diff --git a/Cakefile b/Cakefile
index b85639ac..8ccbe7bc 100644
--- a/Cakefile
+++ b/Cakefile
@@ -16,25 +16,25 @@ run = (args) ->
 
 # Log a message with a color.
 log = (message, color, explanation) ->
-  puts "$color$message$reset ${explanation or ''}"
+  puts "#color#message#reset #{explanation or ''}"
 
 option '-p', '--prefix [DIR]', 'set the installation prefix for `cake install`'
 
 task 'install', 'install CoffeeScript into /usr/local (or --prefix)', (options) ->
   base = options.prefix or '/usr/local'
-  lib  = "$base/lib/coffee-script"
-  bin  = "$base/bin"
+  lib  = "#base/lib/coffee-script"
+  bin  = "#base/bin"
   node = "~/.node_libraries/coffee-script"
-  puts   "Installing CoffeeScript to $lib"
-  puts   "Linking to $node"
-  puts   "Linking 'coffee' to $bin/coffee"
+  puts   "Installing CoffeeScript to #lib"
+  puts   "Linking to #node"
+  puts   "Linking 'coffee' to #bin/coffee"
   exec([
-    "mkdir -p $lib $bin"
-    "cp -rf bin lib LICENSE README package.json src $lib"
-    "ln -sf $lib/bin/coffee $bin/coffee"
-    "ln -sf $lib/bin/cake $bin/cake"
+    "mkdir -p #lib #bin"
+    "cp -rf bin lib LICENSE README package.json src #lib"
+    "ln -sf #lib/bin/coffee #bin/coffee"
+    "ln -sf #lib/bin/cake #bin/cake"
     "mkdir -p ~/.node_libraries"
-    "ln -sf $lib/lib $node"
+    "ln -sf #lib/lib #node"
   ].join(' && '), (err, stdout, stderr) ->
     if err then print stderr else log 'done', green
   )
@@ -88,7 +88,7 @@ task 'doc:underscore', 'rebuild the Underscore.coffee documentation page', ->
 
 task 'loc', 'count the lines of source code in the CoffeeScript compiler', ->
   sources = ['src/coffee-script.coffee', 'src/grammar.coffee', 'src/helpers.coffee', 'src/lexer.coffee', 'src/nodes.coffee', 'src/rewriter.coffee', 'src/scope.coffee']
-  exec "cat ${ sources.join(' ') } | grep -v '^\\( *#\\|\\s*$\\)' | wc -l | tr -s ' '", (err, stdout) ->
+  exec "cat #{ sources.join(' ') } | grep -v '^\\( *#\\|\\s*$\\)' | wc -l | tr -s ' '", (err, stdout) ->
     print stdout
 
