diff --git a/CHANGES.md b/CHANGES.md
index 5abb9290..e5f83774 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -8,6 +8,8 @@ next
 - Change the location of preprocessed files inside the build directory
   (#1004, @diml)
 
+- Fix parsing of `%{lib:name:file}` forms (#1022, fixes #1019, @diml)
+
 1.0.0 (10/07/2018)
 ------------------
 
diff --git a/src/usexp/dune_lexer.mll b/src/usexp/dune_lexer.mll
index 20720132..38186bef 100644
--- a/src/usexp/dune_lexer.mll
+++ b/src/usexp/dune_lexer.mll
@@ -282,7 +282,7 @@ and quoted_string_after_escaped_newline = parse
     { quoted_string lexbuf }
 
 and template_variable = parse
-  | (varname_char+ as name) (':' (varname_char* as payload))? '}'
+  | (varname_char+ as name) (':' ((':' | varname_char)* as payload))? '}'
     { let payload =
         match payload with
         | Some "" -> error lexbuf "payload after : in variable cannot be empty"
diff --git a/test/blackbox-tests/test-cases/github1019/dune b/test/blackbox-tests/test-cases/github1019/dune
index b1e70d55..6ac5a87b 100644
--- a/test/blackbox-tests/test-cases/github1019/dune
+++ b/test/blackbox-tests/test-cases/github1019/dune
@@ -1,5 +1,5 @@
-(library (name foo))
+(library (name foo) (public_name foo))
 
 (alias
  (name default)
- (echo %{lib:foo:foo.ml}))
+ (action (echo %{lib:foo:foo.ml})))
diff --git a/test/blackbox-tests/test-cases/github1019/foo.opam b/test/blackbox-tests/test-cases/github1019/foo.opam
new file mode 100644
index 00000000..e69de29b
diff --git a/test/blackbox-tests/test-cases/github1019/run.t b/test/blackbox-tests/test-cases/github1019/run.t
index c31fc32a..9bc93b70 100644
--- a/test/blackbox-tests/test-cases/github1019/run.t
+++ b/test/blackbox-tests/test-cases/github1019/run.t
@@ -1,6 +1,4 @@
 Regression test for #1019
 
   $ dune build
-  File "dune", line 5, characters 9-10:
-  Error: This character is not allowed inside %{...} forms
-  [1]
+  ../install/default/lib/foo/foo.ml