diff --git a/moo.js b/moo.js
index cf3a27e..56bb729 100644
--- a/moo.js
+++ b/moo.js
@@ -53,6 +53,13 @@
     }
   }
 
+  function zeropad(string, length) {
+    if (string.length < length) {
+      return new Array(length - string.length + 1).join("0") + string
+    }
+    return string
+  }
+
   function objectToRules(object) {
     var keys = Object.getOwnPropertyNames(object)
     var result = []
@@ -227,13 +234,60 @@
       // convert to RegExp
       var pat = reUnion(match.map(regexpOrLiteral))
 
+      // Add backreference support
+      var groupCount = reGroups(pat)
+      let numberOfGroupsPreviousToBackreferences = groups.length
+      for (let g = 0; g < groupCount; g++) {
+        /*
+         * Stub group for this capture group, this should never be referenced
+         * later in the code since the capture group will only be non-null if
+         * the parent capture group (with lower index) is non-null, in which
+         * case the parent will win.
+         */
+        groups.push(null)
+      }
+      /*
+       * Replace backreferences like \1 with backreferences to the correct
+       * placeholder in the built regexp, being careful to avoid
+       * false-positives due to escaped backslashes.
+       */
+      var hasBackreference = false
+      if (groupCount > 0) {
+        /*
+         * WARNING: we require your regexp to contain a capture group to opt
+         * into this because you cannot use this with certain regexps, e.g.
+         * `/()[\1]/` should matches SOH (U+0001) but we see the \1 as a
+         * backreference and rewrite it.
+         *
+         * To solve this, avoid octal escapes, use `\u0001` instead.
+         */
+
+        pat = pat.replace(/((?:^|[^\\])(?:\\\\)*\\)([1-9][0-9]*)(?=[^0-9])/g, (match, front, backreferenceGroupNumber) => {
+          const number = parseInt(backreferenceGroupNumber, 10)
+          const couldBeOctal = !!backreferenceGroupNumber.match(/^[0-7]+$/)
+          const octalNumber = couldBeOctal && parseInt(backreferenceGroupNumber, 8)
+          if (number < 1 || number > groupCount) {
+            throw new Error(
+              "Backreference \\" + backreferenceGroupNumber + " out of range in regexp " + pat
+              + (
+                couldBeOctal
+                ? " (if you meant to use an octal escape, instead use \\u" + zeropad(octalNumber.toString(16), 4) + ")"
+                : ""
+              )
+            )
+          }
+          hasBackreference = true
+          // Account for all the previous capture groups
+          return front + String(numberOfGroupsPreviousToBackreferences + number)
+        })
+      }
+
       // validate
       var regexp = new RegExp(pat)
       if (regexp.test("")) {
         throw new Error("RegExp matches empty string: " + regexp)
       }
-      var groupCount = reGroups(pat)
-      if (groupCount > 0) {
+      if (groupCount > 0 && !hasBackreference) {
         throw new Error("RegExp has capture groups: " + regexp + "\nUse (?: … ) instead")
       }
 
diff --git a/test/test.js b/test/test.js
index 2e20d18..8b7e55b 100644
--- a/test/test.js
+++ b/test/test.js
@@ -474,6 +474,56 @@ describe('value transforms', () => {
 
 })
 
+describe('backreferences', () => {
+  test('does not get processed if no capture groups', () => {
+    expect(() => moo.compile({
+      tok: /foo\1/,
+      tok2: /[\1]/
+    })).not.toThrow()
+  })
+
+  test('throws error on invalid backreference when capture groups present', () => {
+    expect(() => moo.compile({
+      tok: /(f)(o)\13/
+    })).toThrow('use \\u000b')
+  })
+
+  test('enable back-references', () => {
+    let lexer = moo.compile({
+      // https://www.postgresql.org/docs/11/sql-syntax-lexical.html#SQL-SYNTAX-DOLLAR-QUOTING
+      // The tag, if any, of a dollar-quoted string follows the same rules as an unquoted identifier, except that it cannot contain a dollar sign.
+      // SQL identifiers and key words must begin with a letter (a-z, but also letters with diacritical marks and non-Latin letters) or an underscore (_). Subsequent characters in an identifier or key word can be letters, underscores, digits (0-9), or dollar signs ($).
+      dollarStringConstant: {
+        match: /\$([\w_][\w\d_]*)?\$[^]*?\$\1\$/,
+        lineBreaks: true,
+      },
+
+      fubar: 'fubar',
+    });
+    const dollarString = '$outer$ outer $middle$ middle $inner$\n!inner!\n$inner$ /middle $middle$ /outer $outer$'
+    const fullString = 'fubar' + dollarString + 'fubar'
+    lexer.reset(fullString)
+    let tokens = lexAll(lexer).filter(t => t.type !== 'space')
+    expect(tokens.shift()).toMatchObject({ type: 'fubar', text: 'fubar', value: 'fubar' })
+    expect(tokens.shift()).toMatchObject({ type: 'dollarStringConstant', text: dollarString, value: dollarString })
+    expect(tokens.shift()).toMatchObject({ type: 'fubar', text: 'fubar', value: 'fubar' })
+  })
+
+  test('works with multi-digit backreferences', () => {
+    let lexer = moo.compile({
+      test: /(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)\11/,
+      fubar: 'fubar',
+    });
+    const alpha = 'abcdefghijklk'
+    const fullString = 'fubar' + alpha + 'fubar'
+    lexer.reset(fullString)
+    let tokens = lexAll(lexer).filter(t => t.type !== 'space')
+    expect(tokens.shift()).toMatchObject({ type: 'fubar', text: 'fubar', value: 'fubar' })
+    expect(tokens.shift()).toMatchObject({ type: 'test', text: alpha, value: alpha })
+    expect(tokens.shift()).toMatchObject({ type: 'fubar', text: 'fubar', value: 'fubar' })
+  })
+});
+
 describe('lexer', () => {
 
   var simpleLexer = compile({