diff --git a/modules/change_detection/src/parser/ast.js b/modules/change_detection/src/parser/ast.js
index d493301f24..5c5e3520fc 100644
--- a/modules/change_detection/src/parser/ast.js
+++ b/modules/change_detection/src/parser/ast.js
@@ -425,10 +425,12 @@ export class ASTWithSource extends AST {
 
 export class TemplateBinding {
   key:string;
+  keyIsVar:boolean;
   name:string;
   expression:ASTWithSource;
-  constructor(key:string, name:string, expression:ASTWithSource) {
+  constructor(key:string, keyIsVar:boolean, name:string, expression:ASTWithSource) {
     this.key = key;
+    this.keyIsVar = keyIsVar;
     // only either name or expression will be filled.
     this.name = name;
     this.expression = expression;
diff --git a/modules/change_detection/src/parser/lexer.js b/modules/change_detection/src/parser/lexer.js
index c2d6dc68cd..6c71486904 100644
--- a/modules/change_detection/src/parser/lexer.js
+++ b/modules/change_detection/src/parser/lexer.js
@@ -62,6 +62,10 @@ export class Token {
     return (this.type == TOKEN_TYPE_KEYWORD);
   }
 
+  isKeywordVar():boolean {
+    return (this.type == TOKEN_TYPE_KEYWORD && this._strValue == "var");
+  }
+
   isKeywordNull():boolean {
     return (this.type == TOKEN_TYPE_KEYWORD && this._strValue == "null");
   }
@@ -469,6 +473,7 @@ var OPERATORS = SetWrapper.createFromList([
 
 
 var KEYWORDS = SetWrapper.createFromList([
+    'var',
     'null',
     'undefined',
     'true',
diff --git a/modules/change_detection/src/parser/parser.js b/modules/change_detection/src/parser/parser.js
index d0423429bd..df00dc2e18 100644
--- a/modules/change_detection/src/parser/parser.js
+++ b/modules/change_detection/src/parser/parser.js
@@ -123,6 +123,19 @@ class _ParseAST {
     }
   }
 
+  optionalKeywordVar():boolean {
+    if (this.peekKeywordVar()) {
+      this.advance();
+      return true;
+    } else {
+      return false;
+    }
+  }
+
+  peekKeywordVar():boolean {
+    return this.next.isKeywordVar() || this.next.isOperator('#');
+  }
+
   expectCharacter(code:int) {
     if (this.optionalCharacter(code)) return;
     this.error(`Missing expected ${StringWrapper.fromCharCode(code)}`);
@@ -469,21 +482,26 @@ class _ParseAST {
   parseTemplateBindings() {
     var bindings = [];
     while (this.index < this.tokens.length) {
+      var keyIsVar:boolean = this.optionalKeywordVar();
       var key = this.expectTemplateBindingKey();
       this.optionalCharacter($COLON);
       var name = null;
       var expression = null;
       if (this.next !== EOF) {
-        if (this.optionalOperator("#")) {
-          name = this.expectIdentifierOrKeyword();
-        } else {
+        if (keyIsVar) {
+          if (this.optionalOperator("=")) {
+            name = this.expectTemplateBindingKey();
+          } else {
+            name = '\$implicit';
+          }
+        } else if (!this.peekKeywordVar()) {
           var start = this.inputIndex;
           var ast = this.parseExpression();
           var source = this.input.substring(start, this.inputIndex);
           expression = new ASTWithSource(ast, source, this.location);
         }
       }
-      ListWrapper.push(bindings, new TemplateBinding(key, name, expression));
+      ListWrapper.push(bindings, new TemplateBinding(key, keyIsVar, name, expression));
       if (!this.optionalCharacter($SEMICOLON)) {
         this.optionalCharacter($COMMA);
       };
diff --git a/modules/change_detection/test/parser/parser_spec.js b/modules/change_detection/test/parser/parser_spec.js
index efc5c3ada2..87a515abd0 100644
--- a/modules/change_detection/test/parser/parser_spec.js
+++ b/modules/change_detection/test/parser/parser_spec.js
@@ -408,6 +408,16 @@ export function main() {
         return ListWrapper.map(templateBindings, (binding) => binding.key );
       }
 
