diff --git a/client/src/BitBakeDocumentSemanticTokensProvider.ts b/client/src/BitBakeDocumentSemanticTokensProvider.ts
new file mode 100644
index 00000000..90f73414
--- /dev/null
+++ b/client/src/BitBakeDocumentSemanticTokensProvider.ts
@@ -0,0 +1,169 @@
+import { SemanticTokensLegend, SemanticTokensBuilder } from 'vscode'
+import type { TextDocument, CancellationToken, SemanticTokens, DocumentSemanticTokensProvider } from 'vscode'
+
+const tokenTypes = new Map<string, number>()
+const tokenModifiers = new Map<string, number>()
+
+interface IParsedToken {
+  line: number
+  startCharacter: number
+  length: number
+  tokenType: string
+  tokenModifiers: string[]
+}
+
+const generateSemanticTokensLegend = (): SemanticTokensLegend => {
+  const tokenTypesLegend = [
+    'function', 'variable'
+  ]
+  tokenTypesLegend.forEach((tokenType, index) => tokenTypes.set(tokenType, index))
+
+  const tokenModifiersLegend = [
+    'declaration'
+  ]
+  tokenModifiersLegend.forEach((tokenModifier, index) => tokenModifiers.set(tokenModifier, index))
+
+  return new SemanticTokensLegend(tokenTypesLegend, tokenModifiersLegend)
+}
+
+export const legend = generateSemanticTokensLegend()
+
+export class BitBakeDocumentSemanticTokensProvider implements DocumentSemanticTokensProvider {
+  async provideDocumentSemanticTokens (document: TextDocument, token: CancellationToken): Promise<SemanticTokens> {
+    const allTokens = this._parseText(document.getText())
+    const builder = new SemanticTokensBuilder(legend)
+    allTokens.forEach((token) => {
+      builder.push(token.line, token.startCharacter, token.length, this._encodeTokenType(token.tokenType), this._encodeTokenModifiers(token.tokenModifiers))
+    })
+    return builder.build()
+  }
+
+  // Check node_modules/@types/vscode/index.d.ts for more encoding details
+  private _encodeTokenType (tokenType: string): number {
+    if (tokenTypes.has(tokenType)) {
+      return Number(tokenTypes.get(tokenType))
+    } else if (tokenType === 'notInLegend') {
+      return tokenTypes.size + 2
+    }
+    return 0
+  }
+
+  private _encodeTokenModifiers (strTokenModifiers: string[]): number {
+    let result = 0
+    for (let i = 0; i < strTokenModifiers.length; i++) {
+      const tokenModifier = strTokenModifiers[i]
+      if (tokenModifiers.has(tokenModifier)) {
+        result = result | (1 << Number(tokenModifiers.get(tokenModifier)))
+      } else if (tokenModifier === 'notInLegend') {
+        result = result | (1 << tokenModifiers.size + 2)
+      }
+    }
+    return result
+  }
+
+  private _parseText (text: string): IParsedToken[] {
+    /**
+     * This function traverse the document twice. In the first traverse, the function and variable declarations will be matched and stored in an array which will be used to construct another array of regex for the second traverse. In the second traverse, the array of regex is used to match the function and variable references.
+     */
+
+    const resultTokens: IParsedToken[] = []
+    const lines = text.split(/\r\n|\r|\n/)
+    let declaredFunctions: string[] = []
+    let declaredVariables: string[] = []
+
+    const functionStartsWithDefRegex = /(?<!(#.*)|'.*|".*)(?<=def\s+)(?<name>[a-zA-Z_][\w_]*)(?<operator>:(append|prepend|remove))?(?=\s*\()/
+    const functionStartsWithPythonRegex = /(?<!(#.*)|'.*|".*)(?<=python\s+)(?<name>[a-zA-Z_][\w_]*)(?<operator>:(append|prepend|remove))?(?=\s*\()/
+    const shellFunctionsRegex = /(?<!(#.*)|'.*|".*)(?<name>[a-zA-Z_][\w_]*)(?<operator>:(append|prepend|remove))?(?=\s*\(.*\)\s*\{)/
+    const anonymousFunctionsRegex = /(\bpython)(?=\s*\(.*\)\s*\{)/
+    const variableDeclarationRegex = /(?<name>[a-zA-Z_][\w_]*)(?<operator>:(append|prepend|remove))?(?=\s*=\s*)(?!\s*\()/
+
+    // First traverse: Match functions and variables declarations
+    for (let i = 0; i < lines.length; i++) {
+      const line = lines[i]
+
+      const matchFunctionStartsWithDef = functionStartsWithDefRegex.exec(line)
+      const matchFunctionStartsWithPython = functionStartsWithPythonRegex.exec(line)
+      const matchShellFunction = shellFunctionsRegex.exec(line)
+      const matchVariableDeclaration = variableDeclarationRegex.exec(line)
+      const matchAnonymousFunction = anonymousFunctionsRegex.exec(line)
+
+      if (matchAnonymousFunction !== null) {
+        // Avoid mistakening anonymous functions as shell function declaration
+        continue
+      }
+      if (matchFunctionStartsWithDef?.groups?.name.length !== undefined) {
+        resultTokens.push({
+          line: i,
+          startCharacter: matchFunctionStartsWithDef.index,
+          length: matchFunctionStartsWithDef?.groups?.name.length,
+          tokenType: 'function',
+          tokenModifiers: ['declaration']
+        })
+        declaredFunctions.push(matchFunctionStartsWithDef?.groups?.name)
+      } else if (matchFunctionStartsWithPython?.groups?.name.length !== undefined) {
+        resultTokens.push({
+          line: i,
+          startCharacter: matchFunctionStartsWithPython.index,
+          length: matchFunctionStartsWithPython?.groups?.name.length,
+          tokenType: 'function',
+          tokenModifiers: ['declaration']
+        })
+
+        declaredFunctions.push(matchFunctionStartsWithPython?.groups?.name)
+      } else if (matchShellFunction?.groups?.name.length !== undefined) {
+        resultTokens.push({
+          line: i,
+          startCharacter: matchShellFunction.index,
+          length: matchShellFunction.groups?.name.length,
+          tokenType: 'function',
+          tokenModifiers: ['declaration']
+        })
+
+        declaredFunctions.push(matchShellFunction.groups?.name)
+      } else if (matchVariableDeclaration?.groups?.name.length !== undefined) {
+        resultTokens.push({
+          line: i,
+          startCharacter: matchVariableDeclaration.index,
+          length: matchVariableDeclaration.groups?.name.length,
+          tokenType: 'variable',
+          tokenModifiers: ['declaration']
+        })
+
+        declaredVariables.push(matchVariableDeclaration.groups?.name)
+      }
+    }
+    // Remove duplicates
+    declaredFunctions = [...new Set(declaredFunctions)]
+    declaredVariables = [...new Set(declaredVariables)]
+    // Sort the regex from longest to shortest for precise matching
+    declaredFunctions.sort((prev, next) => next.length - prev.length)
+    declaredVariables.sort((prev, next) => next.length - prev.length)
+
+    const declaredObjectsRegex: Array<{ regex: RegExp, type: string }> = []
+
+    declaredFunctions.forEach(declaredFunction => {
+      declaredObjectsRegex.push({ regex: new RegExp(`(?<!(#.*)|'.*|".*)(?<!python|def\\s+)${declaredFunction}\\b`, 'g'), type: 'function' })
+    })
+    declaredVariables.forEach(declaredVariable => {
+      declaredObjectsRegex.push({ regex: new RegExp(`(?<!(#.*)|'.*|".*)\\b${declaredVariable}\\b(?!\\s*=\\s*)`, 'g'), type: 'variable' })
+    })
+    // Second traverse: Match functions and variables references
+    for (let i = 0; i < lines.length; i++) {
+      const line = lines[i]
+
+      for (let j = 0; j < declaredObjectsRegex.length; ++j) {
+        const match = declaredObjectsRegex[j].regex.exec(line)
+        if (match !== null) {
+          resultTokens.push({
+            line: i,
+            startCharacter: match.index,
+            length: match[0].length,
+            tokenType: declaredObjectsRegex[j].type,
+            tokenModifiers: []
+          })
+        }
+      }
+    }
+    return resultTokens
+  }
+}
diff --git a/client/src/extension.ts b/client/src/extension.ts
index 24606dbb..cb265caa 100644
--- a/client/src/extension.ts
+++ b/client/src/extension.ts
@@ -5,12 +5,14 @@
 
