diff --git a/autotests/folding/highlight.lua.fold b/autotests/folding/highlight.lua.fold
--- a/autotests/folding/highlight.lua.fold
+++ b/autotests/folding/highlight.lua.fold
@@ -158,3 +158,14 @@
 --! \brief gfind is deprecated
 string.gfind('s')
 string.gmatch('f')
+
+<beginfold id='1'>function</beginfold id='1'> foo()
+  <beginfold id='1'>if</beginfold id='1'> x then
+    <beginfold id='1'>function</beginfold id='1'>() <endfold id='1'>end</endfold id='1'>
+    bar=<beginfold id='1'>function</beginfold id='1'>()
+      <beginfold id='1'>if</beginfold id='1'> y then
+        <beginfold id='1'>if</beginfold id='1'> z then <endfold id='1'>end</endfold id='1'>
+      <endfold id='1'>end</endfold id='1'>
+    <endfold id='1'>end</endfold id='1'>
+  <endfold id='1'>end</endfold id='1'>
+<endfold id='1'>end</endfold id='1'>
diff --git a/autotests/html/highlight.lua.html b/autotests/html/highlight.lua.html
--- a/autotests/html/highlight.lua.html
+++ b/autotests/html/highlight.lua.html
@@ -164,4 +164,15 @@
 <span style="color:#898887;">--! </span><span style="color:#ca60ca;font-weight:bold;">\brief</span><span style="color:#898887;"> gfind is deprecated</span>
 <span style="color:#bf0303;text-decoration:underline;">string.gfind</span>(<span style="color:#bf0303;">'s'</span>)
 <span style="color:#644a9b;">string.gmatch</span>(<span style="color:#bf0303;">'f'</span>)
+
+<span style="font-weight:bold;">function</span> foo()
+  <span style="color:#a1a100;">if</span> <span style="color:#5555ff;">x</span> <span style="color:#a1a100;">then</span>
+    <span style="font-weight:bold;">function</span>() <span style="font-weight:bold;">end</span>
+    <span style="color:#5555ff;">bar</span>=<span style="font-weight:bold;">function</span>()
+      <span style="color:#a1a100;">if</span> <span style="color:#5555ff;">y</span> <span style="color:#a1a100;">then</span>
+        <span style="color:#a1a100;">if</span> <span style="color:#5555ff;">z</span> <span style="color:#a1a100;">then</span> <span style="color:#a1a100;">end</span>
+      <span style="color:#a1a100;">end</span>
+    <span style="font-weight:bold;">end</span>
+  <span style="color:#a1a100;">end</span>
+<span style="font-weight:bold;">end</span>
 </pre></body></html>
diff --git a/autotests/input/highlight.lua b/autotests/input/highlight.lua
--- a/autotests/input/highlight.lua
+++ b/autotests/input/highlight.lua
@@ -158,3 +158,14 @@
 --! \brief gfind is deprecated
 string.gfind('s')
 string.gmatch('f')
+
+function foo()
+  if x then
+    function() end
+    bar=function()
+      if y then
+        if z then end
+      end
+    end
+  end
+end
diff --git a/autotests/reference/highlight.lua.ref b/autotests/reference/highlight.lua.ref
--- a/autotests/reference/highlight.lua.ref
+++ b/autotests/reference/highlight.lua.ref
@@ -158,3 +158,14 @@
 <Comment>--! </Comment><Tags>\brief</Tags><Comment> gfind is deprecated</Comment><br/>
 <Deprecated>string.gfind</Deprecated><Symbols>(</Symbols><Strings>'s'</Strings><Symbols>)</Symbols><br/>
 <BFunc>string.gmatch</BFunc><Symbols>(</Symbols><Strings>'f'</Strings><Symbols>)</Symbols><br/>
+<Normal Text></Normal Text><br/>
+<Keyword>function</Keyword><Normal Text> foo</Normal Text><Symbols>()</Symbols><br/>
+<Normal Text>  </Normal Text><Control>if</Control><Normal Text> </Normal Text><Variable>x</Variable><Normal Text> </Normal Text><Control>then</Control><br/>
+<Normal Text>    </Normal Text><Keyword>function</Keyword><Symbols>()</Symbols><Normal Text> </Normal Text><Keyword>end</Keyword><br/>
+<Normal Text>    </Normal Text><Variable>bar</Variable><Symbols>=</Symbols><Keyword>function</Keyword><Symbols>()</Symbols><br/>
+<Normal Text>      </Normal Text><Control>if</Control><Normal Text> </Normal Text><Variable>y</Variable><Normal Text> </Normal Text><Control>then</Control><br/>
+<Normal Text>        </Normal Text><Control>if</Control><Normal Text> </Normal Text><Variable>z</Variable><Normal Text> </Normal Text><Control>then</Control><Normal Text> </Normal Text><Control>end</Control><br/>
+<Normal Text>      </Normal Text><Control>end</Control><br/>
+<Normal Text>    </Normal Text><Keyword>end</Keyword><br/>
+<Normal Text>  </Normal Text><Control>end</Control><br/>
+<Keyword>end</Keyword><br/>
diff --git a/data/syntax/lua.xml b/data/syntax/lua.xml
--- a/data/syntax/lua.xml
+++ b/data/syntax/lua.xml
@@ -48,7 +48,7 @@
     - NOTE, FIXME, TODO alerts added on comments
     - improved highlighting
 -->
-<language name="Lua" version="6" indenter="lua" kateversion="5.0" section="Scripts" extensions="*.lua" mimetype="text/x-lua">
+<language name="Lua" version="7" indenter="lua" kateversion="5.0" section="Scripts" extensions="*.lua" mimetype="text/x-lua">
   <highlighting>
     <list name="keywords">
       <item>and</item>
@@ -79,6 +79,22 @@
       <item>while</item>
     </list>
 
