diff --git a/misc/emacs/nix-mode.el b/misc/emacs/nix-mode.el
index f874370a67..d98353177c 100644
--- a/misc/emacs/nix-mode.el
+++ b/misc/emacs/nix-mode.el
@@ -66,8 +66,8 @@ The hook `nix-mode-hook' is run when Nix mode is started.
 
 
 (defvar nix-keywords
-  '("\\<if\\>" "\\<then\\>" "\\<else\\>" "\\<assert\\>"
-    "\\<let\\>" "\\<rec\\>" "\\<inherit\\>"
+  '("\\<if\\>" "\\<then\\>" "\\<else\\>" "\\<assert\\>" "\\<with\\>"
+    "\\<let\\>" "\\<in\\>" "\\<rec\\>" "\\<inherit\\>"
     ("\\<true\\>" . font-lock-builtin-face)
     ("\\<false\\>" . font-lock-builtin-face)
     ("\\<null\\>" . font-lock-builtin-face)
diff --git a/src/libexpr/lexer.l b/src/libexpr/lexer.l
index 5db13a7169..df30a5ed07 100644
--- a/src/libexpr/lexer.l
+++ b/src/libexpr/lexer.l
@@ -91,6 +91,7 @@ else        { return ELSE; }
 assert      { return ASSERT; }
 with        { return WITH; }
 let         { return LET; }
+in          { return IN; }
 rec         { return REC; }
 inherit     { return INHERIT; }
 
diff --git a/src/libexpr/parser.y b/src/libexpr/parser.y
index e4b220e04f..f5c3435e5f 100644
--- a/src/libexpr/parser.y
+++ b/src/libexpr/parser.y
@@ -123,7 +123,7 @@ static void freeAndUnprotect(void * p)
 %type <t> expr_app expr_select expr_simple bind inheritsrc formal
 %type <ts> binds ids expr_list formals string_parts
 %token <t> ID INT STR PATH URI
-%token IF THEN ELSE ASSERT WITH LET REC INHERIT EQ NEQ AND OR IMPL
+%token IF THEN ELSE ASSERT WITH LET IN REC INHERIT EQ NEQ AND OR IMPL
 %token DOLLAR_CURLY /* == ${ */
 
 %nonassoc IMPL
@@ -152,6 +152,8 @@ expr_function
     { $$ = makeAssert($2, $4, CUR_POS); }
   | WITH expr ';' expr_function
     { $$ = makeWith($2, $4, CUR_POS); }
+  | LET binds IN expr_function
+    { $$ = makeSelect(fixAttrs(1, ATinsert($2, makeBind(toATerm("<let-body>"), $4, CUR_POS))), toATerm("<let-body>")); }
   | expr_if
   ;
 
diff --git a/tests/lang/eval-okay-new-let.exp b/tests/lang/eval-okay-new-let.exp
new file mode 100644
index 0000000000..6960cba1d1
--- /dev/null
+++ b/tests/lang/eval-okay-new-let.exp
@@ -0,0 +1 @@
+Str("xyzzyfoobar")
diff --git a/tests/lang/eval-okay-new-let.nix b/tests/lang/eval-okay-new-let.nix
new file mode 100644
index 0000000000..7381231415
--- /dev/null
+++ b/tests/lang/eval-okay-new-let.nix
@@ -0,0 +1,14 @@
+let
+
+  f = z: 
+
+    let
+      x = "foo";
+      y = "bar";
+      body = 1; # compat test
+    in
+      z + x + y;
+
+  arg = "xyzzy";
+
+in f arg