diff --git a/crates/ruff_python_parser/src/snapshots/ruff_python_parser__string__tests__dont_panic_on_8_in_octal_escape.snap b/crates/ruff_python_parser/src/snapshots/ruff_python_parser__string__tests__dont_panic_on_8_in_octal_escape.snap
new file mode 100644
index 0000000000000..8b8c0a4e68b5f
--- /dev/null
+++ b/crates/ruff_python_parser/src/snapshots/ruff_python_parser__string__tests__dont_panic_on_8_in_octal_escape.snap
@@ -0,0 +1,28 @@
+---
+source: crates/ruff_python_parser/src/string.rs
+expression: parse_ast
+---
+[
+    Assign(
+        StmtAssign {
+            range: 0..16,
+            targets: [
+                Name(
+                    ExprName {
+                        range: 0..4,
+                        id: "bold",
+                        ctx: Store,
+                    },
+                ),
+            ],
+            value: StringLiteral(
+                ExprStringLiteral {
+                    range: 7..16,
+                    value: "\u{3}8[1m",
+                    unicode: false,
+                    implicit_concatenated: false,
+                },
+            ),
+        },
+    ),
+]
diff --git a/crates/ruff_python_parser/src/string.rs b/crates/ruff_python_parser/src/string.rs
index 64c0834e80321..ab9afff50a935 100644
--- a/crates/ruff_python_parser/src/string.rs
+++ b/crates/ruff_python_parser/src/string.rs
@@ -114,7 +114,7 @@ impl<'a> StringParser<'a> {
         let mut len = 1;
 
         while len < 3 {
-            let Some(b'0'..=b'8') = self.peek_byte() else {
+            let Some(b'0'..=b'7') = self.peek_byte() else {
                 break;
             };
 
@@ -885,6 +885,15 @@ mod tests {
         insta::assert_debug_snapshot!(parse_ast);
     }
 
+    /// https://github.com/astral-sh/ruff/issues/8355
+    #[test]
+    fn test_dont_panic_on_8_in_octal_escape() {
+        let source = r#"bold = '\038[1m'"#;
+        let parse_ast = parse_suite(source, "<test>").unwrap();
+
+        insta::assert_debug_snapshot!(parse_ast);
+    }
+
     macro_rules! test_aliases_parse {
         ($($name:ident: $alias:expr,)*) => {
         $(