diff --git a/src/lib/css-parse.html b/src/lib/css-parse.html
index 332857348e..eccd36f297 100644
--- a/src/lib/css-parse.html
+++ b/src/lib/css-parse.html
@@ -160,7 +160,7 @@
       customProp: /(?:^|[\s;])--[^;{]*?:[^{};]*?(?:[;\n]|$)/gim,
       mixinProp: /(?:^|[\s;])?--[^;{]*?:[^{;]*?{[^}]*?}(?:[;\n]|$)?/gim,
       mixinApply: /@apply[\s]*\([^)]*?\)[\s]*(?:[;\n]|$)?/gim,
-      varApply: /[^;:]*?:[^;]*var[^;]*(?:[;\n]|$)?/gim,
+      varApply: /[^;:\n]*?:[^;\n]*?var\([^;\n]*\)(?:[;\n]|$)?/gim,
       keyframesRule: /^@[^\s]*keyframes/,
     },
 
diff --git a/src/lib/style-transformer.html b/src/lib/style-transformer.html
index fe20570783..27afb0fdb3 100644
--- a/src/lib/style-transformer.html
+++ b/src/lib/style-transformer.html
@@ -19,7 +19,7 @@
 
     /* Transforms ShadowDOM styling into ShadyDOM styling
 
-     * scoping: 
+     * scoping:
 
         * elements in scope get scoping selector class="x-foo-scope"
         * selectors re-written as follows:
@@ -41,8 +41,8 @@
     */
     var api = {
 
-      // Given a node and scope name, add a scoping class to each node 
-      // in the tree. This facilitates transforming css into scoped rules. 
+      // Given a node and scope name, add a scoping class to each node
+      // in the tree. This facilitates transforming css into scoped rules.
       dom: function(node, scope, useAttr, shouldRemoveScope) {
         this._transformDom(node, scope || '', useAttr, shouldRemoveScope);
       },
@@ -86,7 +86,7 @@
                     .replace(scope, ''));
                 }
               } else {
-                element.setAttribute(CLASS, c + (c ? ' ' : '') + 
+                element.setAttribute(CLASS, c + (c ? ' ' : '') +
                   SCOPE_NAME + ' ' + scope);
               }
             }
@@ -153,7 +153,7 @@
         }
         // NOTE: save transformedSelector for subsequent matching of elements
         // agsinst selectors (e.g. when calculating style properties)
-        rule.selector = rule.transformedSelector = 
+        rule.selector = rule.transformedSelector =
           p$.join(COMPLEX_SELECTOR_SEP);
       },
 
@@ -167,16 +167,16 @@
             stop = stop || info.stop;
             hostContext = hostContext || info.hostContext;
             c = info.combinator;
-            s = info.value;  
+            s = info.value;
           } else {
             s = s.replace(SCOPE_JUMP, ' ');
           }
           return c + s;
         });
         if (hostContext) {
-          selector = selector.replace(HOST_CONTEXT_PAREN, 
+          selector = selector.replace(HOST_CONTEXT_PAREN,
             function(m, pre, paren, post) {
-              return pre + paren + ' ' + hostScope + post + 
+              return pre + paren + ' ' + hostScope + post +
                 COMPLEX_SELECTOR_SEP + ' ' + pre + hostScope + paren + post;
              });
         }
@@ -198,7 +198,7 @@
           selector = selector.replace(HOST, hostScope);
         // replace other selectors with scoping class
         } else if (jumpIndex !== 0) {
-          selector = scope ? this._transformSimpleSelector(selector, scope) : 
+          selector = scope ? this._transformSimpleSelector(selector, scope) :
             selector;
         }
         // remove left-side combinator when dealing with ::content.
@@ -212,7 +212,7 @@
           selector = selector.replace(SCOPE_JUMP, ' ');
           stop = true;
         }
-        return {value: selector, combinator: combinator, stop: stop, 
+        return {value: selector, combinator: combinator, stop: stop,
           hostContext: hostContext};
       },
 
@@ -247,13 +247,13 @@
     };
 
