ -0,0 +1,233 @@
+/*
+ * Copyright (c) 2011, 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 7003595
+ * @summary IncompatibleClassChangeError with unreferenced local class with subclass
+ */
+
+import com.sun.source.util.JavacTask;
+import com.sun.tools.classfile.Attribute;
+import com.sun.tools.classfile.ClassFile;
+import com.sun.tools.classfile.InnerClasses_attribute;
+import com.sun.tools.classfile.ConstantPool.*;
+import com.sun.tools.javac.api.JavacTool;
+
+import java.io.File;
+import java.net.URI;
+import java.util.Arrays;
+import java.util.ArrayList;
+import javax.tools.JavaCompiler;
+import javax.tools.JavaFileObject;
+import javax.tools.SimpleJavaFileObject;
+import javax.tools.StandardJavaFileManager;
+import javax.tools.ToolProvider;
+
+
+public class T7003595 {
+
+    /** global decls ***/
+
+    // Create a single file manager and reuse it for each compile to save time.
+    static StandardJavaFileManager fm = JavacTool.create().getStandardFileManager(null, null, null);
+
+    //statistics
+    static int checkCount = 0;
+
+    enum ClassKind {
+        NESTED("static class #N { #B }", "$", true),
+        INNER("class #N { #B }", "$", false),
+        LOCAL_REF("void test() { class #N { #B }; new #N(); }", "$1", false),
+        LOCAL_NOREF("void test() { class #N { #B }; }", "$1", false),
+        ANON("void test() { new Object() { #B }; }", "$1", false),
+        NONE("", "", false);
+
+        String memberInnerStr;
+        String sep;
+        boolean staticAllowed;
+
+        private ClassKind(String memberInnerStr, String sep, boolean staticAllowed) {
+            this.memberInnerStr = memberInnerStr;
+            this.sep = sep;
+            this.staticAllowed = staticAllowed;
+        }
+
+        String getSource(String className, String outerName, String nested) {
+            return memberInnerStr.replaceAll("#O", outerName).
+                    replaceAll("#N", className).replaceAll("#B", nested);
+        }
+
+        static String getClassfileName(String[] names, ClassKind[] outerKinds, int pos) {
+            System.out.println(" pos = " + pos + " kind = " + outerKinds[pos] + " sep = " + outerKinds[pos].sep);
+            String name = outerKinds[pos] != ANON ?
+                    names[pos] : "";
+            if (pos == 0) {
+                return "Test" + outerKinds[pos].sep + name;
+            } else {
+                String outerStr = getClassfileName(names, outerKinds, pos - 1);
+                return outerStr + outerKinds[pos].sep + name;
+            }
+        }
+
+        boolean isAllowed(ClassKind nestedKind) {
+            return nestedKind != NESTED ||
+                    staticAllowed;
+        }
+    }
+
+    enum LocalInnerClass {
+        LOCAL_REF("class L {}; new L();", "Test$1L"),
+        LOCAL_NOREF("class L {};", "Test$1L"),
+        ANON("new Object() {};", "Test$1"),
+        NONE("", "");
+
+        String localInnerStr;
+        String canonicalInnerStr;
+
+        private LocalInnerClass(String localInnerStr, String canonicalInnerStr) {
+            this.localInnerStr = localInnerStr;
+            this.canonicalInnerStr = canonicalInnerStr;
+        }
+    }
+
+    public static void main(String... args) throws Exception {
+        for (ClassKind ck1 : ClassKind.values()) {
+            String cname1 = "C1";
+            for (ClassKind ck2 : ClassKind.values()) {
+                if (!ck1.isAllowed(ck2)) continue;
+                String cname2 = "C2";
+                for (ClassKind ck3 : ClassKind.values()) {
+                    if (!ck2.isAllowed(ck3)) continue;
+                    String cname3 = "C3";
+                    new T7003595(new ClassKind[] {ck1, ck2, ck3}, new String[] { cname1, cname2, cname3 }).compileAndCheck();
+                }
+            }
+        }
+
+        System.out.println("Total checks made: " + checkCount);
+    }
+
+    /** instance decls **/
+
+    ClassKind[] cks;
+    String[] cnames;
+
+    T7003595(ClassKind[] cks, String[] cnames) {
+        this.cks = cks;
+        this.cnames = cnames;
+    }
+
+    void compileAndCheck() throws Exception {
+        final JavaCompiler tool = ToolProvider.getSystemJavaCompiler();
+        JavaSource source = new JavaSource();
+        JavacTask ct = (JavacTask)tool.getTask(null, fm, null,
