diff --git a/compiler/parse/src/blankspace.rs b/compiler/parse/src/blankspace.rs
index 10b256b9b8..541936c861 100644
--- a/compiler/parse/src/blankspace.rs
+++ b/compiler/parse/src/blankspace.rs
@@ -110,6 +110,60 @@ where
     )
 }
 
+pub fn space0_around_ee<'a, P, S, E>(
+    parser: P,
+    min_indent: u16,
+    space_problem: fn(BadInputError, Row, Col) -> E,
+    indent_before_problem: fn(Row, Col) -> E,
+    indent_after_problem: fn(Row, Col) -> E,
+) -> impl Parser<'a, Located<S>, E>
+where
+    S: Spaceable<'a>,
+    S: 'a,
+    P: Parser<'a, Located<S>, E>,
+    P: 'a,
+    E: 'a,
+{
+    parser::map_with_arena(
+        and(
+            space0_e(min_indent, space_problem, indent_before_problem),
+            and(
+                parser,
+                space0_e(min_indent, space_problem, indent_after_problem),
+            ),
+        ),
+        move |arena: &'a Bump,
+              tuples: (
+            &'a [CommentOrNewline<'a>],
+            (Located<S>, &'a [CommentOrNewline<'a>]),
+        )| {
+            let (spaces_before, (loc_val, spaces_after)) = tuples;
+
+            if spaces_before.is_empty() {
+                if spaces_after.is_empty() {
+                    loc_val
+                } else {
+                    arena
+                        .alloc(loc_val.value)
+                        .with_spaces_after(spaces_after, loc_val.region)
+                }
+            } else if spaces_after.is_empty() {
+                arena
+                    .alloc(loc_val.value)
+                    .with_spaces_before(spaces_before, loc_val.region)
+            } else {
+                let wrapped_expr = arena
+                    .alloc(loc_val.value)
+                    .with_spaces_after(spaces_after, loc_val.region);
+
+                arena
+                    .alloc(wrapped_expr.value)
+                    .with_spaces_before(spaces_before, wrapped_expr.region)
+            }
+        },
+    )
+}
+
 /// Parses the given expression with 1 or more (spaces/comments/newlines) before it,
 /// and also 1 or more spaces after it.
 /// Returns a Located<Expr> where the location is around the Expr, ignoring the spaces.
diff --git a/compiler/parse/src/expr.rs b/compiler/parse/src/expr.rs
index 8d187f10fb..9a7e593658 100644
--- a/compiler/parse/src/expr.rs
+++ b/compiler/parse/src/expr.rs
@@ -3,7 +3,8 @@ use crate::ast::{
 };
 use crate::blankspace::{
     line_comment, space0, space0_after, space0_after_e, space0_around, space0_around_e,
-    space0_before, space0_before_e, space0_e, space1, space1_around, space1_before, spaces_exactly,
+    space0_around_ee, space0_before, space0_before_e, space0_e, space1, space1_around,
+    space1_before, spaces_exactly,
 };
 use crate::ident::{global_tag_or_ident, ident, lowercase_ident, Ident};
 use crate::keyword;
@@ -11,8 +12,8 @@ use crate::number_literal::number_literal;
 use crate::parser::{
     self, allocated, and_then_with_indent_level, ascii_char, ascii_string, attempt, backtrackable,
     fail, map, newline_char, not, not_followed_by, optional, sep_by1, specialize, specialize_ref,
-    then, unexpected, unexpected_eof, word1, word2, EExpr, Either, ParseResult, Parser, State,
-    SyntaxError, When,
+    then, unexpected, unexpected_eof, word1, word2, EExpr, ELambda, Either, ParseResult, Parser,
+    State, SyntaxError, When,
 };
 use crate::pattern::loc_closure_param;
 use crate::type_annotation;
@@ -596,7 +597,13 @@ pub fn def<'a>(min_indent: u16) -> impl Parser<'a, Def<'a>, SyntaxError<'a>> {
 // PARSER HELPERS
 
 fn pattern<'a>(min_indent: u16) -> impl Parser<'a, Located<Pattern<'a>>, SyntaxError<'a>> {
-    space0_after(loc_closure_param(min_indent), min_indent)
+    space0_after(
+        specialize(
+            |e, _, _| SyntaxError::Pattern(e),
+            loc_closure_param(min_indent),
+        ),
+        min_indent,
+    )
 }
 
