diff --git a/spec/compiler/formatter/formatter_spec.cr b/spec/compiler/formatter/formatter_spec.cr
index 943dea41ed14..4d1549b45a1f 100644
--- a/spec/compiler/formatter/formatter_spec.cr
+++ b/spec/compiler/formatter/formatter_spec.cr
@@ -209,6 +209,8 @@ describe Crystal::Formatter do
   assert_format "def   foo (  &@block)  \n  end", "def foo(&@block)\nend"
   assert_format "def   foo (  @select)  \n  end", "def foo(@select)\nend"
   assert_format "def   foo (  @@select)  \n  end", "def foo(@@select)\nend"
+  assert_format "def   foo (  bar  @select)  \n  end", "def foo(bar @select)\nend"
+  assert_format "def   foo (  bar  @@select)  \n  end", "def foo(bar @@select)\nend"
   assert_format "def foo(a, &@b)\nend"
   assert_format "def   foo (  x  =   1 )  \n  end", "def foo(x = 1)\nend"
   assert_format "def   foo (  x  :  Int32 )  \n  end", "def foo(x : Int32)\nend"
diff --git a/spec/compiler/parser/parser_spec.cr b/spec/compiler/parser/parser_spec.cr
index 8da2cb980dd7..2389a72af9c1 100644
--- a/spec/compiler/parser/parser_spec.cr
+++ b/spec/compiler/parser/parser_spec.cr
@@ -268,6 +268,8 @@ module Crystal
       it_parses "def foo(#{kw} foo); end", Def.new("foo", [Arg.new("foo", external_name: kw.to_s)])
       it_parses "def foo(@#{kw}); end", Def.new("foo", [Arg.new("__arg0", external_name: kw.to_s)], [Assign.new("@#{kw}".instance_var, "__arg0".var)] of ASTNode)
       it_parses "def foo(@@#{kw}); end", Def.new("foo", [Arg.new("__arg0", external_name: kw.to_s)], [Assign.new("@@#{kw}".class_var, "__arg0".var)] of ASTNode)
+      it_parses "def foo(x @#{kw}); end", Def.new("foo", [Arg.new("__arg0", external_name: "x")], [Assign.new("@#{kw}".instance_var, "__arg0".var)] of ASTNode)
+      it_parses "def foo(x @@#{kw}); end", Def.new("foo", [Arg.new("__arg0", external_name: "x")], [Assign.new("@@#{kw}".class_var, "__arg0".var)] of ASTNode)
 
       assert_syntax_error "foo { |#{kw}| }", "cannot use '#{kw}' as a block parameter name", 1, 8
       assert_syntax_error "foo { |(#{kw})| }", "cannot use '#{kw}' as a block parameter name", 1, 9
diff --git a/src/compiler/crystal/syntax/parser.cr b/src/compiler/crystal/syntax/parser.cr
index 0b69138720e9..b011edf0630d 100644
--- a/src/compiler/crystal/syntax/parser.cr
+++ b/src/compiler/crystal/syntax/parser.cr
@@ -4041,8 +4041,12 @@ module Crystal
         # def method(select __arg0)
         #   @select = __arg0
         # end
-        if !external_name && invalid_internal_name?(param_name)
-          param_name, external_name = temp_arg_name, param_name
+        #
+        # The external name defaults to the internal one unless otherwise
+        # specified (i.e. `def method(foo @select)`).
+        if invalid_internal_name?(param_name)
+          external_name ||= param_name
+          param_name = temp_arg_name
         end
 
         ivar = InstanceVar.new(@token.value.to_s).at(location)
@@ -4062,8 +4066,9 @@ module Crystal
         end
 
         # Same case as :INSTANCE_VAR for things like @select
-        if !external_name && invalid_internal_name?(param_name)
-          param_name, external_name = temp_arg_name, param_name
+        if invalid_internal_name?(param_name)
+          external_name ||= param_name
+          param_name = temp_arg_name
         end
 
         cvar = ClassVar.new(@token.value.to_s).at(location)