diff --git a/src/usexp/lexer.mll b/src/usexp/lexer.mll
index cb5d6343..69912d31 100644
--- a/src/usexp/lexer.mll
+++ b/src/usexp/lexer.mll
@@ -75,10 +75,14 @@ type block_string_line_kind =
 let comment   = ';' [^ '\n' '\r']*
 let newline   = '\r'? '\n'
 let blank     = [' ' '\t' '\012']
-let atom_char = [^ ';' '(' ')' '"' ' ' '\t' '\r' '\n' '\012']
 let digit     = ['0'-'9']
 let hexdigit  = ['0'-'9' 'a'-'f' 'A'-'F']
 
+let atom_char_jbuild =
+  [^ ';' '(' ')' '"' ' ' '\t' '\r' '\n' '\012']
+let atom_char_dune =
+  [^ ';' '(' ')' '"' '\000'-'\032' '\127'-'\255']
+
 (* rule for jbuild files *)
 rule jbuild_token = parse
   | newline
@@ -116,7 +120,7 @@ and jbuild_atom acc start = parse
     { lexbuf.lex_start_p <- start;
       error lexbuf "jbuild_atoms cannot contain |#"
     }
-  | ('#'+ | '|'+ | (atom_char # ['|' '#'])) as s
+  | ('#'+ | '|'+ | (atom_char_jbuild # ['|' '#'])) as s
     { jbuild_atom (if acc = "" then s else acc ^ s) start lexbuf
     }
   | ""
@@ -243,7 +247,7 @@ and token = parse
       lexbuf.lex_start_p <- start;
       Quoted_string s
     }
-  | atom_char+ as s
+  | atom_char_dune+ as s
     { Token.Atom (A s) }
   | eof
     { Eof }
diff --git a/src/usexp/usexp.ml b/src/usexp/usexp.ml
index 11bfd71d..48a3dd32 100644
--- a/src/usexp/usexp.ml
+++ b/src/usexp/usexp.ml
@@ -17,7 +17,7 @@ module Atom = struct
    let rec loop s i len =
      i = len ||
      match String.unsafe_get s i with
-     | '"' | '(' | ')' | ';' | ' ' | '\t' | '\n' | '\012' | '\r' -> false
+     | '"' | '(' | ')' | ';' | '\000'..'\032' | '\127'..'\255' -> false
      | _ -> loop s (i + 1) len
    in
    fun s ->
@@ -52,19 +52,8 @@ let atom s =
 
 let unsafe_atom_of_string s = Atom(A s)
 
-let should_be_atom =
-  let rec loop s i len =
-    i = len ||
-    match String.unsafe_get s i with
-    | '"' | '(' | ')' | ';' | '\000'..'\032' | '\127'..'\255' -> false
-    | _ -> loop s (i + 1) len
-  in
-  fun s ->
-    let len = String.length s in
-    len > 0 && loop s 0 len
-
 let atom_or_quoted_string s =
-  if should_be_atom s then Atom (A s)
+  if Atom.is_valid s then Atom (A s)
   else Quoted_string s
 
 let quote_length s =
@@ -260,7 +249,7 @@ module Ast = struct
     | List of Loc.t * t list
 
   let atom_or_quoted_string loc s =
-    if should_be_atom s then Atom (loc, A s)
+    if Atom.is_valid s then Atom (loc, A s)
     else Quoted_string (loc, s)
 
   let loc (Atom (loc, _) | Quoted_string (loc, _) | List (loc, _)) = loc
diff --git a/test/unit-tests/sexp.mlt b/test/unit-tests/sexp.mlt
index 77a4f2a0..a460ec76 100644
--- a/test/unit-tests/sexp.mlt
+++ b/test/unit-tests/sexp.mlt
@@ -137,3 +137,28 @@ parse {|"$bar%foo%"|}
 [%%expect{|
 - : parse_result = Same (Ok ["$bar%foo%"])
 |}]
+
+parse {|\%{foo}|}
+[%%expect{|
+- : parse_result = Same (Ok [\%{foo}])
+|}]
+
+parse {|\${foo}|}
+[%%expect{|
+- : parse_result = Same (Ok [\${foo}])
+|}]
+
+parse {|\$bar%foo%|}
+[%%expect{|
+- : parse_result = Same (Ok [\$bar%foo%])
+|}]
+
+parse {|\$bar\%foo%|}
+[%%expect{|
+- : parse_result = Same (Ok [\$bar\%foo%])
+|}]
+
+parse {|\$bar\%foo%{bar}|}
+[%%expect{|
+- : parse_result = Same (Ok [\$bar\%foo%{bar}])
+|}]