+                null, null, Arrays.asList(source));
+        ct.call();
+        verifyBytecode(source);
+    }
+
+    void verifyBytecode(JavaSource source) {
+        for (int i = 0; i < 3 ; i ++) {
+            if (cks[i] == ClassKind.NONE) break;
+            checkCount++;
+            String filename = cks[i].getClassfileName(cnames, cks, i);
+            File compiledTest = new File(filename + ".class");
+            try {
+                ClassFile cf = ClassFile.read(compiledTest);
+                if (cf == null) {
+                    throw new Error("Classfile not found: " + filename);
+                }
+
+                InnerClasses_attribute innerClasses = (InnerClasses_attribute)cf.getAttribute(Attribute.InnerClasses);
+
+                ArrayList<String> foundInnerSig = new ArrayList<>();
+                if (innerClasses != null) {
+                    for (InnerClasses_attribute.Info info : innerClasses.classes) {
+                        String foundSig = info.getInnerClassInfo(cf.constant_pool).getName();
+                        foundInnerSig.add(foundSig);
+                    }
+                }
+
+                ArrayList<String> expectedInnerSig = new ArrayList<>();
+                //add inner class (if any)
+                if (i < 2 && cks[i + 1] != ClassKind.NONE) {
+                    expectedInnerSig.add(cks[i + 1].getClassfileName(cnames, cks, i + 1));
+                }
+                //add inner classes
+                for (int j = 0 ; j != i + 1 && j < 3; j++) {
+                    expectedInnerSig.add(cks[j].getClassfileName(cnames, cks, j));
+                }
+
+                if (expectedInnerSig.size() != foundInnerSig.size()) {
+                    throw new Error("InnerClasses attribute for " + cnames[i] + " has wrong size\n" +
+                                    "expected " + expectedInnerSig.size() + "\n" +
+                                    "found " + innerClasses.number_of_classes + "\n" +
+                                    source);
+                }
+
+                for (String foundSig : foundInnerSig) {
+                    if (!expectedInnerSig.contains(foundSig)) {
+                        throw new Error("InnerClasses attribute for " + cnames[i] + " has unexpected signature: " +
+                                foundSig + "\n" + source + "\n" + expectedInnerSig);
+                    }
+                }
+
+                for (String expectedSig : expectedInnerSig) {
+                    if (!foundInnerSig.contains(expectedSig)) {
+                        throw new Error("InnerClasses attribute for " + cnames[i] + " does not contain expected signature: " +
+                                    expectedSig + "\n" + source);
+                    }
+                }
+            } catch (Exception e) {
+                e.printStackTrace();
+                throw new Error("error reading " + compiledTest +": " + e);
+            }
+        }
+    }
+
+    class JavaSource extends SimpleJavaFileObject {
+
+        static final String source_template = "class Test { #C }";
+
+        String source;
+
+        public JavaSource() {
+            super(URI.create("myfo:/Test.java"), JavaFileObject.Kind.SOURCE);
+            String c3 = cks[2].getSource(cnames[2], cnames[1], "");
+            String c2 = cks[1].getSource(cnames[1], cnames[0], c3);
+            String c1 = cks[0].getSource(cnames[0], "Test", c2);
+            source = source_template.replace("#C", c1);
+        }
+
+        @Override
+        public String toString() {
+            return source;
+        }
+
+        @Override
+        public CharSequence getCharContent(boolean ignoreEncodingErrors) {
+            return source;
+        }
+    }
+}

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/langtools/test/tools/javac/7003595/T7003595b.java	Tue Sep 13 14:15:22 2011 +0100
@@ -0,0 +1,36 @@
+/*
+ * Copyright (c) 2011, 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 7003595
+ * @summary IncompatibleClassChangeError with unreferenced local class with subclass
+ */
+
+public class T7003595b {
+    public static void main(String... args) throws Exception {
+        class A {}
+        class B extends A {}
+        B.class.getSuperclass().getDeclaringClass();
+    }
+}