+    <list name="startcontrol">
+      <item>do</item>
+      <item>if</item>
+      <item>repeat</item>
+    </list>
+
+    <list name="elsecontrol">
+      <item>else</item>
+      <item>elseif</item>
+    </list>
+
+    <list name="endcontrol">
+      <item>end</item>
+      <item>until</item>
+    </list>
+
     <list name="basevar">
       <item>_PROMPT</item>
       <item>_PROMPT2</item>
@@ -462,11 +478,7 @@
 
         <WordDetect   attribute="Keyword"  context="Function" beginRegion="chunk" String="function" />
         <keyword      attribute="Keyword"  context="#stay" String="keywords" />
-        <WordDetect   attribute="Control"  context="#stay" endRegion="chunk"   beginRegion="chunk" String="else" />
-        <WordDetect   attribute="Control"  context="#stay" endRegion="chunk"   beginRegion="chunk" String="elseif" />
-        <WordDetect   attribute="Control"  context="#stay" beginRegion="chunk" String="do" />
-        <WordDetect   attribute="Control"  context="#stay" beginRegion="chunk" String="if" />
-        <WordDetect   attribute="Control"  context="#stay" endRegion="chunk"   String="end" />
+        <keyword      attribute="Control"  context="StartControl" beginRegion="chunk" String="startcontrol" />
         <keyword      attribute="Control"  context="#stay" String="control" />
 
         <DetectChar   attribute="Symbols"  context="#stay" beginRegion="table" char="{" />
@@ -486,6 +498,12 @@
         <AnyChar      attribute="Symbols"  context="#stay" String=":[]().,=~+-*/%&amp;|^&gt;&lt;#;" />
       </context>
 
+      <context name="StartControl" attribute="Normal Text"  lineEndContext="#stay">
+        <keyword      attribute="Control"  context="#stay" endRegion="chunk"   beginRegion="chunk" String="elsecontrol" />
+        <keyword      attribute="Control"  context="#pop"  endRegion="chunk"   String="endcontrol" />
+        <IncludeRules context="Normal" />
+      </context>
+
       <context name="Function" attribute="Normal Text"      lineEndContext="#stay">
         <WordDetect   attribute="Keyword"  context="#pop"  endRegion="chunk"   String="end" />
         <IncludeRules context="Normal" />