diff --git a/Grammar/Grammar b/Grammar/Grammar
index 6be7418b5f7..1a98a6aa698 100644
--- a/Grammar/Grammar
+++ b/Grammar/Grammar
@@ -123,7 +123,7 @@ try_stmt: 'try' ':' suite (except_clause ':' suite)+ | 'try' ':' suite 'finally'
 except_clause: 'except' [test [',' test]]
 suite: simple_stmt | NEWLINE INDENT stmt+ DEDENT
 
-test: and_test ('or' and_test)*
+test: and_test ('or' and_test)* | lambdef
 and_test: not_test ('and' not_test)*
 not_test: 'not' not_test | comparison
 comparison: expr (comp_op expr)*
@@ -135,9 +135,7 @@ shift_expr: arith_expr (('<<'|'>>') arith_expr)*
 arith_expr: term (('+'|'-') term)*
 term: factor (('*'|'/'|'%') factor)*
 factor: ('+'|'-'|'~') factor | atom trailer*
-atom: '(' [testlist] ')' | '[' [testlist] ']' | '{' [dictmaker] '}' | '`' testlist '`' | lambdef | NAME | NUMBER | STRING
-# Note ambiguity in grammar: "lambda x: x[1]" could mean "(lambda x: x)[1]"
-# but the parser is eager so interprets it as "lambda x: (x[1])"...
+atom: '(' [testlist] ')' | '[' [testlist] ']' | '{' [dictmaker] '}' | '`' testlist '`' | NAME | NUMBER | STRING
 lambdef: 'lambda' [varargslist] ':' test
 trailer: '(' [testlist] ')' | '[' subscript ']' | '.' NAME
 subscript: test | [test] ':' [test]
diff --git a/Python/compile.c b/Python/compile.c
index 77752a494b7..aee25850c7c 100644
--- a/Python/compile.c
+++ b/Python/compile.c
@@ -659,18 +659,6 @@ com_atom(c, n)
 		}
 		com_addoparg(c, LOAD_CONST, i);
 		break;
-	case lambdef:
-		if ((v = (object *) compile(ch, c->c_filename)) == NULL) {
-			c->c_errors++;
-			i = 255;
-		}
-		else {
-			i = com_addconst(c, v);
-			DECREF(v);
-		}
-		com_addoparg(c, LOAD_CONST, i);
-		com_addbyte(c, BUILD_FUNCTION);
-		break;
 	case NAME:
 		com_addopname(c, LOAD_NAME, ch);
 		break;
@@ -1106,20 +1094,35 @@ com_test(c, n)
 	struct compiling *c;
 	node *n;
 {
-	int i;
-	int anchor;
-	REQ(n, test); /* and_test ('and' and_test)* */
-	anchor = 0;
-	i = 0;
-	for (;;) {
-		com_and_test(c, CHILD(n, i));
-		if ((i += 2) >= NCH(n))
-			break;
-		com_addfwref(c, JUMP_IF_TRUE, &anchor);
-		com_addbyte(c, POP_TOP);
+	REQ(n, test); /* and_test ('and' and_test)* | lambdef */
+	if (NCH(n) == 1 && TYPE(CHILD(n, 0)) == lambdef) {
+		object *v;
+		int i;
+		v = (object *) compile(CHILD(n, 0), c->c_filename);
+		if (v == NULL) {
+			c->c_errors++;
+			i = 255;
+		}
+		else {
+			i = com_addconst(c, v);
+			DECREF(v);
+		}
+		com_addoparg(c, LOAD_CONST, i);
+		com_addbyte(c, BUILD_FUNCTION);
+	}
+	else {
+		int anchor = 0;
+		int i = 0;
+		for (;;) {
+			com_and_test(c, CHILD(n, i));
+			if ((i += 2) >= NCH(n))
+				break;
+			com_addfwref(c, JUMP_IF_TRUE, &anchor);
+			com_addbyte(c, POP_TOP);
+		}
+		if (anchor)
+			com_backpatch(c, anchor);
 	}
-	if (anchor)
-		com_backpatch(c, anchor);
 }
 
 static void
diff --git a/Python/graminit.c b/Python/graminit.c
index 1126b9c1d80..f923059a873 100644
--- a/Python/graminit.c
+++ b/Python/graminit.c
@@ -674,22 +674,31 @@ static state states_31[5] = {
 	{1, arcs_31_3},
