diff --git a/src/asm/lexer.c b/src/asm/lexer.c
index 138471ce..3d2bcf49 100644
--- a/src/asm/lexer.c
+++ b/src/asm/lexer.c
@@ -2026,7 +2026,7 @@ static int yylex_NORMAL(void)
 					}
 				}
 
-				if (tokenType == T_ID && lexerState->atLineStart)
+				if (tokenType == T_ID && (lexerState->atLineStart || peek(0) == ':'))
 					return T_LABEL;
 
 				return tokenType;
diff --git a/test/asm/label-indent.asm b/test/asm/label-indent.asm
new file mode 100644
index 00000000..2369196e
--- /dev/null
+++ b/test/asm/label-indent.asm
@@ -0,0 +1,30 @@
+
+SECTION "Label testing", WRAMX
+
+	Lab:
+	.loc
+	Lab.loc2
+
+;	X = 0
+;	; Should not believe X is a label!
+;	IF X == 1
+;		FAIL "Wrong!"
+;	ENDC
+;	X \
+;	  = 1
+;	IF X != 1
+;		FAIL "Wrong!"
+;	ENDC
+;
+;	Y equ 42
+;	PRINTT "Y={Y}\n"
+;	PURGE Y
+;
+;	Y equs "mac"
+;	mac: MACRO
+;		PRINTT "\1\n"
+;	ENDM
+;	; Should invoke macro Y, and not match "equ" due to the "a" behind it
+;	Y equates 69
+;	Y equsquisite (isn't that English?)
+;	Y eq
diff --git a/test/asm/label-indent.err b/test/asm/label-indent.err
new file mode 100644
index 00000000..e69de29b
diff --git a/test/asm/label-indent.out b/test/asm/label-indent.out
new file mode 100644
index 00000000..e69de29b
diff --git a/test/link/all-instructions.asm b/test/link/all-instructions.asm
index 09cd3d53..4e321ffc 100644
--- a/test/link/all-instructions.asm
+++ b/test/link/all-instructions.asm
@@ -2,7 +2,7 @@ SECTION "All instructions", ROM0[0]
 
     ; 8-bit Arithmetic and Logic Instructions
 
-alu_instruction_list : MACRO
+alu_instruction_list: MACRO
     \1 a,a
     \1 a,b
     \1 a,c
@@ -23,7 +23,7 @@ ENDM
     alu_instruction_list sub
     alu_instruction_list xor
 
-incdec_8bit_instruction_list : MACRO
+incdec_8bit_instruction_list: MACRO
     \1 a
     \1 b
     \1 c
@@ -56,7 +56,7 @@ ENDM
 
     ; Bit Operations Instructions
 
-bitop_u3_instruction_list : MACRO
+bitop_u3_instruction_list: MACRO
 NBIT SET 0
     REPT 8
         \1 NBIT,a
@@ -75,7 +75,7 @@ ENDM
     bitop_u3_instruction_list res
     bitop_u3_instruction_list set
 
-bitop_noarg_instruction_list : MACRO
+bitop_noarg_instruction_list: MACRO
     \1 a
     \1 b
     \1 c
@@ -105,7 +105,7 @@ ENDM
 
     ; Load Instructions
 
-ld_r8_x_instruction_list : MACRO
+ld_r8_x_instruction_list: MACRO
     ld \1,a
     ld \1,b
     ld \1,c
@@ -125,7 +125,7 @@ ENDM
     ld_r8_x_instruction_list [hl]
     ld_r8_x_instruction_list l
 
-ld_x_r8_instruction_list : MACRO
+ld_x_r8_instruction_list: MACRO
     ld a,\1
     ld b,\1
     ld c,\1