diff --git a/CodeSniffer/Standards/Squiz/Sniffs/Classes/SelfMemberReferenceSniff.php b/CodeSniffer/Standards/Squiz/Sniffs/Classes/SelfMemberReferenceSniff.php
index e7ffea88bd..57a73e274b 100644
--- a/CodeSniffer/Standards/Squiz/Sniffs/Classes/SelfMemberReferenceSniff.php
+++ b/CodeSniffer/Standards/Squiz/Sniffs/Classes/SelfMemberReferenceSniff.php
@@ -77,10 +77,13 @@ protected function processTokenWithinScope(PHP_CodeSniffer_File $phpcsFile, $sta
             // Make sure this is another class reference.
             $declarationName = $phpcsFile->getDeclarationName($currScope);
             if ($declarationName === $tokens[$className]['content']) {
-                // Class name is the same as the current class.
-                $error = 'Must use "self::" for local static member reference';
-                $phpcsFile->addError($error, $className, 'NotUsed');
-                return;
+                // Class name is the same as the current class, which is not allowed
+                // except if being used inside a closure.
+                if ($phpcsFile->hasCondition($stackPtr, T_CLOSURE) === false) {
+                    $error = 'Must use "self::" for local static member reference';
+                    $phpcsFile->addError($error, $className, 'NotUsed');
+                    return;
+                }
             }
         }
 
diff --git a/CodeSniffer/Standards/Squiz/Tests/Classes/SelfMemberReferenceUnitTest.inc b/CodeSniffer/Standards/Squiz/Tests/Classes/SelfMemberReferenceUnitTest.inc
index c7eeaa54de..460794c56d 100644
--- a/CodeSniffer/Standards/Squiz/Tests/Classes/SelfMemberReferenceUnitTest.inc
+++ b/CodeSniffer/Standards/Squiz/Tests/Classes/SelfMemberReferenceUnitTest.inc
@@ -45,4 +45,23 @@ class SelfMemberReferenceUnitTestExample
 }
 
 
+class MyClass {
+
+    public static function test($value) {
+        echo "$value\n";
+    }
+
+    public static function walk() {
+        $callback = function($value, $key) {
+                        // This is valid because you cant use self:: in a closure
+                        MyClass::test($value);
+                    };
+
+        $array = array(1,2,3);
+        array_walk($array, $callback);
+    }
+}
+
+MyClass::walk();
+
 ?>
\ No newline at end of file
diff --git a/CodeSniffer/Tokenizers/PHP.php b/CodeSniffer/Tokenizers/PHP.php
index cd3d59ec29..990b6d93ad 100644
--- a/CodeSniffer/Tokenizers/PHP.php
+++ b/CodeSniffer/Tokenizers/PHP.php
@@ -451,10 +451,23 @@ public function processAdditional(&$tokens, $eolChar)
 
                 if ($tokens[$x]['code'] === T_OPEN_PARENTHESIS) {
                     $tokens[$i]['code'] = T_CLOSURE;
+                    $tokens[$i]['type'] = 'T_CLOSURE';
                     if (PHP_CODESNIFFER_VERBOSITY > 1) {
                         $line = $tokens[$i]['line'];
                         echo "\t* token $i on line $line changed from T_FUNCTION to T_CLOSURE".PHP_EOL;
                     }
+
+                    for ($x = ($tokens[$i]['scope_opener'] + 1); $x < $tokens[$i]['scope_closer']; $x++) {
+                        if (isset($tokens[$x]['conditions'][$i]) === false) {
+                            continue;
+                        }
+
+                        $tokens[$x]['conditions'][$i] = T_CLOSURE;
+                        if (PHP_CODESNIFFER_VERBOSITY > 1) {
+                            $type = $tokens[$x]['type'];
+                            echo "\t\t* cleaned $x ($type) *".PHP_EOL;
+                        }
+                    }
                 }
 
                 continue;
diff --git a/package.xml b/package.xml
index 604bdf63a4..6911cb59cc 100644
--- a/package.xml
+++ b/package.xml
@@ -44,6 +44,8 @@ http://pear.php.net/dtd/package-2.0.xsd">
   - Squiz FileCommentSniff now enforces rule that package names cannot start with the word Squiz
   - Fixed issue in Squiz FileCommentSniff where suggested package name was the same as the incorrect package name
   - Fixed some issues with Squiz ArrayDeclarationSniff when using function calls in array values
+  - Fixed bug #18465 : "self::" does not work in lambda functions
+    -- Also corrects conversion of T_FUNCTION tokens to T_CLOSURE, which was not fixing token condition arrays
  </notes>
  <contents>
   <dir name="/">