diff --git a/lib/Parse/Lexer.cpp b/lib/Parse/Lexer.cpp
index d0f77000461aa..eb8cd35e4f38b 100644
--- a/lib/Parse/Lexer.cpp
+++ b/lib/Parse/Lexer.cpp
@@ -472,7 +472,7 @@ static bool isValidIdentifierContinuationCodePoint(uint32_t c) {
 static bool isValidIdentifierStartCodePoint(uint32_t c) {
   if (!isValidIdentifierContinuationCodePoint(c))
     return false;
-  if (c < 0x80 && isDigit(c))
+  if (c < 0x80 && (isDigit(c) || c == '$'))
     return false;
 
   // N1518: Recommendations for extended identifier characters for C and C++
@@ -1385,6 +1385,14 @@ void Lexer::lexEscapedIdentifier() {
     }
   }
 
+  // Special case; allow '`$`'.
+  if (Quote[1] == '$' && Quote[2] == '`') {
+    CurPtr = Quote + 3;
+    formToken(tok::identifier, Quote);
+    NextToken.setEscapedIdentifier(true);
+    return;
+  }
+
   // The backtick is punctuation.
   CurPtr = IdentifierStart;
   formToken(tok::backtick, Quote);
diff --git a/test/Parse/dollar_identifier.swift b/test/Parse/dollar_identifier.swift
index 73d2594402e3b..f72adb39b9b08 100644
--- a/test/Parse/dollar_identifier.swift
+++ b/test/Parse/dollar_identifier.swift
@@ -54,3 +54,10 @@ func escapedDollarFunc() {
   func `$`(`$`: Int) {} // no error
   `$`(`$`: 25) // no error
 }
+
+func escapedDollarAnd() {
+  // FIXME: Bad diagnostics.
+  `$0` = 1 // expected-error {{expected expression}}
+  `$$` = 2 // expected-error {{expected numeric value following '$'}}
+  `$abc` = 3 // expected-error {{expected numeric value following '$'}}
+}