diff --git a/src/cmd/gc/lex.c b/src/cmd/gc/lex.c
index 21ac779a9f..6845a8ecd6 100644
--- a/src/cmd/gc/lex.c
+++ b/src/cmd/gc/lex.c
@@ -218,6 +218,7 @@ main(int argc, char *argv[])
 		curio.nlsemi = 0;
 
 		block = 1;
+		iota = -1000000;
 
 		yyparse();
 		if(nsyntaxerrors != 0)
diff --git a/test/fixedbugs/bug362.go b/test/fixedbugs/bug362.go
new file mode 100644
index 0000000000..7912091030
--- /dev/null
+++ b/test/fixedbugs/bug362.go
@@ -0,0 +1,16 @@
+// errchk $G $D/$F.go
+
+// Copyright 2011 The Go Authors.  All rights reserved.
+// Use of this source code is governed by a BSD-style
+// license that can be found in the LICENSE file.
+
+// issue 1662
+// iota inside var
+
+package main
+
+var (
+	a = iota  // ERROR "undefined: iota"
+	b = iota  // ERROR "undefined: iota"
+	c = iota  // ERROR "undefined: iota"
+)