diff --git a/indra/newview/llfloaterimsessiontab.cpp b/indra/newview/llfloaterimsessiontab.cpp
index 0dd61568f9e0e90dff9f970511d9fe85647fc56e..eab2ce7798cb11f3628455632b3956518f96b46b 100644
--- a/indra/newview/llfloaterimsessiontab.cpp
+++ b/indra/newview/llfloaterimsessiontab.cpp
@@ -196,12 +196,29 @@ void LLFloaterIMSessionTab::addToHost(const LLUUID& session_id)
 	}
 }
 
+void LLFloaterIMSessionTab::assignResizeLimits()
+{
+	bool is_participants_pane_collapsed = mParticipantListPanel->isCollapsed();
+
+    // disable a layoutstack's functionality when participant list panel is collapsed
+	mRightPartPanel->setIgnoreReshape(is_participants_pane_collapsed);
+
+    S32 participants_pane_target_width = is_participants_pane_collapsed?
+    		0 : (mParticipantListPanel->getRect().getWidth() + LLPANEL_BORDER_WIDTH);
+
+    S32 new_min_width = participants_pane_target_width + mRightPartPanel->getExpandedMinDim() + mFloaterExtraWidth;
+
+	setResizeLimits(new_min_width, getMinHeight());
+
+	this->mParticipantListAndHistoryStack->updateLayout();
+}
+
 BOOL LLFloaterIMSessionTab::postBuild()
 {
 	BOOL result;
 
 	mBodyStack = getChild<LLLayoutStack>("main_stack");
-
+    mParticipantListAndHistoryStack = getChild<LLLayoutStack>("im_panels");
 
 	mCloseBtn = getChild<LLButton>("close_btn");
 	mCloseBtn->setCommitCallback(boost::bind(&LLFloater::onClickClose, this));
@@ -218,6 +235,8 @@ BOOL LLFloaterIMSessionTab::postBuild()
 	mGearBtn = getChild<LLButton>("gear_btn");
 
 	mParticipantListPanel = getChild<LLLayoutPanel>("speakers_list_panel");
+	mRightPartPanel = getChild<LLLayoutPanel>("right_part_holder");
+
 	mToolbarPanel = getChild<LLLayoutPanel>("toolbar_panel");
 	mContentPanel = getChild<LLLayoutPanel>("body_panel");
 	mInputButtonPanel = getChild<LLLayoutPanel>("input_button_layout_panel");
@@ -297,6 +316,15 @@ BOOL LLFloaterIMSessionTab::postBuild()
 		LLFloaterIMSessionTab::onSlide(this);
 	}
 
+	// The resize limits for LLFloaterIMSessionTab should be updated, based on current values of width of conversation and message panels
+	mParticipantListPanel->getResizeBar()->setResizeListener(boost::bind(&LLFloaterIMSessionTab::assignResizeLimits, this));
+	mFloaterExtraWidth =
+			getRect().getWidth()
+			- mParticipantListAndHistoryStack->getRect().getWidth()
+			- (mParticipantListPanel->isCollapsed()? 0 : LLPANEL_BORDER_WIDTH);
+
+	assignResizeLimits();
+
 	return result;
 }
 
@@ -669,8 +697,7 @@ void LLFloaterIMSessionTab::updateHeaderAndToolbar()
 			&& mIsParticipantListExpanded
 			&& !mIsP2PChat;
 
-	mParticipantListPanel->setVisible(is_participant_list_visible);
-
+	mParticipantListAndHistoryStack->collapsePanel(mParticipantListPanel, !is_participant_list_visible);
 
 	// Display collapse image (<<) if the floater is hosted
 	// or if it is torn off but has an open control panel.
@@ -791,15 +818,18 @@ void LLFloaterIMSessionTab::onSlide(LLFloaterIMSessionTab* self)
 	{
 		if (!self->mIsP2PChat)
 		{
-			bool expand = !self->mParticipantListPanel->getVisible();
-
-			// Expand/collapse the IM control panel
-			self->mParticipantListPanel->setVisible(expand);
-            gSavedSettings.setBOOL("IMShowControlPanel", expand);
-            self->mIsParticipantListExpanded = expand;
-			self->mExpandCollapseBtn->setImageOverlay(self->getString(expand ? "collapse_icon" : "expand_icon"));
+            bool should_be_expanded = self->mParticipantListPanel->isCollapsed();
+
+			// Expand/collapse the participant list panel
+            self->mParticipantListAndHistoryStack->collapsePanel(self->mParticipantListPanel, !should_be_expanded);
+            self->mParticipantListPanel->setVisible(should_be_expanded);
+            gSavedSettings.setBOOL("IMShowControlPanel", should_be_expanded);
+            self->mIsParticipantListExpanded = should_be_expanded;
+			self->mExpandCollapseBtn->setImageOverlay(self->getString(should_be_expanded ? "collapse_icon" : "expand_icon"));
 		}
 	}
+
+	self->assignResizeLimits();
 }
 
 void LLFloaterIMSessionTab::onCollapseToLine(LLFloaterIMSessionTab* self)
diff --git a/indra/newview/llfloaterimsessiontab.h b/indra/newview/llfloaterimsessiontab.h
index e9393c53368fd7f0db584596b02bfc657d370491..f0899a3c0934ae0d1fa6ded9c02c18880c69efc4 100644
--- a/indra/newview/llfloaterimsessiontab.h
+++ b/indra/newview/llfloaterimsessiontab.h
@@ -140,6 +140,9 @@ class LLFloaterIMSessionTab
 	void appendMessage(const LLChat& chat, const LLSD &args = 0);
 
 	std::string appendTime();
+	void assignResizeLimits();
+
+	S32  mFloaterExtraWidth;
 
 	bool mIsNearbyChat;
 	bool mIsP2PChat;
@@ -155,7 +158,9 @@ class LLFloaterIMSessionTab
 	
 	LLUUID mSessionID; 
 	LLLayoutStack* mBodyStack;
+	LLLayoutStack* mParticipantListAndHistoryStack;
 	LLLayoutPanel* mParticipantListPanel;	// add the widgets to that see mConversationsListPanel
+	LLLayoutPanel* mRightPartPanel;
 	LLLayoutPanel* mContentPanel;
 	LLLayoutPanel* mToolbarPanel;
 	LLLayoutPanel* mInputButtonPanel;
diff --git a/indra/newview/skins/default/xui/en/floater_im_session.xml b/indra/newview/skins/default/xui/en/floater_im_session.xml
index 1ad54bdb6b84c5fb99b05a09180ee1e4afedfeb5..d8b085063f7bfd3445f110a8b16edaf1130901b6 100644
--- a/indra/newview/skins/default/xui/en/floater_im_session.xml
+++ b/indra/newview/skins/default/xui/en/floater_im_session.xml
@@ -14,7 +14,6 @@
  width="394"
  can_resize="true"
  can_tear_off="false"
- min_width="340"
  min_height="190"
  positioning="relative">
     <floater.string name="call_btn_start">Conv_toolbar_open_call</floater.string>
@@ -223,9 +222,10 @@
     <layout_panel
       name="speakers_list_panel"
       follows="all"
-      min_width="115"
+      expanded_min_dim="115"
+      min_dim="0"
       width="150" 
-      height="275" 
+      height="275"
       user_resize="true"
       auto_resize="false">
       </layout_panel>
@@ -241,7 +241,7 @@
        user_resize="true"
        auto_resize="true"
        visible="true"
-       name="left_part_holder"
+       name="right_part_holder"
        min_width="221">
         <panel
          name="trnsAndChat_panel"