diff --git a/docs/options.md b/docs/options.md
index ee4290a0..4d193a9b 100644
--- a/docs/options.md
+++ b/docs/options.md
@@ -74,3 +74,4 @@ The `dereference` options control how JSON Schema $Ref Parser will dereference `
 |Option(s)             |Type                |Description
 |:---------------------|:-------------------|:------------
 |`circular`|`boolean` or `"ignore"`|Determines whether [circular `$ref` pointers](README.md#circular-refs) are handled.<br><br>If set to `false`, then a `ReferenceError` will be thrown if the schema contains any circular references.<br><br> If set to `"ignore"`, then circular references will simply be ignored.  No error will be thrown, but the [`$Refs.circular`](refs.md#circular) property will still be set to `true`.
+|`id`|`boolean` or `"ignore"`|Determines whether [`$ref` pointers to id](https://json-schema.org/understanding-json-schema/structuring.html#using-id-with-ref) are handled.<br><br>If set to `true`, then the pointer will be dereferenced.<br><br>If set to `false`, then a `ReferenceError` will be thrown if the schema contains any references to ids.<br><br>If set to `"ignore"`, then references to id will simply be ignored. No error will be thrown.
diff --git a/lib/index.d.ts b/lib/index.d.ts
index e071da95..e9ef0127 100644
--- a/lib/index.d.ts
+++ b/lib/index.d.ts
@@ -221,6 +221,16 @@ declare namespace $RefParser {
        * If set to `"ignore"`, then circular references will simply be ignored. No error will be thrown, but the `$Refs.circular` property will still be set to `true`.
        */
       circular?: boolean | 'ignore'
+      /**
+       * Determines whether $ref pointers to id are handled.
+       *
+       * If set to `true`, then the pointer will be dereferenced.
+       *
+       * If set to `false`, then a `ReferenceError` will be thrown if the schema contains any references to ids.
+       *
+       * If set to `"ignore"`, then references to id will simply be ignored. No error will be thrown. (default)
+       */
+      id?: boolean | 'ignore'
     }
   }
 
diff --git a/lib/pointer.js b/lib/pointer.js
index 9f5baf17..11d86bd4 100644
--- a/lib/pointer.js
+++ b/lib/pointer.js
@@ -72,7 +72,27 @@ function Pointer ($ref, path, friendlyPath) {
  * of the resolved value.
  */
 Pointer.prototype.resolve = function (obj, options) {
-  let tokens = Pointer.parse(this.path);
+  let tokens = Pointer.parse(this.path, options);
+
+  // it's a reference to an id
+  if (typeof tokens === "string") {
+    this.path = tokens;
+
+    // Crawl the object, one token at a time
+    let def = Object.keys(obj.definitions || {}).find((key) => {
+      return obj.definitions[key].$id === tokens;
+    });
+
+    if (def === undefined) {
+      throw ono.syntax(`Error resolving $ref pointer "${this.originalPath}". \Id "${tokens}" does not exist.`);
+    }
+
+    this.value = obj.definitions[def];
+
+    // Resolve the final value
+    resolveIf$Ref(this, options);
+    return this;
+  }
 
   // Crawl the object, one token at a time
   this.value = obj;
@@ -150,9 +170,10 @@ Pointer.prototype.set = function (obj, value, options) {
  * {@link https://tools.ietf.org/html/rfc6901#section-3}
  *
  * @param {string} path
+ * @param {$RefParserOptions} options
  * @returns {string[]}
  */
-Pointer.parse = function (path) {
+Pointer.parse = function (path, options) {
   // Get the JSON pointer from the path's hash
   let pointer = url.getHash(path).substr(1);
 
@@ -171,7 +192,12 @@ Pointer.parse = function (path) {
   }
 
   if (pointer[0] !== "") {
-    throw ono.syntax(`Invalid $ref pointer "${pointer}". Pointers must begin with "#/"`);
+    if (options && options.dereference.id === true) {
+      return "#" + pointer[0];
+    }
+    else {
+      throw ono.syntax(`Invalid $ref pointer "${pointer}". Pointers must begin with "#/"`);
+    }
   }
 
   return pointer.slice(1);
diff --git a/lib/ref.js b/lib/ref.js
index 30c69f45..831c8738 100644
--- a/lib/ref.js
+++ b/lib/ref.js
@@ -133,7 +133,12 @@ $Ref.isAllowed$Ref = function (value, options) {
       // It's an external reference, which is allowed by the options
       return true;
     }
+    else if (value.$ref[0] === "#" && value.$ref.length > 1 && options && typeof options.dereference.id !== "undefined" && options.dereference.id !== "ignore") {
+      // It's a reference to an id, which is allowed by the options
+      return true;
+    }
   }
+  return false;
 };
 