 	{2, arcs_31_4},
 };
-static arc arcs_32_0[1] = {
+static arc arcs_32_0[2] = {
 	{72, 1},
+	{74, 2},
 };
 static arc arcs_32_1[2] = {
-	{73, 0},
+	{73, 3},
 	{0, 1},
 };
-static state states_32[2] = {
-	{1, arcs_32_0},
+static arc arcs_32_2[1] = {
+	{0, 2},
+};
+static arc arcs_32_3[1] = {
+	{72, 1},
+};
+static state states_32[4] = {
+	{2, arcs_32_0},
 	{2, arcs_32_1},
+	{1, arcs_32_2},
+	{1, arcs_32_3},
 };
 static arc arcs_33_0[1] = {
-	{74, 1},
+	{75, 1},
 };
 static arc arcs_33_1[2] = {
-	{75, 0},
+	{76, 0},
 	{0, 1},
 };
 static state states_33[2] = {
@@ -697,11 +706,11 @@ static state states_33[2] = {
 	{2, arcs_33_1},
 };
 static arc arcs_34_0[2] = {
-	{76, 1},
-	{77, 2},
+	{77, 1},
+	{78, 2},
 };
 static arc arcs_34_1[1] = {
-	{74, 2},
+	{75, 2},
 };
 static arc arcs_34_2[1] = {
 	{0, 2},
@@ -715,7 +724,7 @@ static arc arcs_35_0[1] = {
 	{54, 1},
 };
 static arc arcs_35_1[2] = {
-	{78, 0},
+	{79, 0},
 	{0, 1},
 };
 static state states_35[2] = {
@@ -723,16 +732,16 @@ static state states_35[2] = {
 	{2, arcs_35_1},
 };
 static arc arcs_36_0[10] = {
-	{79, 1},
 	{80, 1},
 	{81, 1},
 	{82, 1},
 	{83, 1},
 	{84, 1},
 	{85, 1},
+	{86, 1},
 	{55, 1},
-	{76, 2},
-	{86, 3},
+	{77, 2},
+	{87, 3},
 };
 static arc arcs_36_1[1] = {
 	{0, 1},
@@ -741,7 +750,7 @@ static arc arcs_36_2[1] = {
 	{55, 1},
 };
 static arc arcs_36_3[2] = {
-	{76, 1},
+	{77, 1},
 	{0, 3},
 };
 static state states_36[4] = {
@@ -751,10 +760,10 @@ static state states_36[4] = {
 	{2, arcs_36_3},
 };
 static arc arcs_37_0[1] = {
-	{87, 1},
+	{88, 1},
 };
 static arc arcs_37_1[2] = {
-	{88, 0},
+	{89, 0},
 	{0, 1},
 };
 static state states_37[2] = {
@@ -762,10 +771,10 @@ static state states_37[2] = {
 	{2, arcs_37_1},
 };
 static arc arcs_38_0[1] = {
-	{89, 1},
+	{90, 1},
 };
 static arc arcs_38_1[2] = {
-	{90, 0},
+	{91, 0},
 	{0, 1},
 };
 static state states_38[2] = {
@@ -773,10 +782,10 @@ static state states_38[2] = {
 	{2, arcs_38_1},
 };
 static arc arcs_39_0[1] = {
-	{91, 1},
+	{92, 1},
 };
 static arc arcs_39_1[2] = {
-	{92, 0},
+	{93, 0},
 	{0, 1},
 };
 static state states_39[2] = {
@@ -784,11 +793,11 @@ static state states_39[2] = {
 	{2, arcs_39_1},
 };
 static arc arcs_40_0[1] = {
-	{93, 1},
+	{94, 1},
 };
 static arc arcs_40_1[3] = {
-	{94, 0},
 	{95, 0},
+	{96, 0},
 	{0, 1},
 };
 static state states_40[2] = {
@@ -796,11 +805,11 @@ static state states_40[2] = {
 	{3, arcs_40_1},
 };
 static arc arcs_41_0[1] = {
-	{96, 1},
+	{97, 1},
 };
 static arc arcs_41_1[3] = {
-	{97, 0},
 	{98, 0},
+	{99, 0},
 	{0, 1},
 };
 static state states_41[2] = {
@@ -808,12 +817,12 @@ static state states_41[2] = {
 	{3, arcs_41_1},
 };
 static arc arcs_42_0[1] = {
-	{99, 1},
+	{100, 1},
 };
 static arc arcs_42_1[4] = {
 	{21, 0},
-	{100, 0},
 	{101, 0},
+	{102, 0},
 	{0, 1},
 };
 static state states_42[2] = {
@@ -821,16 +830,16 @@ static state states_42[2] = {
 	{4, arcs_42_1},
 };
 static arc arcs_43_0[4] = {
-	{97, 1},
 	{98, 1},
-	{102, 1},
-	{103, 2},
+	{99, 1},