+      function keyValues(templateBindings) {
+        return ListWrapper.map(templateBindings, (binding) => {
+          if (binding.keyIsVar) {
+            return '#' + binding.key + (isBlank(binding.name) ? '' : '=' + binding.name);
+          } else {
+            return binding.key +  (isBlank(binding.expression) ? '' : `=${binding.expression}`)
+          }
+        });
+      }
+
       function names(templateBindings) {
         return ListWrapper.map(templateBindings, (binding) => binding.name );
       }
@@ -466,9 +476,7 @@ export function main() {
 
       it('should detect names as value', () => {
         var bindings = parseTemplateBindings("a:#b");
-        expect(names(bindings)).toEqual(['b']);
-        expect(exprSources(bindings)).toEqual([null]);
-        expect(exprAsts(bindings)).toEqual([null]);
+        expect(keyValues(bindings)).toEqual(['a', '#b']);
       });
 
       it('should allow space and colon as separators', () => {
@@ -497,6 +505,26 @@ export function main() {
         var bindings = parseTemplateBindings("a 1,b 2", 'location');
         expect(bindings[0].expression.location).toEqual('location');
       });
+
+      it('should support var/# notation', () => {
+        var bindings = parseTemplateBindings("var i");
+        expect(keyValues(bindings)).toEqual(['#i']);
+
+        bindings = parseTemplateBindings("#i");
+        expect(keyValues(bindings)).toEqual(['#i']);
+
+        bindings = parseTemplateBindings("var i-a = k-a");
+        expect(keyValues(bindings)).toEqual(['#i-a=k-a']);
+
+        bindings = parseTemplateBindings("keyword var item; var i = k");
+        expect(keyValues(bindings)).toEqual(['keyword', '#item=\$implicit', '#i=k']);
+
+        bindings = parseTemplateBindings("keyword: #item; #i = k");
+        expect(keyValues(bindings)).toEqual(['keyword', '#item=\$implicit', '#i=k']);
+
+        bindings = parseTemplateBindings("directive: var item in expr; var a = b", 'location');
+        expect(keyValues(bindings)).toEqual(['directive', '#item=\$implicit', 'in=expr in location', '#a=b']);
+      });
     });
 
     describe('parseInterpolation', () => {
diff --git a/modules/core/src/compiler/pipeline/compile_element.js b/modules/core/src/compiler/pipeline/compile_element.js
index ceb05425f3..b0ab1171ef 100644
--- a/modules/core/src/compiler/pipeline/compile_element.js
+++ b/modules/core/src/compiler/pipeline/compile_element.js
@@ -23,6 +23,10 @@ export class CompileElement {
   textNodeBindings:Map;
   propertyBindings:Map;
   eventBindings:Map;
+
+  /// Store directive name to template name mapping.
+  /// Directive name is what the directive exports the variable as
+  /// Template name is how it is reffered to it in template
   variableBindings:Map;
   decoratorDirectives:List<DirectiveMetadata>;
   templateDirective:DirectiveMetadata;
@@ -102,11 +106,11 @@ export class CompileElement {
     MapWrapper.set(this.propertyBindings, property, expression);
   }
 
-  addVariableBinding(contextName:string, templateName:string) {
+  addVariableBinding(directiveName:string, templateName:string) {
     if (isBlank(this.variableBindings)) {
       this.variableBindings = MapWrapper.create();
     }
-    MapWrapper.set(this.variableBindings, contextName, templateName);
+    MapWrapper.set(this.variableBindings, templateName, directiveName);
   }
 
   addEventBinding(eventName:string, expression:AST) {
diff --git a/modules/core/src/compiler/pipeline/element_binder_builder.js b/modules/core/src/compiler/pipeline/element_binder_builder.js
index 94caabde67..282f33d361 100644
--- a/modules/core/src/compiler/pipeline/element_binder_builder.js
+++ b/modules/core/src/compiler/pipeline/element_binder_builder.js
@@ -97,8 +97,8 @@ export class ElementBinderBuilder extends CompileStep {
           MapWrapper.get(compileElement.propertyBindings, elProp) :
             null;
         if (isBlank(expression)) {
-          throw new BaseException('No element binding found for property '+elProp
-            +' which is required by directive '+stringify(directive.type));
+          throw new BaseException("No element binding found for property '" + elProp
+            + "' which is required by directive '" + stringify(directive.type) + "'");
         }
         var len = dirProp.length;
         var dirBindingName = dirProp;
diff --git a/modules/core/src/compiler/pipeline/property_binding_parser.js b/modules/core/src/compiler/pipeline/property_binding_parser.js
index ebece54e36..aed44b9dc8 100644
--- a/modules/core/src/compiler/pipeline/property_binding_parser.js
+++ b/modules/core/src/compiler/pipeline/property_binding_parser.js
@@ -9,7 +9,7 @@ import {CompileElement} from './compile_element';
 import {CompileControl} from './compile_control';
 