 /**
diff --git a/test/specs/internal-with-id/bundled.js b/test/specs/internal-with-id/bundled.js
new file mode 100644
index 00000000..27a941e3
--- /dev/null
+++ b/test/specs/internal-with-id/bundled.js
@@ -0,0 +1,32 @@
+"use strict";
+
+module.exports = {
+  definitions: {
+    address: {
+      required: ["streetAddress", "city", "state"],
+      $id: "#address",
+      type: "object",
+      properties: {
+        streetAddress: {
+          type: "string"
+        },
+        city: {
+          type: "string"
+        },
+        state: {
+          type: "string"
+        }
+      }
+    }
+  },
+  type: "object",
+  properties: {
+    billingAddress: {
+      $ref: "#address"
+    },
+    shippingAddress: {
+      $ref: "#address"
+    }
+  },
+  title: "Customer"
+};
diff --git a/test/specs/internal-with-id/dereferenced.js b/test/specs/internal-with-id/dereferenced.js
new file mode 100644
index 00000000..96e724f0
--- /dev/null
+++ b/test/specs/internal-with-id/dereferenced.js
@@ -0,0 +1,58 @@
+"use strict";
+
+module.exports = {
+  definitions: {
+    address: {
+      required: ["streetAddress", "city", "state"],
+      $id: "#address",
+      type: "object",
+      properties: {
+        streetAddress: {
+          type: "string"
+        },
+        city: {
+          type: "string"
+        },
+        state: {
+          type: "string"
+        }
+      }
+    }
+  },
+  type: "object",
+  properties: {
+    billingAddress: {
+      $id: "#address",
+      required: ["streetAddress", "city", "state"],
+      type: "object",
+      properties: {
+        streetAddress: {
+          type: "string"
+        },
+        city: {
+          type: "string"
+        },
+        state: {
+          type: "string"
+        }
+      }
+    },
+    shippingAddress: {
+      $id: "#address",
+      required: ["streetAddress", "city", "state"],
+      type: "object",
+      properties: {
+        streetAddress: {
+          type: "string"
+        },
+        city: {
+          type: "string"
+        },
+        state: {
+          type: "string"
+        }
+      }
+    }
+  },
+  title: "Customer"
+};
diff --git a/test/specs/internal-with-id/internal-with-id.spec.js b/test/specs/internal-with-id/internal-with-id.spec.js
new file mode 100644
index 00000000..39c2461e
--- /dev/null
+++ b/test/specs/internal-with-id/internal-with-id.spec.js
@@ -0,0 +1,52 @@
+"use strict";
+
+const { expect } = require("chai");
+const $RefParser = require("../../..");
+const helper = require("../../utils/helper");
+const path = require("../../utils/path");
+const parsedSchema = require("./parsed");
+const dereferencedSchema = require("./dereferenced");
+const bundledSchema = require("./bundled");
+
+describe("Schema with internal $refs with id", () => {
+  it("should parse successfully", async () => {
+    let parser = new $RefParser();
+    const schema = await parser.parse(
+      path.rel("specs/internal-with-id/internal-with-id.yaml")
+    );
+    expect(schema).to.equal(parser.schema);
+    expect(schema).to.deep.equal(parsedSchema);
+    expect(parser.$refs.paths()).to.deep.equal([
+      path.abs("specs/internal-with-id/internal-with-id.yaml")
+    ]);
+  });
+
+  it(
+    "should resolve successfully",
+    helper.testResolve(
+      path.rel("specs/internal-with-id/internal-with-id.yaml"),
+      path.abs("specs/internal-with-id/internal-with-id.yaml"),
+      parsedSchema
+    )
+  );
+
+  it("should dereference successfully", async () => {
+    let parser = new $RefParser();
+    const schema = await parser.dereference(
+      path.rel("specs/internal-with-id/internal-with-id.yaml"), { dereference: { id: true }}
+    );
+    expect(schema).to.equal(parser.schema);
+    expect(schema).to.deep.equal(dereferencedSchema);
+    // The "circular" flag should NOT be set
+    expect(parser.$refs.circular).to.equal(false);
+  });
+
+  it("should bundle successfully", async () => {
+    let parser = new $RefParser();
+    const schema = await parser.bundle(
+      path.rel("specs/internal-with-id/internal-with-id.yaml")
+    );
+    expect(schema).to.equal(parser.schema);
+    expect(schema).to.deep.equal(bundledSchema);
+  });
+});
diff --git a/test/specs/internal-with-id/internal-with-id.yaml b/test/specs/internal-with-id/internal-with-id.yaml
new file mode 100644
index 00000000..9454b989
--- /dev/null
+++ b/test/specs/internal-with-id/internal-with-id.yaml
@@ -0,0 +1,22 @@
+title: Customer
+type: object
+definitions:
+  address:
+    $id: "#address"
+    type: object
+    properties:
+      streetAddress:
+        type: string
+      city:
+        type: string
+      state:
+        type: string
+    required:
+      - streetAddress
+      - city
+      - state
+properties:
+  billingAddress:
+    $ref: "#address"
+  shippingAddress:
+    $ref: "#address"
diff --git a/test/specs/internal-with-id/parsed.js b/test/specs/internal-with-id/parsed.js
new file mode 100644
index 00000000..27a941e3
--- /dev/null
+++ b/test/specs/internal-with-id/parsed.js
@@ -0,0 +1,32 @@
+"use strict";
+
+module.exports = {
+  definitions: {
+    address: {
+      required: ["streetAddress", "city", "state"],
+      $id: "#address",
+      type: "object",
+      properties: {
+        streetAddress: {
+          type: "string"
+        },
+        city: {
+          type: "string"
+        },
+        state: {
+          type: "string"
+        }
+      }
+    }
+  },
+  type: "object",
+  properties: {
+    billingAddress: {
+      $ref: "#address"
+    },
+    shippingAddress: {
+      $ref: "#address"
+    }
+  },
+  title: "Customer"
+};