+	{103, 1},
+	{104, 2},
 };
 static arc arcs_43_1[1] = {
-	{99, 3},
+	{100, 3},
 };
 static arc arcs_43_2[2] = {
-	{104, 2},
+	{105, 2},
 	{0, 2},
 };
 static arc arcs_43_3[1] = {
@@ -842,12 +851,11 @@ static state states_43[4] = {
 	{2, arcs_43_2},
 	{1, arcs_43_3},
 };
-static arc arcs_44_0[8] = {
+static arc arcs_44_0[7] = {
 	{16, 1},
-	{105, 2},
-	{107, 3},
-	{110, 4},
-	{111, 5},
+	{106, 2},
+	{108, 3},
+	{111, 4},
 	{12, 5},
 	{112, 5},
 	{113, 5},
@@ -858,11 +866,11 @@ static arc arcs_44_1[2] = {
 };
 static arc arcs_44_2[2] = {
 	{9, 7},
-	{106, 5},
+	{107, 5},
 };
 static arc arcs_44_3[2] = {
-	{108, 8},
-	{109, 5},
+	{109, 8},
+	{110, 5},
 };
 static arc arcs_44_4[1] = {
 	{9, 9},
@@ -874,16 +882,16 @@ static arc arcs_44_6[1] = {
 	{18, 5},
 };
 static arc arcs_44_7[1] = {
-	{106, 5},
+	{107, 5},
 };
 static arc arcs_44_8[1] = {
-	{109, 5},
-};
-static arc arcs_44_9[1] = {
 	{110, 5},
 };
+static arc arcs_44_9[1] = {
+	{111, 5},
+};
 static state states_44[10] = {
-	{8, arcs_44_0},
+	{7, arcs_44_0},
 	{2, arcs_44_1},
 	{2, arcs_44_2},
 	{2, arcs_44_3},
@@ -919,7 +927,7 @@ static state states_45[5] = {
 };
 static arc arcs_46_0[3] = {
 	{16, 1},
-	{105, 2},
+	{106, 2},
 	{116, 3},
 };
 static arc arcs_46_1[2] = {
@@ -939,7 +947,7 @@ static arc arcs_46_5[1] = {
 	{0, 5},
 };
 static arc arcs_46_6[1] = {
-	{106, 5},
+	{107, 5},
 };
 static state states_46[7] = {
 	{3, arcs_46_0},
@@ -1064,11 +1072,11 @@ static state states_51[8] = {
 };
 static dfa dfas[52] = {
 	{256, "single_input", 0, 3, states_0,
-	 "\004\030\001\000\250\360\057\040\007\020\000\000\106\112\047"},
+	 "\004\030\001\000\250\360\057\040\007\040\000\000\214\224\047"},
 	{257, "file_input", 0, 2, states_1,
-	 "\204\030\001\000\250\360\057\040\007\020\000\000\106\112\047"},
+	 "\204\030\001\000\250\360\057\040\007\040\000\000\214\224\047"},
 	{258, "eval_input", 0, 3, states_2,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\007"},
 	{259, "funcdef", 0, 6, states_3,
 	 "\000\010\000\000\000\000\000\000\000\000\000\000\000\000\000"},
 	{260, "parameters", 0, 4, states_4,
@@ -1080,13 +1088,13 @@ static dfa dfas[52] = {
 	{263, "fplist", 0, 3, states_7,
 	 "\000\020\001\000\000\000\000\000\000\000\000\000\000\000\000"},
 	{264, "stmt", 0, 2, states_8,
-	 "\000\030\001\000\250\360\057\040\007\020\000\000\106\112\047"},
+	 "\000\030\001\000\250\360\057\040\007\040\000\000\214\224\047"},
 	{265, "simple_stmt", 0, 4, states_9,
-	 "\000\020\001\000\250\360\057\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\250\360\057\000\000\040\000\000\214\224\007"},
 	{266, "small_stmt", 0, 2, states_10,
-	 "\000\020\001\000\250\360\057\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\250\360\057\000\000\040\000\000\214\224\007"},
 	{267, "expr_stmt", 0, 2, states_11,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\007"},
 	{268, "print_stmt", 0, 3, states_12,
 	 "\000\000\000\000\010\000\000\000\000\000\000\000\000\000\000"},
 	{269, "del_stmt", 0, 3, states_13,
