diff --git a/Cargo.lock b/Cargo.lock
index 53ab1f8130e..8e304e3c92c 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -2497,6 +2497,50 @@ dependencies = [
  "serde_derive",
 ]
 
+[[package]]
+name = "phf"
+version = "0.10.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "fabbf1ead8a5bcbc20f5f8b939ee3f5b0f6f281b6ad3468b84656b658b455259"
+dependencies = [
+ "phf_macros",
+ "phf_shared",
+ "proc-macro-hack",
+]
+
+[[package]]
+name = "phf_generator"
+version = "0.10.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "5d5285893bb5eb82e6aaf5d59ee909a06a16737a8970984dd7746ba9283498d6"
+dependencies = [
+ "phf_shared",
+ "rand 0.8.5",
+]
+
+[[package]]
+name = "phf_macros"
+version = "0.10.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "58fdf3184dd560f160dd73922bea2d5cd6e8f064bf4b13110abd81b03697b4e0"
+dependencies = [
+ "phf_generator",
+ "phf_shared",
+ "proc-macro-hack",
+ "proc-macro2",
+ "quote",
+ "syn",
+]
+
+[[package]]
+name = "phf_shared"
+version = "0.10.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "b6796ad771acdc0123d2a88dc428b5e38ef24456743ddb1744ed628f9815c096"
+dependencies = [
+ "siphasher",
+]
+
 [[package]]
 name = "pin-project"
 version = "1.0.10"
@@ -3395,6 +3439,12 @@ dependencies = [
  "event-listener",
 ]
 
+[[package]]
+name = "siphasher"
+version = "0.3.10"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "7bd3e3206899af3f8b12af284fafc038cc1dc2b41d1b89dd17297221c5d225de"
+
 [[package]]
 name = "sized-chunks"
 version = "0.6.5"
@@ -3681,6 +3731,7 @@ dependencies = [
  "extension-trait",
  "num-bigint",
  "num-traits",
+ "phf",
  "sway-types",
  "thiserror",
  "unicode-xid",
diff --git a/sway-core/src/semantic_analysis/ast_node/declaration/variable.rs b/sway-core/src/semantic_analysis/ast_node/declaration/variable.rs
index 43017159b81..07ca16e9ab5 100644
--- a/sway-core/src/semantic_analysis/ast_node/declaration/variable.rs
+++ b/sway-core/src/semantic_analysis/ast_node/declaration/variable.rs
@@ -82,7 +82,7 @@ pub fn check_if_name_is_invalid(name: &Ident) -> CompileResult<()> {
     INVALID_NAMES
         .iter()
         .find_map(|x| {
-            if *x == name.as_str() {
+            if !name.is_raw_ident() && *x == name.as_str() {
                 Some(err(
                     vec![],
                     [CompileError::InvalidVariableName { name: name.clone() }].to_vec(),
diff --git a/sway-lib-std/src/lib.sw b/sway-lib-std/src/lib.sw
index e3b9be440d2..2f9e59b46a6 100644
--- a/sway-lib-std/src/lib.sw
+++ b/sway-lib-std/src/lib.sw
@@ -12,7 +12,7 @@ dep constants;
 dep contract_id;
 dep context;
 dep hash;
-dep storage;
+dep r#storage;
 dep b512;
 dep address;
 dep identity;
diff --git a/sway-lib-std/src/storage.sw b/sway-lib-std/src/storage.sw
index b7cca103729..f48b71534c3 100644
--- a/sway-lib-std/src/storage.sw
+++ b/sway-lib-std/src/storage.sw
@@ -1,4 +1,4 @@
-library storage;
+library r#storage;
 
 use ::hash::sha256;
 use ::context::registers::stack_ptr;
diff --git a/sway-parse/Cargo.toml b/sway-parse/Cargo.toml
index 0c867c4489a..05712406532 100644
--- a/sway-parse/Cargo.toml
+++ b/sway-parse/Cargo.toml
@@ -15,4 +15,4 @@ num-traits = "0.2.14"
 sway-types = { version = "0.16.1", path = "../sway-types" }
 thiserror = "1.0"
 unicode-xid = "0.2.2"
-
+ phf = { version = "0.10.1", features = ["macros"] }
diff --git a/sway-parse/src/attribute.rs b/sway-parse/src/attribute.rs
index d3851ece214..851e911cede 100644
--- a/sway-parse/src/attribute.rs
+++ b/sway-parse/src/attribute.rs
@@ -71,7 +71,12 @@ impl Spanned for Attribute {
 
