diff --git a/lang/interpret_test/TestAstFunc2/lexer-parser0.txtar b/lang/interpret_test/TestAstFunc2/lexer-parser0.txtar
index eaf4aed5bc..8e60e5fa23 100644
--- a/lang/interpret_test/TestAstFunc2/lexer-parser0.txtar
+++ b/lang/interpret_test/TestAstFunc2/lexer-parser0.txtar
@@ -1,16 +1,16 @@
 -- main.mcl --
 import "fmt"
-# unfortunately, for now `in` is a reserved keyword, see:
-# https://github.com/purpleidea/mgmt/issues/728
 $map = 55
-$fn = func($in) { # in is a special keyword
+# in is a special keyword, but accepted in a variable name
+$fn = func($in) {
 	13
 }
 test fmt.printf("%d", $fn(0)) {}
-func fn($in) { # in is a special keyword
+func fn($in) {
 	42 + $map
 }
 test fmt.printf("%d", $fn(0)) {}
 test fmt.printf("%d", fn(0)) {}
 -- OUTPUT --
-# err: errLexParse: parser: `syntax error: unexpected IN, expecting MAP_IDENTIFIER or IDENTIFIER` @5:2
+Vertex: test[13]
+Vertex: test[97]
diff --git a/lang/parser/lexer.nex b/lang/parser/lexer.nex
index b0f1a9b7cd..73ac3273fb 100644
--- a/lang/parser/lexer.nex
+++ b/lang/parser/lexer.nex
@@ -159,6 +159,15 @@
 			lval.str = yylex.Text()
 			return ARROW
 		}
+/\$[a-z0-9_\.]+/	{
+			yylex.pos(lval) // our pos
+			// drop the dollar sign
+			lval.str = strings.TrimLeft(yylex.Text(), "$")
+			if strings.Contains(lval.str, ".") {
+				return DOTTED_VARNAME
+			}
+			return UNDOTTED_VARNAME
+		}
 /\./		{
 			yylex.pos(lval) // our pos
 			lval.str = yylex.Text()
@@ -168,11 +177,7 @@
 			}
 			return DOT
 		}
-/\$/		{
-			yylex.pos(lval) // our pos
-			lval.str = yylex.Text()
-			return DOLLAR
-		}
+
 /bool/		{
 			yylex.pos(lval) // our pos
 			lval.str = yylex.Text()
diff --git a/lang/parser/lexparse.go b/lang/parser/lexparse.go
index 892afad256..542db4a3a1 100644
--- a/lang/parser/lexparse.go
+++ b/lang/parser/lexparse.go
@@ -54,6 +54,7 @@ const (
 	ErrParseError             = interfaces.Error("parser")
 	ErrParseSetType           = interfaces.Error("can't set return type in parser")
 	ErrParseResFieldInvalid   = interfaces.Error("can't use unknown resource field")
+	ErrInvalidVariableName    = interfaces.Error("invalid variable name")
 	ErrParseAdditionalEquals  = interfaces.Error(errstrParseAdditionalEquals)
 	ErrParseExpectingComma    = interfaces.Error(errstrParseExpectingComma)
 )
diff --git a/lang/parser/parser.y b/lang/parser/parser.y
index 057d2a5fa8..cdb9a29374 100644
--- a/lang/parser/parser.y
+++ b/lang/parser/parser.y
@@ -93,7 +93,8 @@ func init() {
 %token OPEN_BRACK CLOSE_BRACK
 %token IF ELSE
 %token BOOL STRING INTEGER FLOAT
-%token EQUALS DOLLAR
+%token EQUALS DOTTED_VARNAME
+%token UNDOTTED_VARNAME
 %token COMMA COLON SEMICOLON
 %token ELVIS DEFAULT ROCKET ARROW DOT
 %token BOOL_IDENTIFIER STR_IDENTIFIER INT_IDENTIFIER FLOAT_IDENTIFIER
@@ -1406,11 +1407,13 @@ undotted_identifier:
 	}
 ;
 var_identifier:
-	// eg: $ foo (dollar prefix + identifier)
-	DOLLAR undotted_identifier
+	UNDOTTED_VARNAME
 	{
 		posLast(yylex, yyDollar) // our pos
-		$$.str = $2.str // don't include the leading $
+		if $1.str == "" || strings.HasPrefix($1.str, "_") || strings.HasSuffix($1.str, "_") {
+			yylex.Error(fmt.Sprintf("%s: %s", ErrInvalidVariableName, $1.str))
+		}
+		$$.str = $1.str
 	}
 ;
 colon_identifier:
@@ -1439,13 +1442,24 @@ dotted_identifier:
 		$$.str = $1.str + interfaces.ModuleSep + $3.str
 	}
 ;
-// there are different ways the lexer/parser might choose to represent this...
 dotted_var_identifier:
-	// eg: $ foo.bar.baz (dollar prefix + dotted identifier)
-	DOLLAR dotted_identifier
+	DOTTED_VARNAME
+	{
+		posLast(yylex, yyDollar) // our pos
+		for _, ident := range strings.Split($1.str, ".") {
+			if ident == "" || strings.HasPrefix(ident, "_") || strings.HasSuffix(ident, "_") {
+				yylex.Error(fmt.Sprintf("%s: %s", ErrInvalidVariableName, $1.str))
+			}
+		}
+		$$.str = $1.str
+	}
+|	UNDOTTED_VARNAME
 	{
 		posLast(yylex, yyDollar) // our pos
-		$$.str = $2.str // don't include the leading $
+		if $1.str == "" || strings.HasPrefix($1.str, "_") || strings.HasSuffix($1.str, "_") {
+			yylex.Error(fmt.Sprintf("%s: %s", ErrInvalidVariableName, $1.str))
+		}
+		$$.str = $1.str
 	}
 ;
 capitalized_res_identifier: