diff --git a/src/java.base/share/classes/javax/crypto/CryptoPolicyParser.java b/src/java.base/share/classes/javax/crypto/CryptoPolicyParser.java
index 26d4696f9b6ad..2ca1537f74bcf 100644
--- a/src/java.base/share/classes/javax/crypto/CryptoPolicyParser.java
+++ b/src/java.base/share/classes/javax/crypto/CryptoPolicyParser.java
@@ -71,6 +71,7 @@ final class CryptoPolicyParser {
     // Convenience variables for parsing
     private StreamTokenizer st;
     private int lookahead;
+    private boolean allPermEntryFound = false;
 
     /**
      * Creates a CryptoPolicyParser object.
@@ -129,7 +130,7 @@ void read(Reader policy)
          * The crypto jurisdiction policy must be consistent. The
          * following hashtable is used for checking consistency.
          */
-        Hashtable<String, Vector<String>> processedPermissions = null;
+        Hashtable<String, Vector<String>> processedPermissions = new Hashtable<>();
 
         /*
          * The main parsing loop.  The loop is executed once for each entry
@@ -191,6 +192,16 @@ private CryptoPermissionEntry parsePermissionEntry(
         e.cryptoPermission = match("permission type");
 
         if (e.cryptoPermission.equals("javax.crypto.CryptoAllPermission")) {
+            /*
+             * This catches while processing the "javax.crypto.CryptoAllPermission"
+             * entry, but the "processedPermissions" Hashtable already contains
+             * an entry for "javax.crypto.CryptoPermission".
+             */
+            if (!processedPermissions.isEmpty()) {
+                throw new ParsingException(st.lineno(), "Inconsistent policy");
+            }
+            allPermEntryFound = true;
+
             // Done with the CryptoAllPermission entry.
             e.alg = CryptoAllPermission.ALG_NAME;
             e.maxKeySize = Integer.MAX_VALUE;
@@ -494,18 +505,21 @@ private boolean isConsistent(String alg, String exemptionMechanism,
         String thisExemptionMechanism =
             exemptionMechanism == null ? "none" : exemptionMechanism;
 
-        if (processedPermissions == null) {
-            processedPermissions = new Hashtable<>();
+        /*
+         * This catches while processing a "javax.crypto.CryptoPermission" entry, but
+         * "javax.crypto.CryptoAllPermission" entry already exists.
+         */
+        if (allPermEntryFound) {
+            return false;
+        }
+
+        if (processedPermissions.isEmpty()) {
             Vector<String> exemptionMechanisms = new Vector<>(1);
             exemptionMechanisms.addElement(thisExemptionMechanism);
             processedPermissions.put(alg, exemptionMechanisms);
             return true;
         }
 
-        if (processedPermissions.containsKey(CryptoAllPermission.ALG_NAME)) {
-            return false;
-        }
-
         Vector<String> exemptionMechanisms;
 
         if (processedPermissions.containsKey(alg)) {
diff --git a/test/jdk/javax/crypto/CryptoPermissions/InconsistentEntries.java b/test/jdk/javax/crypto/CryptoPermissions/InconsistentEntries.java
new file mode 100644
index 0000000000000..e501436f736c5
--- /dev/null
+++ b/test/jdk/javax/crypto/CryptoPermissions/InconsistentEntries.java
@@ -0,0 +1,79 @@
+/*
+ * Copyright (c) 2022, 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.  Oracle designates this
+ * particular file as subject to the "Classpath" exception as provided
+ * by Oracle in the LICENSE file that accompanied this code.
+ *
+ * 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 8286779
+ * @summary Test limited/default_local.policy containing inconsistent entries
+ * @run main/manual InconsistentEntries
+ */
+import javax.crypto.*;
+import java.io.File;
+import java.nio.file.Files;
+import java.nio.file.Path;
+import java.security.Security;
+
+public class InconsistentEntries {
+
+    public static void main(String[] args) throws Exception {
+        System.out.println("***********************************************************");
+        System.out.println("// This is a manual test to test a custom \"default_local.policy\" containing inconsistent entries");
+        System.out.println("// under a new subfolder \"$JAVA_HOME/conf/security/policy\" directory.");
+        System.out.println("// This test fails when the policy directory \"testlimited\" or the policy \"default_local.policy");
+        System.out.println("// does not exist or is empty.");
+        System.out.println("// - Create a new subfolder \"testlimited\" under \"$JAVA_HOME/conf/security/policy\"");
+        System.out.println("// - Place the custom \"default_local.policy\" under \"testlimited\" directory");
+        System.out.println("// - default_local.policy contains:");
+        System.out.println("//   grant {");
+        System.out.println("//       permission javax.crypto.CryptoAllPermission;");
+        System.out.println("//       permission javax.crypto.CryptoPermission \"DES\", 64;");
+        System.out.println("//   };");
+        System.out.println("***********************************************************");
+
+        String JAVA_HOME = System.getProperty("java.home");
+        String FS = System.getProperty("file.separator");
+        Path testlimited = Path.of(JAVA_HOME + FS + "conf" + FS + "security" +
+                FS + "policy" + FS + "testlimited");
+        if (!Files.exists(testlimited)) {
+            throw new RuntimeException("custom policy subdirectory: testlimited does not exist");
+        }
+
+        File testpolicy = new File(JAVA_HOME + FS + "conf" + FS + "security" +
+                FS + "policy" + FS + "testlimited" + FS + "default_local.policy");
+        if (testpolicy.length() == 0) {
+            throw new RuntimeException("policy: default_local.policy does not exist or is empty");
+        }
+
+        Security.setProperty("crypto.policy", "testlimited");
+
+        try {
+            int maxKeyLen = Cipher.getMaxAllowedKeyLength("AES");
+            throw new RuntimeException("Should fail due to inconsistent entries in policy file");
+        } catch (ExceptionInInitializerError e) {
+            e.printStackTrace();
+            System.out.println("Test completed successfully");
+        }
+    }
+}