 impl Parse for Attribute {
     fn parse(parser: &mut Parser) -> ParseResult<Self> {
-        let name = parser.parse()?;
+        let storage = parser.take::<StorageToken>();
+        let name = if let Some(storage) = storage {
+            Ident::from(storage)
+        } else {
+            parser.parse()?
+        };
         let args = Parens::try_parse(parser)?;
         Ok(Attribute { name, args })
     }
diff --git a/sway-parse/src/error.rs b/sway-parse/src/error.rs
index ac22b27ec87..07cf0d0d5f0 100644
--- a/sway-parse/src/error.rs
+++ b/sway-parse/src/error.rs
@@ -66,6 +66,8 @@ pub enum ParseErrorKind {
     InvalidDoubleUnderscore,
     #[error("Unexpected rest token, must be at the end of pattern.")]
     UnexpectedRestPattern,
+    #[error("Identifiers cannot be a reserved keyword.")]
+    ReservedKeywordIdentifier,
 }
 
 #[derive(Debug, Error, Clone, PartialEq, Hash)]
diff --git a/sway-parse/src/expr/mod.rs b/sway-parse/src/expr/mod.rs
index 67b322c418d..38864df33bd 100644
--- a/sway-parse/src/expr/mod.rs
+++ b/sway-parse/src/expr/mod.rs
@@ -1056,14 +1056,14 @@ fn parse_atom(parser: &mut Parser, ctx: ParseExprCtx) -> ParseResult<Expr> {
         );
     }
     if parser.peek::<TrueToken>().is_some() {
-        let ident = parser.parse::<Ident>()?;
+        let ident = parser.parse::<TrueToken>()?;
         return Ok(Expr::Literal(Literal::Bool(LitBool {
             span: ident.span(),
             kind: LitBoolType::True,
         })));
     }
     if parser.peek::<FalseToken>().is_some() {
-        let ident = parser.parse::<Ident>()?;
+        let ident = parser.parse::<FalseToken>()?;
         return Ok(Expr::Literal(Literal::Bool(LitBool {
             span: ident.span(),
             kind: LitBoolType::False,
diff --git a/sway-parse/src/keywords.rs b/sway-parse/src/keywords.rs
index a1572358dce..9cafb2fba1d 100644
--- a/sway-parse/src/keywords.rs
+++ b/sway-parse/src/keywords.rs
@@ -13,6 +13,18 @@ macro_rules! define_keyword (
             }
         }
 
+        impl $ty_name {
+            pub fn ident(&self) -> Ident {
+                Ident::new(self.span())
+            }
+        }
+
+        impl From<$ty_name> for Ident {
+            fn from(o: $ty_name) -> Ident {
+                o.ident()
+            }
+        }
+
         impl Peek for $ty_name {
             fn peek(peeker: Peeker<'_>) -> Option<$ty_name> {
                 let ident = peeker.peek_ident().ok()?;
@@ -119,6 +131,42 @@ macro_rules! define_token (
     };
 );
 
+// Keep this in sync with the list above defined by define_keyword!
+pub(crate) const RESERVED_KEYWORDS: phf::Set<&'static str> = phf::phf_set! {
+    "script",
+    "contract",
+    "predicate",
+    "library",
+    "dep",
+    "pub",
+    "use",
+    "as",
+    "struct",
+    "enum",
+    "self",
+    "fn",
+    "trait",
+    "impl",
+    "for",
+    "abi",
+    "const",
+    "storage",
+    "str",
+    "asm",
+    "return",
+    "if",
+    "else",
+    "match",
+    "mut",
+    "let",
+    "while",
+    "where",
+    "ref",
+    "deref",
+    "true",
+    "false",
+};
+
 define_token!(SemicolonToken, "a semicolon", [Semicolon], []);
 define_token!(
     ForwardSlashToken,
diff --git a/sway-parse/src/parse.rs b/sway-parse/src/parse.rs
index d91023aeb9a..c3aaa5c4bb6 100644
--- a/sway-parse/src/parse.rs
+++ b/sway-parse/src/parse.rs
@@ -97,6 +97,13 @@ impl Parse for Ident {
                     ));
                 }
 
+                if !ident.is_raw_ident() && RESERVED_KEYWORDS.contains(ident_str) {
+                    return Err(parser.emit_error_with_span(
+                        ParseErrorKind::ReservedKeywordIdentifier,
+                        ident.span(),
+                    ));
+                }
+
                 Ok(ident)
             }
             None => Err(parser.emit_error(ParseErrorKind::ExpectedIdent)),
diff --git a/sway-parse/src/path.rs b/sway-parse/src/path.rs
index 60e73d809c1..1dbc2b9e51e 100644
--- a/sway-parse/src/path.rs
+++ b/sway-parse/src/path.rs
@@ -90,10 +90,20 @@ impl Parse for PathExpr {
     }
 }
 
