diff --git a/spec/extensions/snippets-spec.coffee b/spec/extensions/snippets-spec.coffee
index 499d88b95..83aed2ac6 100644
--- a/spec/extensions/snippets-spec.coffee
+++ b/spec/extensions/snippets-spec.coffee
@@ -85,3 +85,19 @@ describe "Snippets extension", ->
       expect(snippet.prefix).toBe 't2'
       expect(snippet.description).toBe "Test snippet 2"
       expect(snippet.body).toBe "this is a test 2"
+
+    it "can parse snippets with tabstops", ->
+      snippets = Snippets.snippetsParser.parse """
+        # this line intentially left blank.
+        snippet t1 "Test snippet 1"
+        then go back to here: ($2)
+        first go here: ($1)
+        endsnippet
+      """
+
+      snippet = snippets['t1']
+      expect(snippet.body).toBe """
+        then go back to here: ()
+        first go here: ()
+      """
+      expect(snippet.tabStops).toEqual [[1, 16], [0, 23]]
diff --git a/src/extensions/snippets/snippet.coffee b/src/extensions/snippets/snippet.coffee
new file mode 100644
index 000000000..9e938dfd3
--- /dev/null
+++ b/src/extensions/snippets/snippet.coffee
@@ -0,0 +1,21 @@
+_ = require 'underscore'
+
+module.exports =
+class Snippet
+  constructor: ({@bodyPosition, @prefix, @description, body}) ->
+    @body = @extractTabStops(body)
+
+  extractTabStops: (body) ->
+    tabStopsByIndex = {}
+    bodyText = []
+    for element in body
+      if element.index
+        tabStopsByIndex[element.index] = element.position.subtract(@bodyPosition)
+      else
+        bodyText.push(element)
+
+    @tabStops = []
+    for index in _.keys(tabStopsByIndex).sort()
+      @tabStops.push tabStopsByIndex[index]
+
+    bodyText.join('')
diff --git a/src/extensions/snippets/snippets.coffee b/src/extensions/snippets/snippets.coffee
index d69a8c00d..c39e2b7be 100644
--- a/src/extensions/snippets/snippets.coffee
+++ b/src/extensions/snippets/snippets.coffee
@@ -5,7 +5,7 @@ _ = require 'underscore'
 module.exports =
   name: 'Snippets'
   snippetsByExtension: {}
-  snippetsParser: PEG.buildParser(fs.read(require.resolve 'extensions/snippets/snippets.pegjs'))
+  snippetsParser: PEG.buildParser(fs.read(require.resolve 'extensions/snippets/snippets.pegjs'), trackLineAndColumn: true)
 
   activate: (@rootView) ->
     @loadSnippets()
diff --git a/src/extensions/snippets/snippets.pegjs b/src/extensions/snippets/snippets.pegjs
index f53683544..f615c134c 100644
--- a/src/extensions/snippets/snippets.pegjs
+++ b/src/extensions/snippets/snippets.pegjs
@@ -1,3 +1,8 @@
+{
+  var Snippet = require('extensions/snippets/snippet');
+  var Point = require('point');
+}
+
 snippets = snippets:snippet+ ws? {
   var snippetsByPrefix = {};
   snippets.forEach(function(snippet) {
@@ -6,17 +11,21 @@ snippets = snippets:snippet+ ws? {
   return snippetsByPrefix;
 }
 
-snippet = ws? start ws prefix:prefix ws description:string separator body:body end {
-  return { prefix: prefix, description: description, body: body };
+snippet = ws? start ws prefix:prefix ws description:string bodyPosition:beforeBody body:body end {
+  return new Snippet({ bodyPosition: bodyPosition, prefix: prefix, description: description, body: body });
 }
 
-separator = [ ]* '\n'
 start = 'snippet'
 prefix = prefix:[A-Za-z0-9_]+ { return prefix.join(''); }
-body = body:bodyCharacter* { return body.join(''); }
-bodyCharacter = !end char:. { return char; }
+string = ['] body:[^']* ['] { return body.join(''); }
+       / ["] body:[^"]* ["] { return body.join(''); }
+beforeBody = [ ]* '\n' { return new Point(line, 0); } // return start position of body: body begins on next line, so don't subtract 1 from line
+
+body = (tabStop / bodyText)*
+bodyText = body:bodyCharacter+ { return body.join(''); }
+bodyCharacter = !(end / tabStop) char:. { return char; }
+tabStop = '$' index:[0-9]+ { return { index: index, position: new Point(line - 1, column - 1) }; }
+
 end = '\nendsnippet'
-string
-  = ['] body:[^']* ['] { return body.join(''); }
-  / ["] body:[^"]* ["] { return body.join(''); }
-ws = [ \n]+
+ws = ([ \n] / comment)+
+comment = '#' [^\n]*