diff --git a/decoder_test.go b/decoder_test.go
index 1a8abcf..75980ff 100644
--- a/decoder_test.go
+++ b/decoder_test.go
@@ -18,6 +18,7 @@ func TestDecode_interface(t *testing.T) {
 			false,
 			map[string]interface{}{
 				"foo": "bar",
+				"bar": "${file(\"bing/bong.txt\")}",
 			},
 		},
 		{
diff --git a/hcl/lex.go b/hcl/lex.go
index 4d4154d..ba1d6f7 100644
--- a/hcl/lex.go
+++ b/hcl/lex.go
@@ -224,6 +224,8 @@ func (x *hclLex) lexNumber(yylval *hclSymType) int {
 
 // lexString extracts a string from the input
 func (x *hclLex) lexString(yylval *hclSymType) int {
+	braces := 0
+
 	var b bytes.Buffer
 	for {
 		c := x.next()
@@ -232,10 +234,25 @@ func (x *hclLex) lexString(yylval *hclSymType) int {
 		}
 
 		// String end
-		if c == '"' {
+		if c == '"' && braces == 0 {
 			break
 		}
 
+		// If we're starting into variable, mark it
+		if braces == 0 && c == '$' && x.peek() == '{' {
+			braces += 1
+
+			if _, err := b.WriteRune(c); err != nil {
+				return lexEOF
+			}
+			c = x.next()
+		} else if braces > 0 && c == '{' {
+			braces += 1
+		}
+		if braces > 0 && c == '}' {
+			braces -= 1
+		}
+
 		if _, err := b.WriteRune(c); err != nil {
 			return lexEOF
 		}
diff --git a/json/lex.go b/json/lex.go
index 3ddce6f..0601ec1 100644
--- a/json/lex.go
+++ b/json/lex.go
@@ -125,6 +125,11 @@ func (x *jsonLex) lexString(yylval *jsonSymType) int {
 			break
 		}
 
+		// If we're escaping a quote, then escape the quote
+		if c == '\\' && x.peek() == '"' {
+			c = x.next()
+		}
+
 		if _, err := b.WriteRune(c); err != nil {
 			return lexEOF
 		}
diff --git a/test-fixtures/basic.hcl b/test-fixtures/basic.hcl
index 05c8891..9499944 100644
--- a/test-fixtures/basic.hcl
+++ b/test-fixtures/basic.hcl
@@ -1 +1,2 @@
 foo = "bar"
+bar = "${file("bing/bong.txt")}"
diff --git a/test-fixtures/basic.json b/test-fixtures/basic.json
index b54bde9..7bdddc8 100644
--- a/test-fixtures/basic.json
+++ b/test-fixtures/basic.json
@@ -1,3 +1,4 @@
 {
-	"foo": "bar"
+	"foo": "bar",
+    "bar": "${file(\"bing/bong.txt\")}"
 }