+fn parse_ident(parser: &mut Parser) -> ParseResult<Ident> {
+    if parser.peek::<SelfToken>().is_some() {
+        let token = parser.parse::<SelfToken>()?;
+        let ident: Ident = Ident::from(token);
+        Ok(ident)
+    } else {
+        parser.parse::<Ident>()
+    }
+}
+
 impl Parse for PathExprSegment {
     fn parse(parser: &mut Parser) -> ParseResult<PathExprSegment> {
         let fully_qualified = parser.take();
-        let name = parser.parse()?;
+        let name = parse_ident(parser)?;
         let generics_opt = if parser
             .peek2::<DoubleColonToken, OpenAngleBracketToken>()
             .is_some()
@@ -198,7 +208,7 @@ impl Parse for PathType {
 impl Parse for PathTypeSegment {
     fn parse(parser: &mut Parser) -> ParseResult<PathTypeSegment> {
         let fully_qualified = parser.take();
-        let name = parser.parse()?;
+        let name = parse_ident(parser)?;
         let generics_opt = if parser.peek::<OpenAngleBracketToken>().is_some() {
             let generics = parser.parse()?;
             Some((None, generics))
diff --git a/sway-parse/src/token.rs b/sway-parse/src/token.rs
index 3c036f4aa29..964a8e7cc87 100644
--- a/sway-parse/src/token.rs
+++ b/sway-parse/src/token.rs
@@ -284,7 +284,7 @@ pub fn lex(
     .peekable();
     let mut parent_token_trees = Vec::new();
     let mut token_trees = Vec::new();
-    while let Some((index, character)) = char_indices.next() {
+    while let Some((mut index, mut character)) = char_indices.next() {
         if character.is_whitespace() {
             continue;
         }
@@ -395,6 +395,16 @@ pub fn lex(
             continue;
         }
         if character.is_xid_start() || character == '_' {
+            let is_raw_ident = character == 'r' && matches!(char_indices.peek(), Some((_, '#')));
+            if is_raw_ident {
+                char_indices.next();
+                if let Some((_, next_character)) = char_indices.peek() {
+                    character = *next_character;
+                    if let Some((next_index, _)) = char_indices.next() {
+                        index = next_index;
+                    }
+                }
+            }
             let is_single_underscore = character == '_'
                 && match char_indices.peek() {
                     Some((_, next_character)) => !next_character.is_xid_continue(),
@@ -408,7 +418,7 @@ pub fn lex(
                     let _ = char_indices.next();
                 }
                 let span = span_until(src, index, &mut char_indices, &path);
-                let ident = Ident::new(span);
+                let ident = Ident::new_with_raw(span, is_raw_ident);
                 token_trees.push(TokenTree::Ident(ident));
                 continue;
             }
diff --git a/sway-types/src/ident.rs b/sway-types/src/ident.rs
index fda2a7c466e..c0382ab21ac 100644
--- a/sway-types/src/ident.rs
+++ b/sway-types/src/ident.rs
@@ -11,6 +11,7 @@ use std::{
 pub struct Ident {
     name_override_opt: Option<&'static str>,
     span: Span,
+    is_raw_ident: bool,
 }
 
 // custom implementation of Hash so that namespacing isn't reliant on the span itself, which will
@@ -61,11 +62,25 @@ impl Ident {
         }
     }
 
+    pub fn is_raw_ident(&self) -> bool {
+        self.is_raw_ident
+    }
+
     pub fn new(span: Span) -> Ident {
         let span = span.trim();
         Ident {
             name_override_opt: None,
             span,
+            is_raw_ident: false,
+        }
+    }
+
+    pub fn new_with_raw(span: Span, is_raw_ident: bool) -> Ident {
+        let span = span.trim();
+        Ident {
+            name_override_opt: None,
+            span,
+            is_raw_ident,
         }
     }
 
@@ -73,6 +88,7 @@ impl Ident {
         Ident {
             name_override_opt: Some(name_override),
             span,
+            is_raw_ident: false,
         }
     }
 