 
@@ -103,9 +103,9 @@ task 'test', 'run the CoffeeScript language test suite', ->
   }
   process.on 'exit', ->
     time = ((new Date - startTime) / 1000).toFixed(2)
-    message = "passed $passedTests tests in $time seconds$reset"
+    message = "passed #passedTests tests in #time seconds#reset"
     if failedTests
-      log "failed $failedTests and $message", red
+      log "failed #failedTests and #message", red
     else
       log message, green
   fs.readdir 'test', (err, files) ->
@@ -117,4 +117,4 @@ task 'test', 'run the CoffeeScript language test suite', ->
           CoffeeScript.run code.toString(), {source: source}
         catch err
           failedTests += 1
-          log "failed $source", red, '\n' + err.stack.toString()
+          log "failed #source", red, '\n' + err.stack.toString()
diff --git a/lib/lexer.js b/lib/lexer.js
index c40f4ed5..419ea6ba 100644
--- a/lib/lexer.js
+++ b/lib/lexer.js
@@ -129,7 +129,7 @@
       if (!(starts(this.chunk, '"') || starts(this.chunk, "'"))) {
         return false;
       }
-      if (!(string = this.balancedToken(['"', '"'], ['${', '}'], ['#{', '}']) || this.balancedToken(["'", "'"]))) {
+      if (!(string = this.balancedToken(['"', '"'], ['#{', '}']) || this.balancedToken(["'", "'"]))) {
         return false;
       }
       this.interpolateString(string.replace(STRING_NEWLINES, " \\\n"));
@@ -471,7 +471,7 @@
             tokens.push(['IDENTIFIER', interp]);
             i += group.length - 1;
             pi = i + 1;
-          } else if ((expr = this.balancedString(str.substring(i), [['${', '}'], ['#{', '}']]))) {
+          } else if ((expr = this.balancedString(str.substring(i), [['#{', '}']]))) {
             if (pi < i) {
               tokens.push(['STRING', ("" + quote + (str.substring(pi, i)) + quote)]);
             }
@@ -580,16 +580,16 @@
   IDENTIFIER = /^([a-zA-Z\$_](\w|\$)*)/;
   NUMBER = /^(((\b0(x|X)[0-9a-fA-F]+)|((\b[0-9]+(\.[0-9]+)?|\.[0-9]+)(e[+\-]?[0-9]+)?)))\b/i;
   HEREDOC = /^("{6}|'{6}|"{3}\n?([\s\S]*?)\n?([ \t]*)"{3}|'{3}\n?([\s\S]*?)\n?([ \t]*)'{3})/;
-  INTERPOLATION = /^[$#]([a-zA-Z_@]\w*(\.\w+)*)/;
+  INTERPOLATION = /^#([a-zA-Z_@]\w*(\.\w+)*)/;
   OPERATOR = /^(-[\-=>]?|\+[+=]?|[*&|\/%=<>:!?]+)([ \t]*)/;
   WHITESPACE = /^([ \t]+)/;
-  COMMENT = /^(\s*#{3}(?!#)[ \t]*\n+([\s\S]*?)[ \t]*\n+[ \t]*#{3}|(\s*#(?!##[^#])[^\n]*)+)/;
+  COMMENT = /^(\s*\#{3}(?!#)[ \t]*\n+([\s\S]*?)[ \t]*\n+[ \t]*\#{3}|(\s*#(?!##[^#])[^\n]*)+)/;
   CODE = /^((-|=)>)/;
   MULTI_DENT = /^((\n([ \t]*))+)(\.)?/;
   LAST_DENTS = /\n([ \t]*)/g;
   LAST_DENT = /\n([ \t]*)/;
   REGEX_START = /^\/[^\/ ]/;
-  REGEX_INTERPOLATION = /([^\\]\$[a-zA-Z_@]|[^\\]\$\{.*[^\\]\})/;
+  REGEX_INTERPOLATION = /([^\\]#[a-zA-Z_@]|[^\\]#\{.*[^\\]\})/;
   REGEX_END = /^(([imgy]{1,4})\b|\W|$)/;
   REGEX_ESCAPE = /\\[^\$]/g;
   JS_CLEANER = /(^`|`$)/g;
diff --git a/src/lexer.coffee b/src/lexer.coffee
index 5de496d5..aebdc3d7 100644
--- a/src/lexer.coffee
+++ b/src/lexer.coffee
@@ -118,7 +118,7 @@ exports.Lexer = class Lexer
   stringToken: ->
     return false unless starts(@chunk, '"') or starts(@chunk, "'")
     return false unless string =
-      @balancedToken(['"', '"'], ['${', '}'], ['#{', '}']) or
+      @balancedToken(['"', '"'], ['#{', '}']) or
       @balancedToken ["'", "'"]
     @interpolateString string.replace STRING_NEWLINES, " \\\n"
     @line += count string, "\n"
@@ -400,7 +400,7 @@ exports.Lexer = class Lexer
           tokens.push ['IDENTIFIER', interp]
           i += group.length - 1
           pi = i + 1
-        else if (expr = @balancedString str.substring(i), [['${', '}'], ['#{', '}']])
+        else if (expr = @balancedString str.substring(i), [['#{', '}']])
           tokens.push ['STRING', "#quote#{ str.substring(pi, i) }#quote"] if pi < i
           inner = expr.substring(2, expr.length - 1)
           if inner.length
@@ -509,10 +509,10 @@ JS_FORBIDDEN = JS_KEYWORDS.concat RESERVED
 IDENTIFIER    = /^([a-zA-Z\$_](\w|\$)*)/
 NUMBER        = /^(((\b0(x|X)[0-9a-fA-F]+)|((\b[0-9]+(\.[0-9]+)?|\.[0-9]+)(e[+\-]?[0-9]+)?)))\b/i
 HEREDOC       = /^("{6}|'{6}|"{3}\n?([\s\S]*?)\n?([ \t]*)"{3}|'{3}\n?([\s\S]*?)\n?([ \t]*)'{3})/
-INTERPOLATION = /^[$#]([a-zA-Z_@]\w*(\.\w+)*)/
+INTERPOLATION = /^#([a-zA-Z_@]\w*(\.\w+)*)/
 OPERATOR      = /^(-[\-=>]?|\+[+=]?|[*&|\/%=<>:!?]+)([ \t]*)/
 WHITESPACE    = /^([ \t]+)/
-COMMENT       = /^(\s*#{3}(?!#)[ \t]*\n+([\s\S]*?)[ \t]*\n+[ \t]*#{3}|(\s*#(?!##[^#])[^\n]*)+)/
+COMMENT       = /^(\s*\#{3}(?!#)[ \t]*\n+([\s\S]*?)[ \t]*\n+[ \t]*\#{3}|(\s*#(?!##[^#])[^\n]*)+)/
 CODE          = /^((-|=)>)/
 MULTI_DENT    = /^((\n([ \t]*))+)(\.)?/
 LAST_DENTS    = /\n([ \t]*)/g
@@ -520,7 +520,7 @@ LAST_DENT     = /\n([ \t]*)/
 
