diff --git a/core/src/main/java/org/teavm/model/analysis/EscapeAnalysis.java b/core/src/main/java/org/teavm/model/analysis/EscapeAnalysis.java
index 4869b2ad8..2936eafe5 100644
--- a/core/src/main/java/org/teavm/model/analysis/EscapeAnalysis.java
+++ b/core/src/main/java/org/teavm/model/analysis/EscapeAnalysis.java
@@ -63,6 +63,7 @@ import org.teavm.model.instructions.PutFieldInstruction;
 import org.teavm.model.instructions.RaiseInstruction;
 import org.teavm.model.instructions.StringConstantInstruction;
 import org.teavm.model.instructions.UnwrapArrayInstruction;
+import org.teavm.model.util.DefinitionExtractor;
 import org.teavm.model.util.InstructionTransitionExtractor;
 import org.teavm.model.util.LivenessAnalyzer;
 import org.teavm.model.util.UsageExtractor;
@@ -122,8 +123,31 @@ public class EscapeAnalysis {
         GraphBuilder graphBuilder = new GraphBuilder(program.variableCount());
         IntDeque queue = new IntArrayDeque();
         for (BasicBlock block : program.getBasicBlocks()) {
-            IntSet sharedIncomingVars = new IntOpenHashSet();
             BitSet usedVars = getUsedVarsInBlock(livenessAnalyzer, block);
+
+            // For instructions like A = B if B lives after instruction, mark both A and B as escaping
+            UsageExtractor useExtractor = new UsageExtractor();
+            DefinitionExtractor defExtractor = new DefinitionExtractor();
+            for (Instruction insn = block.getLastInstruction(); insn != null; insn = insn.getPrevious()) {
+                if (insn instanceof AssignInstruction) {
+                    AssignInstruction assign = (AssignInstruction) insn;
+                    if (usedVars.get(assign.getAssignee().getIndex())) {
+                        queue.addLast(definitionClasses[assign.getAssignee().getIndex()]);
+                    }
+                }
+
+                insn.acceptVisitor(useExtractor);
+                insn.acceptVisitor(defExtractor);
+                for (Variable var : useExtractor.getUsedVariables()) {
+                    usedVars.set(var.getIndex());
+                }
+                for (Variable var : defExtractor.getDefinedVariables()) {
+                    usedVars.clear(var.getIndex());
+                }
+            }
+
+            // If incoming variables of phi functions live after phi, mark them as escaping
+            IntSet sharedIncomingVars = new IntOpenHashSet();
             for (Phi phi : block.getPhis()) {
                 if (escapes(phi.getReceiver().getIndex())) {
                     queue.addLast(definitionClasses[phi.getReceiver().getIndex()]);
@@ -165,13 +189,6 @@ public class EscapeAnalysis {
             usedVars.or(liveness.liveIn(tryCatch.getHandler().getIndex()));
         }
 
-        UsageExtractor useExtractor = new UsageExtractor();
-        for (Instruction instruction : block) {
-            instruction.acceptVisitor(useExtractor);
-            for (Variable variable : useExtractor.getUsedVariables()) {
-                usedVars.set(variable.getIndex());
-            }
-        }
         return usedVars;
     }
 
diff --git a/core/src/test/java/org/teavm/model/optimization/test/ScalarReplacementTest.java b/core/src/test/java/org/teavm/model/optimization/test/ScalarReplacementTest.java
index bbdd3fbc3..4817fc3c7 100644
--- a/core/src/test/java/org/teavm/model/optimization/test/ScalarReplacementTest.java
+++ b/core/src/test/java/org/teavm/model/optimization/test/ScalarReplacementTest.java
@@ -67,6 +67,11 @@ public class ScalarReplacementTest {
         doTest();
     }
 
+    @Test
+    public void escapingLivingAssignmentSource() {
+        doTest();
+    }
+
     @Test
     public void copy() {
         doTest();
diff --git a/core/src/test/resources/model/optimization/scalar-replacement/copy.expected.txt b/core/src/test/resources/model/optimization/scalar-replacement/copy.expected.txt
index 248f38246..e815faf7f 100644
--- a/core/src/test/resources/model/optimization/scalar-replacement/copy.expected.txt
+++ b/core/src/test/resources/model/optimization/scalar-replacement/copy.expected.txt
@@ -11,5 +11,4 @@ $start
     @b$bar_1 := @tmp2
     @r := @b$foo
     @s := @b$bar_1
-    @t := @a$bar
     return @r
\ No newline at end of file
diff --git a/core/src/test/resources/model/optimization/scalar-replacement/copy.original.txt b/core/src/test/resources/model/optimization/scalar-replacement/copy.original.txt
index 7ba0b7589..6dc938e44 100644
--- a/core/src/test/resources/model/optimization/scalar-replacement/copy.original.txt
+++ b/core/src/test/resources/model/optimization/scalar-replacement/copy.original.txt
@@ -9,5 +9,4 @@ $start
     field A.bar @b := @tmp2 as I
     @r := field A.foo @b as I
     @s := field A.bar @b as I
-    @t := field A.bar @a as I
     return @r
\ No newline at end of file
diff --git a/core/src/test/resources/model/optimization/scalar-replacement/escapingLivingAssignmentSource.expected.txt b/core/src/test/resources/model/optimization/scalar-replacement/escapingLivingAssignmentSource.expected.txt
new file mode 100644
index 000000000..3a16a377a
--- /dev/null
+++ b/core/src/test/resources/model/optimization/scalar-replacement/escapingLivingAssignmentSource.expected.txt
@@ -0,0 +1,10 @@
+var @this as this
+
+$start
+    @first := new A
+    field A.foo @first := @this as `Ljava/lang/Object;`
+    @second := @first
+    @t := null
+    field A.foo @first := @t as `Ljava/lang/Object;`
+    @s := field A.foo @second as `Ljava/lang/Object;`
+    return @s
\ No newline at end of file
diff --git a/core/src/test/resources/model/optimization/scalar-replacement/escapingLivingAssignmentSource.original.txt b/core/src/test/resources/model/optimization/scalar-replacement/escapingLivingAssignmentSource.original.txt
new file mode 100644
index 000000000..3a16a377a
--- /dev/null
+++ b/core/src/test/resources/model/optimization/scalar-replacement/escapingLivingAssignmentSource.original.txt
@@ -0,0 +1,10 @@
+var @this as this
+
+$start
+    @first := new A
+    field A.foo @first := @this as `Ljava/lang/Object;`
+    @second := @first
+    @t := null
+    field A.foo @first := @t as `Ljava/lang/Object;`
+    @s := field A.foo @second as `Ljava/lang/Object;`
+    return @s
\ No newline at end of file