     var SCOPE_NAME = api.SCOPE_NAME;
-    var SCOPE_DOC_SELECTOR = ':not([' + SCOPE_NAME + '])' + 
+    var SCOPE_DOC_SELECTOR = ':not([' + SCOPE_NAME + '])' +
       ':not(.' + SCOPE_NAME + ')';
     var COMPLEX_SELECTOR_SEP = ',';
     var SIMPLE_SELECTOR_SEP = /(^|[\s>+~]+)([^\s>+~]+)/g;
     var HOST = ':host';
     var ROOT = ':root';
-    // NOTE: this supports 1 nested () pair for things like 
+    // NOTE: this supports 1 nested () pair for things like
     // :host(:not([selected]), more general support requires
     // parsing which seems like overkill
     var HOST_PAREN = /(\:host)(?:\(((?:\([^)(]*\)|[^)(]*)+?)\))/g;
diff --git a/src/lib/style-util.html b/src/lib/style-util.html
index cc5c47a99c..e14463aa20 100644
--- a/src/lib/style-util.html
+++ b/src/lib/style-util.html
@@ -22,7 +22,7 @@
       toCssText: function(rules, callback, preserveProperties) {
         if (typeof rules === 'string') {
           rules = this.parser.parse(rules);
-        } 
+        }
         if (callback) {
           this.forEachStyleRule(rules, callback);
         }
@@ -56,7 +56,7 @@
         var skipRules = false;
         if (node.type === this.ruleTypes.STYLE_RULE) {
           callback(node);
-        } else if (node.type === this.ruleTypes.KEYFRAMES_RULE || 
+        } else if (node.type === this.ruleTypes.KEYFRAMES_RULE ||
             node.type === this.ruleTypes.MIXIN_RULE) {
           skipRules = true;
         }
@@ -79,8 +79,8 @@
         if (!afterNode) {
           var n$ = target.querySelectorAll('style[scope]');
           afterNode = n$[n$.length-1];
-        } 
-        target.insertBefore(style, 
+        }
+        target.insertBefore(style,
           (afterNode && afterNode.nextSibling) || target.firstChild);
         return style;
       },
@@ -142,7 +142,7 @@
         }
         return cssText;
       },
-      
+
       resolveCss: Polymer.ResolveUrl.resolveCss,
       parser: Polymer.CssParse,
       ruleTypes: Polymer.CssParse.types
@@ -151,4 +151,4 @@
 
   })();
 
-</script>
\ No newline at end of file
+</script>
diff --git a/test/unit/custom-style.html b/test/unit/custom-style.html
index 98b3eb7140..ad22022480 100644
--- a/test/unit/custom-style.html
+++ b/test/unit/custom-style.html
@@ -84,8 +84,6 @@
     body /deep/ * {
       --deeep: 6px solid orange;
     }
-
-
   </style>
   <style is="custom-style">
     .bag {
@@ -138,6 +136,8 @@
 
   <x-blue-bold-text></x-blue-bold-text>
 
+  <parent-variable-with-var></parent-variable-with-var>
+
   <br><br>
   <div id="after"></div>
 
@@ -212,10 +212,59 @@
     </template>
   </dom-module>
 
+  <dom-module id="parent-variable-with-var">
+    <template>
+      <style>
+        child-variable-with-var {
+          --variable-property-own-line: 1px;
+          --variable-property-preceded-property: 2px;
+          --variable-property-before-property: yellow;
+          --variable-property-after-property: 3px;
+          --variable-property-after-assignment: 4px black solid;
+          --variable-property-before-assignment: 5px;
+        }
+      </style>
+      <child-variable-with-var id="child"></child-variable-with-var>
+    </template>
+  </dom-module>
+
+  <dom-module id="child-variable-with-var">
+    <template>
+      <style>
+        child-of-child-with-var {
+          --variable-own-line: 'Varela font';
+          margin-top: var(--variable-property-own-line);
+          margin-bottom: var(--variable-property-preceded-property);
+          --variable-between-properties: 6px;
+          background-color: var(--variable-property-before-property); padding-top: var(--variable-property-after-property);
+          --variable-assignment-before-property: 7px; border: var(--variable-property-after-assignment);
+          padding-left: var(--variable-property-before-assignment);--variable-assignment-after-property: 8px
+        }
+      </style>
+      <child-of-child-with-var id="child"></child-of-child-with-var>
+    </template>
+  </dom-module>
+
+  <dom-module id="child-of-child-with-var">
+    <template>
+      <style>
+        :host {
+          font-family: var(--variable-own-line);
+          padding-right: var(--variable-between-properties);
+          margin-left: var(--variable-assignment-before-property);
+          margin-right: var(--variable-assignment-after-property);
+        }
+      </style>
+      Text
+    </template>
+  </dom-module>
+
   <script>
 
     suite('custom-style', function() {
 
+      var xBar, xFoo;
+
       suiteSetup(function() {
 
         Polymer({
@@ -385,6 +434,31 @@
         document.body.removeChild(d);
       });
 
+      test('variable name with assignment including var correctly applied', function() {
+        Polymer({
+          is: 'parent-variable-with-var'
+        });
+        Polymer({
+          is: 'child-variable-with-var'
+        });
+        Polymer({
+          is: 'child-of-child-with-var'
+        });
+
+        var d = document.querySelector('parent-variable-with-var');
+        var el = d.$.child.$.child;
+        assertComputed(el, '1px', 'margin-top');
+        assertComputed(el, '2px', 'margin-bottom');
+        assertComputed(el, '3px', 'padding-top');
+        assertComputed(el, '4px solid rgb(0, 0, 0)', 'border');
+        assertComputed(el, '5px', 'padding-left');
+        assertComputed(el, '6px', 'padding-right');
+        assertComputed(el, '7px', 'margin-left');
+        assertComputed(el, '8px', 'margin-right');
+        assertComputed(el, 'rgb(255, 255, 0)', 'background-color');
+        assertComputed(el, '\'Varela font\'', 'font-family');
+      });
+
     });