 # Regex-matching-regexes.
 REGEX_START        = /^\/[^\/ ]/
-REGEX_INTERPOLATION= /([^\\]\$[a-zA-Z_@]|[^\\]\$\{.*[^\\]\})/
+REGEX_INTERPOLATION= /([^\\]#[a-zA-Z_@]|[^\\]#\{.*[^\\]\})/
 REGEX_END          = /^(([imgy]{1,4})\b|\W|$)/
 REGEX_ESCAPE       = /\\[^\$]/g
 
diff --git a/src/nodes.coffee b/src/nodes.coffee
index 435c440d..f1b56ca9 100644
--- a/src/nodes.coffee
+++ b/src/nodes.coffee
@@ -566,7 +566,7 @@ exports.RangeNode = class RangeNode extends BaseNode
     step       = del o, 'step'
     step       and= "#idx += #{step.compile(o)}"
     if from <= to
-      "#idx = #from; #idx <#@equals #to; #{step or "$idx++"}"
+      "#idx = #from; #idx <#@equals #to; #{step or "#idx++"}"
     else
       "#idx = #from; #idx >#@equals #to; #{step or "#idx--"}"
 
@@ -1536,6 +1536,6 @@ literal = (name) ->
 
 # Helper for ensuring that utility functions are assigned at the top level.
 utility = (name) ->
-  ref = "__$name"
+  ref = "__#name"
   Scope.root.assign ref, UTILITIES[name]
   ref
diff --git a/test/test_classes.coffee b/test/test_classes.coffee
index 4fef7816..b719139d 100644
--- a/test/test_classes.coffee
+++ b/test/test_classes.coffee
@@ -1,10 +1,10 @@
 # Test classes with a four-level inheritance chain.
 class Base
   func: (string) ->
-    "zero/$string"
+    "zero/#string"
 
   @static: (string) ->
-    "static/$string"
+    "static/#string"
 
 class FirstChild extends Base
   func: (string) ->
@@ -56,7 +56,7 @@ Base = ->
 Base::func = (string) ->
   'zero/' + string
 Base::['func-func'] = (string) ->
-  "dynamic-$string"
+  "dynamic-#string"
 
 FirstChild = ->
 FirstChild extends Base
@@ -137,7 +137,7 @@ class Dog
     @name = name
 
   bark: =>
-    "$@name woofs!"
+    "#@name woofs!"
 
