diff --git a/src/Compiler.php b/src/Compiler.php
index 16ed3bf8..f02a4b7e 100644
--- a/src/Compiler.php
+++ b/src/Compiler.php
@@ -1272,6 +1272,7 @@ protected function compileChild($child, $out)
 
                 if (isset($content)) {
                     $content->scope = $callingScope;
+
                     $this->setRaw(self::$namespaces['special'] . 'content', $content);
                 }
 
@@ -1279,6 +1280,8 @@ protected function compileChild($child, $out)
                     $this->applyArguments($mixin->args, $argValues);
                 }
 
+                $this->env->marker = 'mixin';
+
                 foreach ($mixin->children as $child) {
                     $this->compileChild($child, $out);
                 }
@@ -2433,11 +2436,18 @@ protected function setExisting($name, $value, $env = null)
 
         $storeEnv = $env;
 
+        $hasNamespace = $name[0] === '^' || $name[0] === '@' || $name[0] === '%';
+
         for (;;) {
             if (array_key_exists($name, $env->store)) {
                 break;
             }
 
+            if (! $hasNamespace && isset($env->marker)) {
+                $env = $storeEnv;
+                break;
+            }
+
             if (! isset($env->parent)) {
                 $env = $storeEnv;
                 break;
@@ -2491,6 +2501,11 @@ public function get($name, $shouldThrow = true, $env = null)
                 return $env->store[$name];
             }
 
+            if (! $hasNamespace && isset($env->marker)) {
+                $env = $this->rootEnv;
+                continue;
+            }
+
             if (! isset($env->parent)) {
                 break;
             }
@@ -2499,7 +2514,7 @@ public function get($name, $shouldThrow = true, $env = null)
         }
 
         if ($shouldThrow) {
-            $this->throwError('undefined variable $' . $name);
+            $this->throwError("Undefined variable \$$name");
         }
 
         // found nothing
diff --git a/tests/ExceptionTest.php b/tests/ExceptionTest.php
index 50255f40..12ec165f 100644
--- a/tests/ExceptionTest.php
+++ b/tests/ExceptionTest.php
@@ -103,6 +103,32 @@ public function provideScss()
                 ,
                 'expecting color'
             ),
+            array(<<<'END_OF_SCSS'
+BODY {
+    DIV {
+        $bg: red;
+    }
+
+    background: $bg;
+}
+END_OF_SCSS
+                ,
+                'Undefined variable $bg'
+            ),
+            array(<<<'END_OF_SCSS'
+@mixin example {
+    background: $bg;
+}
+
+P {
+    $bg: red;
+
+    @include example;
+}
+END_OF_SCSS
+                ,
+                'Undefined variable $bg'
+            ),
         );
     }
 
diff --git a/tests/FailingTest.php b/tests/FailingTest.php
index cf4677d3..f6ec0ffc 100644
--- a/tests/FailingTest.php
+++ b/tests/FailingTest.php
@@ -153,23 +153,6 @@ public function provideFailing()
     transform: scale(0.5); }
   to {
     transform: scale(1); } }
-END_OF_EXPECTED
-            ),
-            array(
-                '#295 - variable scope bug', <<<'END_OF_SCSS'
-@mixin example {
-    $color: red;
-}
-
-A {
-    $color: green;
-    @include example;
-    color: $color;
-}
-END_OF_SCSS
-                , <<<END_OF_EXPECTED
-A {
-  color: green; }
 END_OF_EXPECTED
             ),
 /*************************************************************
diff --git a/tests/inputs/variables.scss b/tests/inputs/variables.scss
index 51e15160..367416fc 100644
--- a/tests/inputs/variables.scss
+++ b/tests/inputs/variables.scss
@@ -63,3 +63,13 @@ body {
 #sidebar {
   width: $width;
 }
+
+@mixin example {
+    $color: red;
+}
+
+A {
+    $color: green;
+    @include example;
+    color: $color;
+}
diff --git a/tests/outputs/variables.css b/tests/outputs/variables.css
index 94f1015a..693ee6ef 100644
--- a/tests/outputs/variables.css
+++ b/tests/outputs/variables.css
@@ -28,3 +28,6 @@ body {
 
 #sidebar {
   width: 5em; }
+
+A {
+  color: green; }
diff --git a/tests/outputs_numbered/variables.css b/tests/outputs_numbered/variables.css
index 5aae49d1..f341c52f 100644
--- a/tests/outputs_numbered/variables.css
+++ b/tests/outputs_numbered/variables.css
@@ -31,3 +31,6 @@ body {
 /* line 63, inputs/variables.scss */
 #sidebar {
   width: 5em; }
+/* line 71, inputs/variables.scss */
+A {
+  color: green; }