@@ -80,6 +96,7 @@ impl Ident {
         Ident {
             name_override_opt: Some(name),
             span: Span::dummy(),
+            is_raw_ident: false,
         }
     }
 }
diff --git a/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/Forc.lock b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/Forc.lock
new file mode 100644
index 00000000000..d85ecc65184
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/Forc.lock
@@ -0,0 +1,4 @@
+[[package]]
+name = 'reserved_identifiers'
+source = 'root'
+dependencies = []
diff --git a/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/Forc.toml b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/Forc.toml
new file mode 100644
index 00000000000..a5c653793d8
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/Forc.toml
@@ -0,0 +1,6 @@
+[project]
+authors = ["Fuel Labs <contact@fuel.sh>"]
+license = "Apache-2.0"
+name = "reserved_identifiers"
+entry = "main.sw"
+implicit-std = false
diff --git a/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/src/main.sw b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/src/main.sw
new file mode 100644
index 00000000000..00f81f2f5a9
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/src/main.sw
@@ -0,0 +1,39 @@
+script;
+
+// this should fail with an `Identifiers cannot be a reserved keyword.` error
+
+fn main() {
+    let mut script = 0;
+    let mut contract = 0;
+    let mut predicate = 0;
+    let mut library = 0;
+    let mut dep = 0;
+    let mut pub = 0;
+    let mut use = 0;
+    let mut as = 0;
+    let mut struct = 0;
+    let mut enum = 0;
+    let mut self = 0;
+    let mut fn = 0;
+    let mut trait = 0;
+    let mut impl = 0;
+    let mut for = 0;
+    let mut abi = 0;
+    let mut const = 0;
+    let mut storage = 0;
+    let mut str = 0;
+    let mut asm = 0;
+    let mut return = 0;
+    let mut if = 0;
+    let mut else = 0;
+    let mut match = 0;
+    let mut mut = 0;
+    let mut let = 0;
+    let mut while = 0;
+    let mut where = 0;
+    let mut ref = 0;
+    let mut deref = 0;
+    let mut true = 0;
+    let mut false = 0;
+}
+
diff --git a/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/test.toml b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/test.toml
new file mode 100644
index 00000000000..eb3634e032c
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_fail/reserved_identifiers/test.toml
@@ -0,0 +1 @@
+category = "fail"
diff --git a/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/Forc.lock b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/Forc.lock
new file mode 100644
index 00000000000..71928112b44
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/Forc.lock
@@ -0,0 +1,9 @@
+[[package]]
+name = 'core'
+source = 'path+from-root-D97961F846794409'
+dependencies = []
+
+[[package]]
+name = 'simple'
+source = 'root'
+dependencies = ['core']
diff --git a/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/Forc.toml b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/Forc.toml
new file mode 100644
index 00000000000..fada1e39e43
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/Forc.toml
@@ -0,0 +1,8 @@
+[project]
+authors = ["Fuel Labs <contact@fuel.sh>"]
+license = "Apache-2.0"
+name = "simple"
+entry = "main.sw"
+
+[dependencies]
+core = { path = "../../../../../../../sway-lib-core" }
diff --git a/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/json_abi_oracle.json b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/json_abi_oracle.json
new file mode 100644
index 00000000000..905c3bd1034
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/json_abi_oracle.json
@@ -0,0 +1,14 @@
+[
+  {
+    "inputs": [],
+    "name": "main",
+    "outputs": [
+      {
+        "components": null,
+        "name": "",
+        "type": "u64"
+      }
+    ],
+    "type": "function"
+  }
+]
\ No newline at end of file
diff --git a/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/src/main.sw b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/src/main.sw
new file mode 100644
index 00000000000..d14ad95ede4
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/src/main.sw
@@ -0,0 +1,38 @@
+script;
+
+fn main() -> u64 {
+    let mut r#script = 0;
+    let mut r#contract = 0;
+    let mut r#predicate = 0;
+    let mut r#library = 0;
+    let mut r#dep = 0;
+    let mut r#pub = 0;
+    let mut r#use = 0;
+    let mut r#as = 0;
+    let mut r#struct = 0;
+    let mut r#enum = 0;
+    let mut r#self = 0;
+    let mut r#fn = 0;
+    let mut r#trait = 0;
+    let mut r#impl = 0;
+    let mut r#for = 0;
+    let mut r#abi = 0;
+    let mut r#const = 0;
+    let mut r#storage = 0;
+    let mut r#str = 0;
+    let mut r#asm = 0;
+    let mut r#return = 0;
+    let mut r#if = 0;
+    let mut r#else = 0;
+    let mut r#match = 0;
+    let mut r#mut = 0;
+    let mut r#let = 0;
+    let mut r#while = 0;
+    let mut r#where = 0;
+    let mut r#ref = 0;
+    let mut r#deref = 0;
+    let mut r#true = 0;
+    let mut r#false = 0;
+
+    0
+}
diff --git a/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/test.toml b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/test.toml
new file mode 100644
index 00000000000..44ca8ea93c4
--- /dev/null
+++ b/test/src/e2e_vm_tests/test_programs/should_pass/language/raw_identifiers/test.toml
@@ -0,0 +1,3 @@
+category = "run"
+expected_result = { action = "return", value = 0 }
+validate_abi = true