diff --git a/autotests/folding/Makefile.fold b/autotests/folding/Makefile.fold
--- a/autotests/folding/Makefile.fold
+++ b/autotests/folding/Makefile.fold
@@ -26,3 +26,11 @@
 	$(CC) bla.o $< \
 	    -o bla.exe
 	@echo "hello"
+
+# String Substitution
+VAR := $(ANOTHER_VAR:%=%+1)
+
+rempl := x
+foo := a b c
+bar := foo
+hello := $($(bar):a=$(rempl))
diff --git a/autotests/html/Makefile.html b/autotests/html/Makefile.html
--- a/autotests/html/Makefile.html
+++ b/autotests/html/Makefile.html
@@ -32,4 +32,12 @@
 	<span style="color:#924c9d;">$(</span><span style="color:#0057ae;">CC</span><span style="color:#924c9d;">)</span> bla.o <span style="color:#924c9d;">$&lt;</span> <span style="color:#924c9d;">\</span>
 	    <span style="color:#924c9d;">-</span><span style="color:#644a9b;">o bla.exe</span>
 	<span style="color:#924c9d;">@</span><span style="color:#644a9b;">echo </span><span style="color:#bf0303;">&quot;hello&quot;</span>
+
+<span style="color:#898887;"># String Substitution</span>
+<span style="color:#0057ae;">VAR </span><span style="color:#924c9d;">:=</span><span style="color:#bf0303;"> </span><span style="color:#924c9d;">$(</span><span style="color:#0057ae;">ANOTHER_VAR</span><span style="font-weight:bold;">:</span><span style="color:#ff5500;">%</span><span style="font-weight:bold;">=</span><span style="color:#ff5500;">%+1</span><span style="color:#924c9d;">)</span>
+
+<span style="color:#0057ae;">rempl </span><span style="color:#924c9d;">:=</span><span style="color:#bf0303;"> x</span>
+<span style="color:#0057ae;">foo </span><span style="color:#924c9d;">:=</span><span style="color:#bf0303;"> a b c</span>
+<span style="color:#0057ae;">bar </span><span style="color:#924c9d;">:=</span><span style="color:#bf0303;"> foo</span>
+<span style="color:#0057ae;">hello </span><span style="color:#924c9d;">:=</span><span style="color:#bf0303;"> </span><span style="color:#924c9d;">$($(</span><span style="color:#0057ae;">bar</span><span style="color:#924c9d;">)</span><span style="font-weight:bold;">:</span><span style="color:#ff5500;">a</span><span style="font-weight:bold;">=</span><span style="color:#924c9d;">$(</span><span style="color:#0057ae;">rempl</span><span style="color:#924c9d;">))</span>
 </pre></body></html>
diff --git a/autotests/input/Makefile b/autotests/input/Makefile
--- a/autotests/input/Makefile
+++ b/autotests/input/Makefile
@@ -26,3 +26,11 @@
 	$(CC) bla.o $< \
 	    -o bla.exe
 	@echo "hello"
+
+# String Substitution
+VAR := $(ANOTHER_VAR:%=%+1)
+
+rempl := x
+foo := a b c
+bar := foo
+hello := $($(bar):a=$(rempl))
diff --git a/autotests/reference/Makefile.ref b/autotests/reference/Makefile.ref
--- a/autotests/reference/Makefile.ref
+++ b/autotests/reference/Makefile.ref
@@ -26,3 +26,11 @@
 <Normal>	</Normal><Operator>$(</Operator><Variable>CC</Variable><Operator>)</Operator><Normal> bla.o </Normal><Operator>$<</Operator><Normal> </Normal><Operator>\</Operator><br/>
 <Normal>	    </Normal><Operator>-</Operator><Silent>o bla.exe</Silent><br/>
 <Normal>	</Normal><Operator>@</Operator><Silent>echo </Silent><String>"hello"</String><br/>
+<Normal></Normal><br/>
+<Comment># String Substitution</Comment><br/>
+<Variable>VAR </Variable><Operator>:=</Operator><String> </String><Operator>$(</Operator><Variable>ANOTHER_VAR</Variable><RealOperator>:</RealOperator><VarModifier>%</VarModifier><RealOperator>=</RealOperator><VarModifier>%+1</VarModifier><Operator>)</Operator><br/>
+<Normal></Normal><br/>
+<Variable>rempl </Variable><Operator>:=</Operator><String> x</String><br/>
+<Variable>foo </Variable><Operator>:=</Operator><String> a b c</String><br/>
+<Variable>bar </Variable><Operator>:=</Operator><String> foo</String><br/>
+<Variable>hello </Variable><Operator>:=</Operator><String> </String><Operator>$($(</Operator><Variable>bar</Variable><Operator>)</Operator><RealOperator>:</RealOperator><VarModifier>a</VarModifier><RealOperator>=</RealOperator><Operator>$(</Operator><Variable>rempl</Variable><Operator>))</Operator><br/>
diff --git a/data/syntax/makefile.xml b/data/syntax/makefile.xml
--- a/data/syntax/makefile.xml
+++ b/data/syntax/makefile.xml
@@ -10,7 +10,7 @@
 <!-- v4 by Alex Richardson <arichardson.kde@gmail.com>
      added bmake support -->
 <language name="Makefile" section="Other"
-          version="7" kateversion="3.4"
+          version="8" kateversion="3.4"
           extensions="GNUmakefile;Makefile;makefile;GNUmakefile.*;Makefile.*;makefile.*;*.mk"
           mimetype="text/x-makefile" priority="11"
           author="Per Wigren (wigren@home.se)" license="">
@@ -341,7 +341,8 @@
         <DetectChar attribute="Operator" char=")" context="#pop#pop#pop"/>
         <DetectChar attribute="Operator" context="dollar" char="$"/>
         <DetectSpaces attribute="Error" context="#stay"/>
-        <AnyChar attribute="Error" context="#stay" String="=#:"/>
+        <DetectChar attribute="RealOperator" context="SubstitutionRefs" char=":"/>
+        <AnyChar attribute="Error" context="#stay" String="=#"/>
       </context>
 
       <context name="callVar{" attribute="Variable" lineEndContext="#stay">
@@ -456,6 +457,16 @@
         <DetectChar attribute="String" context="string'" char="'"/>
       </context>
 
+      <!-- $(var:pattern=replacement) -->
+      <context name="SubstitutionRefs" attribute="VarModifier" lineEndContext="#stay">
+        <DetectChar attribute="RealOperator" context="#pop!SubstitutionRefsReplacement" char="="/>
+        <IncludeRules context="SubstitutionRefsReplacement"/>
+      </context>
+      <context name="SubstitutionRefsReplacement" attribute="VarModifier" lineEndContext="#stay">
+        <DetectChar attribute="Operator" char=")" context="#pop#pop#pop#pop"/>
+        <DetectChar attribute="Operator" context="dollar" char="$"/>
+      </context>
+
       <context attribute="Comment" lineEndContext="#pop" name="Comment">
         <LineContinue attribute="Comment" context="#stay" />
         <IncludeRules context="##Alerts" />