 spark = new Dog('Spark')
 fido  = new Dog('Fido')
@@ -164,7 +164,7 @@ class Connection
     [@one, @two, @three] = [one, two, three]
 
   out: ->
-    "$@one-$@two-$@three"
+    "#@one-#@two-#@three"
 
 list = [3, 2, 1]
 conn = new Connection list...
diff --git a/test/test_functions.coffee b/test/test_functions.coffee
index 0809565e..22d5954e 100644
--- a/test/test_functions.coffee
+++ b/test/test_functions.coffee
@@ -85,11 +85,6 @@ fn = (arg) -> arg
 
 ok fn(fn {prop: 101}).prop is 101
 
-# Function calls sans-spacing.
-ok((fn (x) ->
-  3
-)() is 3)
-
 
 # Multi-blocks with optional parens.
 result = fn( ->
diff --git a/test/test_heredocs.coffee b/test/test_heredocs.coffee
index 5c6519cb..e54fd7a7 100644
--- a/test/test_heredocs.coffee
+++ b/test/test_heredocs.coffee
@@ -55,17 +55,17 @@ ok a is 'more"than"one"quote'
 val = 10
 
 a = """
-    basic heredoc $val
+    basic heredoc #val
     on two lines
     """
 
 b = '''
-    basic heredoc $val
+    basic heredoc #val
     on two lines
     '''
 
 ok a is "basic heredoc 10\non two lines"
-ok b is "basic heredoc \$val\non two lines"
+ok b is "basic heredoc \#val\non two lines"
 
 
 a = '''here's an apostrophe'''
diff --git a/test/test_pattern_matching.coffee b/test/test_pattern_matching.coffee
index e9706ee8..b089a3d3 100644
--- a/test/test_pattern_matching.coffee
+++ b/test/test_pattern_matching.coffee
@@ -119,7 +119,7 @@ persons = {
   Christopher: { name: "Stan" }
 }
 
-join1 = "$key: $name" for key, { name } of persons
+join1 = "#key: #name" for key, { name } of persons
 
 deepEqual join1, ["George: Bob", "Bob: Alice", "Christopher: Stan"]
 
@@ -129,11 +129,11 @@ persons = [
   { name: "Stan", parent: { name: "Christopher" } }
 ]
 
-join2 = "$parent: $name" for { name, parent: { name: parent } } in persons
+join2 = "#parent: #name" for { name, parent: { name: parent } } in persons
 
 deepEqual join1, join2
 
 persons = [['Bob', ['George']], ['Alice', ['Bob']], ['Stan', ['Christopher']]]
-join3 = "$parent: $name" for [name, [parent]] in persons
+join3 = "#parent: #name" for [name, [parent]] in persons
 
 deepEqual join2, join3
diff --git a/test/test_regexp_interpolation.coffee b/test/test_regexp_interpolation.coffee
index d2f016e6..d55e162d 100644
--- a/test/test_regexp_interpolation.coffee
+++ b/test/test_regexp_interpolation.coffee
@@ -1,20 +1,20 @@
 # Interpolate regular expressions.
 name = 'Moe'
 
-ok not not '"Moe"'.match(/^"${name}"$/i)
-ok '"Moe!"'.match(/^"${name}"$/i) is null
+ok not not '"Moe"'.match(/^"#{name}"$/i)
+ok '"Moe!"'.match(/^"#{name}"$/i) is null
 
-ok not not 'Moe'.match(/^$name$/)
-ok 'Moe!'.match(/^$name/)
+ok not not 'Moe'.match(/^#name$/)
+ok 'Moe!'.match(/^#name/)
 
-ok 'Moe!'.match(/${"${"${"$name"}"}"}/imgy)
+ok 'Moe!'.match(/#{"#{"#{"#name"}"}"}/imgy)
 
 ok '$a$b$c'.match(/\$A\$B\$C/i)
 
 a = 1
 b = 2
 c = 3
-ok '123'.match(/$a$b$c/i)
+ok '123'.match(/#a#b#c/i)
 
 [a, b, c] = [1, 2, /\d+/]
-ok (/$a$b$c$/i).toString() is '/12/\\d+/$/i'
+ok (/#a#b#c$/i).toString() is '/12/\\d+/$/i'