diff --git a/mk2rbc/mk2rbc.go b/mk2rbc/mk2rbc.go
index 74053fefb..d108a0d04 100644
--- a/mk2rbc/mk2rbc.go
+++ b/mk2rbc/mk2rbc.go
@@ -465,17 +465,17 @@ func newParseContext(ss *StarlarkScript, nodes []mkparser.Node) *parseContext {
 	return ctx
 }
 
-func (ctx *parseContext) lastAssignment(name string) *assignmentNode {
+func (ctx *parseContext) lastAssignment(v variable) *assignmentNode {
 	for va := ctx.varAssignments; va != nil; va = va.outer {
-		if v, ok := va.vars[name]; ok {
+		if v, ok := va.vars[v.name()]; ok {
 			return v
 		}
 	}
 	return nil
 }
 
-func (ctx *parseContext) setLastAssignment(name string, asgn *assignmentNode) {
-	ctx.varAssignments.vars[name] = asgn
+func (ctx *parseContext) setLastAssignment(v variable, asgn *assignmentNode) {
+	ctx.varAssignments.vars[v.name()] = asgn
 }
 
 func (ctx *parseContext) pushVarAssignments() {
@@ -532,7 +532,7 @@ func (ctx *parseContext) handleAssignment(a *mkparser.Assignment) []starlarkNode
 	if lhs == nil {
 		return []starlarkNode{ctx.newBadNode(a, "unknown variable %s", name)}
 	}
-	_, isTraced := ctx.tracedVariables[name]
+	_, isTraced := ctx.tracedVariables[lhs.name()]
 	asgn := &assignmentNode{lhs: lhs, mkValue: a.Value, isTraced: isTraced, location: ctx.errorLocation(a)}
 	if lhs.valueType() == starlarkTypeUnknown {
 		// Try to divine variable type from the RHS
@@ -565,8 +565,8 @@ func (ctx *parseContext) handleAssignment(a *mkparser.Assignment) []starlarkNode
 		}
 	}
 
-	asgn.previous = ctx.lastAssignment(name)
-	ctx.setLastAssignment(name, asgn)
+	asgn.previous = ctx.lastAssignment(lhs)
+	ctx.setLastAssignment(lhs, asgn)
 	switch a.Type {
 	case "=", ":=":
 		asgn.flavor = asgnSet
@@ -1268,12 +1268,12 @@ func (ctx *parseContext) parseReference(node mkparser.Node, ref *mkparser.MakeSt
 				args: []starlarkExpr{
 					&stringLiteralExpr{literal: substParts[0]},
 					&stringLiteralExpr{literal: substParts[1]},
-					NewVariableRefExpr(v, ctx.lastAssignment(v.name()) != nil),
+					NewVariableRefExpr(v, ctx.lastAssignment(v) != nil),
 				},
 			}
 		}
 		if v := ctx.addVariable(refDump); v != nil {
-			return NewVariableRefExpr(v, ctx.lastAssignment(v.name()) != nil)
+			return NewVariableRefExpr(v, ctx.lastAssignment(v) != nil)
 		}
 		return ctx.newBadExpr(node, "unknown variable %s", refDump)
 	}
diff --git a/mk2rbc/mk2rbc_test.go b/mk2rbc/mk2rbc_test.go
index 55d48ff54..8feea3d71 100644
--- a/mk2rbc/mk2rbc_test.go
+++ b/mk2rbc/mk2rbc_test.go
@@ -65,6 +65,10 @@ def init(g, handle):
 PRODUCT_NAME := Pixel 3
 PRODUCT_MODEL :=
 local_var = foo
+local-var-with-dashes := bar
+$(warning local-var-with-dashes: $(local-var-with-dashes))
+GLOBAL-VAR-WITH-DASHES := baz
+$(warning GLOBAL-VAR-WITH-DASHES: $(GLOBAL-VAR-WITH-DASHES))
 `,
 		expected: `load("//build/make/core:product_config.rbc", "rblf")
 
@@ -73,6 +77,10 @@ def init(g, handle):
   cfg["PRODUCT_NAME"] = "Pixel 3"
   cfg["PRODUCT_MODEL"] = ""
   _local_var = "foo"
+  _local_var_with_dashes = "bar"
+  rblf.mkwarning("pixel3.mk", "local-var-with-dashes: %s" % _local_var_with_dashes)
+  g["GLOBAL-VAR-WITH-DASHES"] = "baz"
+  rblf.mkwarning("pixel3.mk", "GLOBAL-VAR-WITH-DASHES: %s" % g["GLOBAL-VAR-WITH-DASHES"])
 `,
 	},
 	{
diff --git a/mk2rbc/variable.go b/mk2rbc/variable.go
index f7adca568..d037481f5 100644
--- a/mk2rbc/variable.go
+++ b/mk2rbc/variable.go
@@ -278,6 +278,14 @@ var presetVariables = map[string]bool{
 // addVariable returns a variable with a given name. A variable is
 // added if it does not exist yet.
 func (ctx *parseContext) addVariable(name string) variable {
+	// Heuristics: if variable's name is all lowercase, consider it local
+	// string variable.
+	isLocalVariable := name == strings.ToLower(name)
+	// Local variables can't have special characters in them, because they
+	// will be used as starlark identifiers
+	if isLocalVariable {
+		name = strings.ReplaceAll(strings.TrimSpace(name), "-", "_")
+	}
 	v, found := ctx.variables[name]
 	if !found {
 		_, preset := presetVariables[name]
@@ -288,9 +296,7 @@ func (ctx *parseContext) addVariable(name string) variable {
 			case VarClassSoong:
 				v = &otherGlobalVariable{baseVariable{nam: name, typ: vi.valueType, preset: preset}}
 			}
-		} else if name == strings.ToLower(name) {
-			// Heuristics: if variable's name is all lowercase, consider it local
-			// string variable.
+		} else if isLocalVariable {
 			v = &localVariable{baseVariable{nam: name, typ: starlarkTypeUnknown}}
 		} else {
 			vt := starlarkTypeUnknown