 // TODO(tbosch): Cannot make this const/final right now because of the transpiler...
-var BIND_NAME_REGEXP = RegExpWrapper.create('^(?:(?:(bind)|(let)|(on))-(.+))|\\[([^\\]]+)\\]|\\(([^\\)]+)\\)');
+var BIND_NAME_REGEXP = RegExpWrapper.create('^(?:(?:(bind)|(var)|(on))-(.+))|\\[([^\\]]+)\\]|\\(([^\\)]+)\\)');
 
 /**
  * Parses the property bindings on a single element.
@@ -40,7 +40,7 @@ export class PropertyBindingParser extends CompileStep {
           // Note: We assume that the ViewSplitter already did its work, i.e. template directive should
           // only be present on <template> elements any more!
           if (!(current.element instanceof TemplateElement)) {
-            throw new BaseException('let-* is only allowed on <template> elements!');
+            throw new BaseException('var-* is only allowed on <template> elements!');
           }
           current.addVariableBinding(bindParts[4], attrValue);
         } else if (isPresent(bindParts[3])) {
diff --git a/modules/core/src/compiler/pipeline/view_splitter.js b/modules/core/src/compiler/pipeline/view_splitter.js
index 5cefc77e41..187274f496 100644
--- a/modules/core/src/compiler/pipeline/view_splitter.js
+++ b/modules/core/src/compiler/pipeline/view_splitter.js
@@ -80,7 +80,7 @@ export class ViewSplitter extends CompileStep {
     var bindings = this._parser.parseTemplateBindings(templateBindings, this._compilationUnit);
     for (var i=0; i<bindings.length; i++) {
       var binding = bindings[i];
-      if (isPresent(binding.name)) {
+      if (binding.keyIsVar) {
         compileElement.addVariableBinding(binding.key, binding.name);
       } else if (isPresent(binding.expression)) {
         compileElement.addPropertyBinding(binding.key, binding.expression);
diff --git a/modules/core/test/compiler/integration_spec.js b/modules/core/test/compiler/integration_spec.js
index ec023672d1..7aad9aa34e 100644
--- a/modules/core/test/compiler/integration_spec.js
+++ b/modules/core/test/compiler/integration_spec.js
@@ -97,7 +97,7 @@ export function main() {
       });
 
       it('should support template directives via `<template>` elements.', (done) => {
-        compiler.compile(MyComp, el('<div><template let-some-tmpl="greeting"><copy-me>{{greeting}}</copy-me></template></div>')).then((pv) => {
+        compiler.compile(MyComp, el('<div><template some-tmplate var-greeting="some-tmpl"><copy-me>{{greeting}}</copy-me></template></div>')).then((pv) => {
           createView(pv);
 
           cd.detectChanges();
@@ -112,7 +112,7 @@ export function main() {
       });
 
       it('should support template directives via `template` attribute.', (done) => {
-        compiler.compile(MyComp, el('<div><copy-me template="some-tmpl #greeting">{{greeting}}</copy-me></div>')).then((pv) => {
+        compiler.compile(MyComp, el('<div><copy-me template="some-tmplate: var greeting=some-tmpl">{{greeting}}</copy-me></div>')).then((pv) => {
           createView(pv);
 
           cd.detectChanges();
@@ -170,7 +170,7 @@ class ChildComp {
 }
 
 @Template({
-  selector: '[some-tmpl]'
+  selector: '[some-tmplate]'
 })
 class SomeTemplate {
   constructor(viewPort: ViewPort) {
diff --git a/modules/core/test/compiler/pipeline/element_binder_builder_spec.js b/modules/core/test/compiler/pipeline/element_binder_builder_spec.js
index 7473463b31..b0532cb9e7 100644
--- a/modules/core/test/compiler/pipeline/element_binder_builder_spec.js
+++ b/modules/core/test/compiler/pipeline/element_binder_builder_spec.js
@@ -249,7 +249,7 @@ export function main() {
         var pipeline = createPipeline({propertyBindings: MapWrapper.create(), directives: [SomeDecoratorDirectiveWithBinding]});
         expect( () => {
           pipeline.process(el('<div viewroot prop-binding directives>'));
-        }).toThrowError('No element binding found for property boundprop1 which is required by directive SomeDecoratorDirectiveWithBinding');
+        }).toThrowError("No element binding found for property 'boundprop1' which is required by directive 'SomeDecoratorDirectiveWithBinding'");
       });
 
