diff --git a/dist/handlebars.js b/dist/handlebars.js
index 87214df29..5bd69b5c8 100644
--- a/dist/handlebars.js
+++ b/dist/handlebars.js
@@ -554,84 +554,86 @@ lexer.performAction = function anonymous(yy,yy_,$avoiding_name_collisions,YY_STA
 
 var YYSTATE=YY_START
 switch($avoiding_name_collisions) {
-case 0:
+case 0: yy_.yytext = "\\"; return 14; 
+break;
+case 1:
                                    if(yy_.yytext.slice(-1) !== "\\") this.begin("mu");
                                    if(yy_.yytext.slice(-1) === "\\") yy_.yytext = yy_.yytext.substr(0,yy_.yyleng-1), this.begin("emu");
                                    if(yy_.yytext) return 14;
                                  
 break;
-case 1: return 14; 
+case 2: return 14; 
 break;
-case 2:
+case 3:
                                    if(yy_.yytext.slice(-1) !== "\\") this.popState();
                                    if(yy_.yytext.slice(-1) === "\\") yy_.yytext = yy_.yytext.substr(0,yy_.yyleng-1);
                                    return 14;
                                  
 break;
-case 3: yy_.yytext = yy_.yytext.substr(0, yy_.yyleng-4); this.popState(); return 15; 
-break;
-case 4: this.begin("par"); return 24; 
+case 4: yy_.yytext = yy_.yytext.substr(0, yy_.yyleng-4); this.popState(); return 15; 
 break;
-case 5: return 16; 
+case 5: this.begin("par"); return 24; 
 break;
-case 6: return 20; 
+case 6: return 16; 
 break;
-case 7: return 19; 
+case 7: return 20; 
 break;
 case 8: return 19; 
 break;
-case 9: return 23; 
+case 9: return 19; 
 break;
 case 10: return 23; 
 break;
-case 11: this.popState(); this.begin('com'); 
+case 11: return 23; 
 break;
-case 12: yy_.yytext = yy_.yytext.substr(3,yy_.yyleng-5); this.popState(); return 15; 
+case 12: this.popState(); this.begin('com'); 
 break;
-case 13: return 22; 
+case 13: yy_.yytext = yy_.yytext.substr(3,yy_.yyleng-5); this.popState(); return 15; 
 break;
-case 14: return 36; 
+case 14: return 22; 
 break;
-case 15: return 35; 
+case 15: return 36; 
 break;
 case 16: return 35; 
 break;
-case 17: return 39; 
+case 17: return 35; 
 break;
-case 18: /*ignore whitespace*/ 
+case 18: return 39; 
 break;
-case 19: this.popState(); return 18; 
+case 19: /*ignore whitespace*/ 
 break;
 case 20: this.popState(); return 18; 
 break;
-case 21: yy_.yytext = yy_.yytext.substr(1,yy_.yyleng-2).replace(/\\"/g,'"'); return 30; 
+case 21: this.popState(); return 18; 
 break;
-case 22: yy_.yytext = yy_.yytext.substr(1,yy_.yyleng-2).replace(/\\'/g,"'"); return 30; 
+case 22: yy_.yytext = yy_.yytext.substr(1,yy_.yyleng-2).replace(/\\"/g,'"'); return 30; 
 break;
-case 23: yy_.yytext = yy_.yytext.substr(1); return 28; 
+case 23: yy_.yytext = yy_.yytext.substr(1,yy_.yyleng-2).replace(/\\'/g,"'"); return 30; 
 break;
-case 24: return 32; 
+case 24: yy_.yytext = yy_.yytext.substr(1); return 28; 
 break;
 case 25: return 32; 
 break;
-case 26: return 31; 
+case 26: return 32; 
+break;
+case 27: return 31; 
 break;
-case 27: return 35; 
+case 28: return 35; 
 break;
-case 28: yy_.yytext = yy_.yytext.substr(1, yy_.yyleng-2); return 35; 
+case 29: yy_.yytext = yy_.yytext.substr(1, yy_.yyleng-2); return 35; 
 break;
-case 29: return 'INVALID'; 
+case 30: return 'INVALID'; 
 break;
-case 30: /*ignore whitespace*/ 