 fn spaces_then_comment_or_newline<'a>() -> impl Parser<'a, Option<&'a str>, SyntaxError<'a>> {
@@ -971,32 +978,44 @@ fn reserved_keyword<'a>() -> impl Parser<'a, (), SyntaxError<'a>> {
 }
 
 fn closure<'a>(min_indent: u16) -> impl Parser<'a, Expr<'a>, SyntaxError<'a>> {
+    specialize(
+        |e, r, c| SyntaxError::Expr(EExpr::Lambda(e, r, c)),
+        closure_help(min_indent),
+    )
+}
+
+fn closure_help<'a>(min_indent: u16) -> impl Parser<'a, Expr<'a>, ELambda<'a>> {
     map_with_arena!(
         skip_first!(
             // All closures start with a '\' - e.g. (\x -> x + 1)
-            ascii_char(b'\\'),
+            word1(b'\\', ELambda::Start),
             // Once we see the '\', we're committed to parsing this as a closure.
             // It may turn out to be malformed, but it is definitely a closure.
             optional(and!(
                 // Parse the params
-                attempt!(
-                    Attempting::ClosureParams,
-                    // Params are comma-separated
-                    sep_by1(
-                        ascii_char(b','),
-                        space0_around(loc_closure_param(min_indent), min_indent)
+                // Params are comma-separated
+                sep_by1(
+                    word1(b',', ELambda::Comma),
+                    space0_around_ee(
+                        specialize(ELambda::Pattern, loc_closure_param(min_indent)),
+                        min_indent,
+                        ELambda::Space,
+                        ELambda::IndentArg,
+                        ELambda::IndentArrow
                     )
                 ),
                 skip_first!(
                     // Parse the -> which separates params from body
-                    ascii_string("->"),
+                    word2(b'-', b'>', ELambda::Arrow),
                     // Parse the body
-                    attempt!(
-                        Attempting::ClosureBody,
-                        space0_before(
-                            loc!(move |arena, state| parse_expr(min_indent, arena, state)),
-                            min_indent,
-                        )
+                    space0_before_e(
+                        specialize_ref(
+                            ELambda::Syntax,
+                            loc!(move |arena, state| parse_expr(min_indent, arena, state))
+                        ),
+                        min_indent,
+                        ELambda::Space,
+                        ELambda::IndentBody
                     )
                 )
             ))
diff --git a/compiler/parse/src/parser.rs b/compiler/parse/src/parser.rs
index 71d2259bc1..2d1cf0fdb0 100644
--- a/compiler/parse/src/parser.rs
+++ b/compiler/parse/src/parser.rs
@@ -379,11 +379,28 @@ pub enum EExpr<'a> {
 
     When(When<'a>, Row, Col),
 
+    Lambda(ELambda<'a>, Row, Col),
+
     // EInParens(PInParens<'a>, Row, Col),
     IndentStart(Row, Col),
     IndentEnd(Row, Col),
 }
 
+#[derive(Debug, Clone, PartialEq, Eq)]
+pub enum ELambda<'a> {
+    Space(BadInputError, Row, Col),
+    Start(Row, Col),
+    Arrow(Row, Col),
+    Comma(Row, Col),
+    // TODO make EEXpr
+    Pattern(EPattern<'a>, Row, Col),
+    Syntax(&'a SyntaxError<'a>, Row, Col),
+
+    IndentArrow(Row, Col),
+    IndentBody(Row, Col),
+    IndentArg(Row, Col),
+}
+
 #[derive(Debug, Clone, PartialEq, Eq)]
 pub enum When<'a> {
     Space(BadInputError, Row, Col),
diff --git a/compiler/parse/src/pattern.rs b/compiler/parse/src/pattern.rs
index b9b3f576e6..b664797cf5 100644
--- a/compiler/parse/src/pattern.rs
+++ b/compiler/parse/src/pattern.rs
@@ -26,11 +26,8 @@ pub enum PatternType {
 
 pub fn loc_closure_param<'a>(
     min_indent: u16,
-) -> impl Parser<'a, Located<Pattern<'a>>, SyntaxError<'a>> {
-    specialize(
-        |e, _, _| SyntaxError::Pattern(e),
-        move |arena, state| parse_closure_param(arena, state, min_indent),
-    )
+) -> impl Parser<'a, Located<Pattern<'a>>, EPattern<'a>> {
+    move |arena, state| parse_closure_param(arena, state, min_indent)
 }
 
 fn parse_closure_param<'a>(