 import * as path from 'path'
 
-import { workspace } from 'vscode'
+import { workspace, languages } from 'vscode'
 import { LanguageClient, TransportKind } from 'vscode-languageclient/node'
 
 import type { ExtensionContext } from 'vscode'
 import type { LanguageClientOptions, ServerOptions } from 'vscode-languageclient/node'
 
+import { legend, BitBakeDocumentSemanticTokensProvider } from './BitBakeDocumentSemanticTokensProvider'
+
 let client: LanguageClient
 export async function activate (context: ExtensionContext): Promise<void> {
   console.log('Congratulations, your extension "BitBake" is now active!')
@@ -48,6 +50,8 @@ export async function activate (context: ExtensionContext): Promise<void> {
 
   // Start the client and launch the server
   await client.start()
+
+  context.subscriptions.push(languages.registerDocumentSemanticTokensProvider({ language: 'bitbake', scheme: 'file' }, new BitBakeDocumentSemanticTokensProvider(), legend))
 }
 
 export function deactivate (): Thenable<void> | undefined {
diff --git a/client/syntaxes/bitbake.tmLanguage.json b/client/syntaxes/bitbake.tmLanguage.json
index 40b8cc41..8bbd9b45 100644
--- a/client/syntaxes/bitbake.tmLanguage.json
+++ b/client/syntaxes/bitbake.tmLanguage.json
@@ -139,7 +139,7 @@
             }
         },
         "functions": {
-            "begin": "\\s*([a-zA-Z0-9_-][\\w-]*)(:(append|prepend|remove))?(?=\\s*\\()",
+            "begin": "\\s*([a-zA-Z_][\\w_]*)(:(append|prepend|remove))?(?=\\s*\\()",
             "beginCaptures": {
                 "1": {
                     "name": "entity.name.function.python.bb"
@@ -189,6 +189,17 @@
                 {
                    "include": "#keywords"
                 },
+                {
+                    "match": "(\\[)",
+                    "name": "support.function.bracket-open.bb"
+                },
+                {
+                    "match": "(\\])",
+                    "name": "support.function.bracket-close.bb"
+                },
+                {
+                    "include": "#numeric"
+                },
                 {
                     "include": "#functions"
                 },
@@ -207,7 +218,7 @@
             ]
         },
         "variable-name": {
-            "match": "([a-zA-Z0-9_-][\\w-]*)(?!\\s*\\()",
+            "match": "([a-zA-Z_][\\w_]*)",
             "captures": {
                 "1": {
                     "name": "variable.other.names.bb"