     });
diff --git a/modules/core/test/compiler/pipeline/property_binding_parser_spec.js b/modules/core/test/compiler/pipeline/property_binding_parser_spec.js
index dd80504cb2..157765a808 100644
--- a/modules/core/test/compiler/pipeline/property_binding_parser_spec.js
+++ b/modules/core/test/compiler/pipeline/property_binding_parser_spec.js
@@ -29,15 +29,15 @@ export function main() {
       expect(MapWrapper.get(results[0].propertyBindings, 'a').source).toEqual('{{b}}');
     });
 
-    it('should detect let- syntax', () => {
-      var results = createPipeline().process(el('<template let-a="b"></template>'));
-      expect(MapWrapper.get(results[0].variableBindings, 'a')).toEqual('b');
+    it('should detect var- syntax', () => {
+      var results = createPipeline().process(el('<template var-a="b"></template>'));
+      expect(MapWrapper.get(results[0].variableBindings, 'b')).toEqual('a');
     });
 
-    it('should not allow let- syntax on non template elements', () => {
+    it('should not allow var- syntax on non template elements', () => {
       expect( () => {
-        createPipeline().process(el('<div let-a="b"></div>'))
-      }).toThrowError('let-* is only allowed on <template> elements!');
+        createPipeline().process(el('<div var-a="b"></div>'))
+      }).toThrowError('var-* is only allowed on <template> elements!');
     });
 
     it('should detect () syntax', () => {
diff --git a/modules/core/test/compiler/pipeline/view_splitter_spec.js b/modules/core/test/compiler/pipeline/view_splitter_spec.js
index ada90da6d9..839a5e4047 100644
--- a/modules/core/test/compiler/pipeline/view_splitter_spec.js
+++ b/modules/core/test/compiler/pipeline/view_splitter_spec.js
@@ -78,9 +78,9 @@ export function main() {
       });
 
       it('should add variable mappings from the template attribute', () => {
-        var rootElement = el('<div><div template="varName #mapName"></div></div>');
+        var rootElement = el('<div><div template="var varName=mapName"></div></div>');
         var results = createPipeline().process(rootElement);
-        expect(results[1].variableBindings).toEqual(MapWrapper.createFromStringMap({'varName': 'mapName'}));
+        expect(results[1].variableBindings).toEqual(MapWrapper.createFromStringMap({'mapName': 'varName'}));
       });
 
       it('should add entries without value as attribute to the element', () => {
@@ -101,4 +101,4 @@ export function main() {
     });
 
   });
-}
\ No newline at end of file
+}
diff --git a/modules/directives/src/ng_repeat.js b/modules/directives/src/ng_repeat.js
index d50fb25afe..3bc599b0b3 100644
--- a/modules/directives/src/ng_repeat.js
+++ b/modules/directives/src/ng_repeat.js
@@ -49,7 +49,7 @@ export class NgRepeat extends OnChange {
   }
 
   perViewChange(view, record) {
-    view.setLocal('ng-repeat', record.item);
+    view.setLocal('\$implicit', record.item);
     view.setLocal('index', record.currentIndex);
   }
 
diff --git a/modules/directives/test/ng_repeat_spec.js b/modules/directives/test/ng_repeat_spec.js
index 19ac6c521c..f8d1965e94 100644
--- a/modules/directives/test/ng_repeat_spec.js
+++ b/modules/directives/test/ng_repeat_spec.js
@@ -193,7 +193,8 @@ export function main() {
 
 
   it('should display indices correctly', (done) => {
-    var INDEX_TEMPLATE = '<div><copy-me template="ng-repeat #item in items index #i">{{i.toString()}}</copy-me></div>';
+    var INDEX_TEMPLATE =
+      '<div><copy-me template="ng-repeat: var item in items; var i=index">{{i.toString()}}</copy-me></div>';
     compileWithTemplate(INDEX_TEMPLATE).then((pv) => {
       createView(pv);
       component.items = [0, 1, 2, 3, 4, 5, 6, 7, 8, 9];