@@ -1126,45 +1134,45 @@ static dfa dfas[52] = {
 	{286, "except_clause", 0, 5, states_30,
 	 "\000\000\000\000\000\000\000\000\040\000\000\000\000\000\000"},
 	{287, "suite", 0, 5, states_31,
-	 "\004\020\001\000\250\360\057\000\000\020\000\000\106\112\007"},
-	{288, "test", 0, 2, states_32,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\004\020\001\000\250\360\057\000\000\040\000\000\214\224\007"},
+	{288, "test", 0, 4, states_32,
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\007"},
 	{289, "and_test", 0, 2, states_33,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\003"},
 	{290, "not_test", 0, 3, states_34,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\003"},
 	{291, "comparison", 0, 2, states_35,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{292, "comp_op", 0, 4, states_36,
-	 "\000\000\000\000\000\000\200\000\000\220\177\000\000\000\000"},
+	 "\000\000\000\000\000\000\200\000\000\040\377\000\000\000\000"},
 	{293, "expr", 0, 2, states_37,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{294, "xor_expr", 0, 2, states_38,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{295, "and_expr", 0, 2, states_39,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{296, "shift_expr", 0, 2, states_40,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{297, "arith_expr", 0, 2, states_41,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{298, "term", 0, 2, states_42,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{299, "factor", 0, 4, states_43,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{300, "atom", 0, 10, states_44,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\000\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\000\224\003"},
 	{301, "lambdef", 0, 5, states_45,
 	 "\000\000\000\000\000\000\000\000\000\000\000\000\000\000\004"},
 	{302, "trailer", 0, 7, states_46,
-	 "\000\000\001\000\000\000\000\000\000\000\000\000\000\002\020"},
+	 "\000\000\001\000\000\000\000\000\000\000\000\000\000\004\020"},
 	{303, "subscript", 0, 4, states_47,
-	 "\000\120\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\120\001\000\000\000\000\000\000\040\000\000\214\224\007"},
 	{304, "exprlist", 0, 3, states_48,
-	 "\000\020\001\000\000\000\000\000\000\000\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\000\000\000\214\224\003"},
 	{305, "testlist", 0, 3, states_49,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\007"},
 	{306, "dictmaker", 0, 5, states_50,
-	 "\000\020\001\000\000\000\000\000\000\020\000\000\106\112\007"},
+	 "\000\020\001\000\000\000\000\000\000\040\000\000\214\224\007"},
 	{307, "classdef", 0, 8, states_51,
 	 "\000\000\000\000\000\000\000\000\000\000\000\000\000\000\040"},
 };
@@ -1243,6 +1251,7 @@ static label labels[118] = {
 	{6, 0},
 	{289, 0},
 	{1, "or"},
+	{301, 0},
 	{290, 0},
 	{1, "and"},
 	{1, "not"},
@@ -1280,7 +1289,6 @@ static label labels[118] = {
 	{306, 0},
 	{27, 0},
 	{25, 0},
-	{301, 0},
 	{2, 0},
 	{3, 0},
 	{1, "lambda"},