+case 31: /*ignore whitespace*/ 
 break;
-case 31: this.popState(); return 37; 
+case 32: this.popState(); return 37; 
 break;
-case 32: return 5; 
+case 33: return 5; 
 break;
 }
 };
-lexer.rules = [/^(?:[^\x00]*?(?=(\{\{)))/,/^(?:[^\x00]+)/,/^(?:[^\x00]{2,}?(?=(\{\{|$)))/,/^(?:[\s\S]*?--\}\})/,/^(?:\{\{>)/,/^(?:\{\{#)/,/^(?:\{\{\/)/,/^(?:\{\{\^)/,/^(?:\{\{\s*else\b)/,/^(?:\{\{\{)/,/^(?:\{\{&)/,/^(?:\{\{!--)/,/^(?:\{\{![\s\S]*?\}\})/,/^(?:\{\{)/,/^(?:=)/,/^(?:\.(?=[} ]))/,/^(?:\.\.)/,/^(?:[\/.])/,/^(?:\s+)/,/^(?:\}\}\})/,/^(?:\}\})/,/^(?:"(\\["]|[^"])*")/,/^(?:'(\\[']|[^'])*')/,/^(?:@[a-zA-Z]+)/,/^(?:true(?=[}\s]))/,/^(?:false(?=[}\s]))/,/^(?:-?[0-9]+(?=[}\s]))/,/^(?:[a-zA-Z0-9_$-]+(?=[=}\s\/.]))/,/^(?:\[[^\]]*\])/,/^(?:.)/,/^(?:\s+)/,/^(?:[a-zA-Z0-9_$-/]+)/,/^(?:$)/];
-lexer.conditions = {"mu":{"rules":[4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,32],"inclusive":false},"emu":{"rules":[2],"inclusive":false},"com":{"rules":[3],"inclusive":false},"par":{"rules":[30,31],"inclusive":false},"INITIAL":{"rules":[0,1,32],"inclusive":true}};
+lexer.rules = [/^(?:\\\\(?=(\{\{)))/,/^(?:[^\x00]*?(?=(\{\{)))/,/^(?:[^\x00]+)/,/^(?:[^\x00]{2,}?(?=(\{\{|$)))/,/^(?:[\s\S]*?--\}\})/,/^(?:\{\{>)/,/^(?:\{\{#)/,/^(?:\{\{\/)/,/^(?:\{\{\^)/,/^(?:\{\{\s*else\b)/,/^(?:\{\{\{)/,/^(?:\{\{&)/,/^(?:\{\{!--)/,/^(?:\{\{![\s\S]*?\}\})/,/^(?:\{\{)/,/^(?:=)/,/^(?:\.(?=[} ]))/,/^(?:\.\.)/,/^(?:[\/.])/,/^(?:\s+)/,/^(?:\}\}\})/,/^(?:\}\})/,/^(?:"(\\["]|[^"])*")/,/^(?:'(\\[']|[^'])*')/,/^(?:@[a-zA-Z]+)/,/^(?:true(?=[}\s]))/,/^(?:false(?=[}\s]))/,/^(?:-?[0-9]+(?=[}\s]))/,/^(?:[a-zA-Z0-9_$-]+(?=[=}\s\/.]))/,/^(?:\[[^\]]*\])/,/^(?:.)/,/^(?:\s+)/,/^(?:[a-zA-Z0-9_$-/]+)/,/^(?:$)/];
+lexer.conditions = {"mu":{"rules":[5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,33],"inclusive":false},"emu":{"rules":[3],"inclusive":false},"com":{"rules":[4],"inclusive":false},"par":{"rules":[31,32],"inclusive":false},"INITIAL":{"rules":[0,1,2,33],"inclusive":true}};
 return lexer;})()
 parser.lexer = lexer;
 function Parser () { this.yy = {}; }Parser.prototype = parser;parser.Parser = Parser;
diff --git a/spec/qunit_spec.js b/spec/qunit_spec.js
index f12e44cd4..3de93116a 100644
--- a/spec/qunit_spec.js
+++ b/spec/qunit_spec.js
@@ -92,6 +92,12 @@ test("most basic", function() {
   shouldCompileTo("{{foo}}", { foo: "foo" }, "foo");
 });
 
+test("escaping", function() {
+  shouldCompileTo("\\{{foo}}", { foo: "food" }, "{{foo}}");
+  shouldCompileTo("\\\\{{foo}}", { foo: "food" }, "\\food");
+  shouldCompileTo("\\\\ {{foo}}", { foo: "food" }, "\\\\ food");
+});
+
 test("compiling with a basic context", function() {
   shouldCompileTo("Goodbye\n{{cruel}}\n{{world}}!", {cruel: "cruel", world: "world"}, "Goodbye\ncruel\nworld!",
                   "It works if all the required keys are provided");
diff --git a/src/handlebars.l b/src/handlebars.l
index b32e39c64..cbf048d56 100644
--- a/src/handlebars.l
+++ b/src/handlebars.l
@@ -3,6 +3,7 @@
 
 %%
 
+"\\\\"/("{{")                    { yytext = "\\"; return 'CONTENT'; }
 [^\x00]*?/("{{")                 {
                                    if(yytext.slice(-1) !== "\\") this.begin("mu");
                                    if(yytext.slice(-1) === "\\") yytext = yytext.substr(0,yyleng-1), this.begin("emu");