diff --git a/CHANGELOG.md b/CHANGELOG.md
index c8495ee01..103feafc6 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -40,6 +40,7 @@ BUG FIXES:
   * core: Fix issue where some JSON structures didn't map properly into
      Terraform structures. [GH-177]
   * core: Resources with only `file()` calls will interpolate. [GH-159]
+  * core: Variables work in block names. [GH-234]
   * command/apply: "tfvars" file no longer interferes with plan apply. [GH-153]
   * providers/aws: Fix issues around failing to read EIPs. [GH-122]
   * providers/aws: Autoscaling groups now register and export load
diff --git a/config/interpolate_walk.go b/config/interpolate_walk.go
index adc656b75..b91c48c37 100644
--- a/config/interpolate_walk.go
+++ b/config/interpolate_walk.go
@@ -21,6 +21,7 @@ type interpolationWalker struct {
 	Replace bool
 
 	key         []string
+	lastValue   reflect.Value
 	loc         reflectwalk.Location
 	cs          []reflect.Value
 	csData      interface{}
@@ -61,6 +62,7 @@ func (w *interpolationWalker) Map(m reflect.Value) error {
 func (w *interpolationWalker) MapElem(m, k, v reflect.Value) error {
 	w.csData = k
 	w.key = append(w.key, k.String())
+	w.lastValue = v
 	return nil
 }
 
@@ -123,13 +125,26 @@ func (w *interpolationWalker) Primitive(v reflect.Value) error {
 
 	if w.Replace {
 		resultVal := reflect.ValueOf(result)
-		if w.loc == reflectwalk.MapValue {
+		switch w.loc {
+		case reflectwalk.MapKey:
+			m := w.cs[len(w.cs)-1]
+
+			// Delete the old value
+			var zero reflect.Value
+			m.SetMapIndex(w.csData.(reflect.Value), zero)
+
+			// Set the new key with the existing value
+			m.SetMapIndex(resultVal, w.lastValue)
+
+			// Set the key to be the new key
+			w.csData = resultVal
+		case reflectwalk.MapValue:
 			// If we're in a map, then the only way to set a map value is
 			// to set it directly.
 			m := w.cs[len(w.cs)-1]
 			mk := w.csData.(reflect.Value)
 			m.SetMapIndex(mk, resultVal)
-		} else {
+		default:
 			// Otherwise, we should be addressable
 			setV.Set(resultVal)
 		}
diff --git a/config/interpolate_walk_test.go b/config/interpolate_walk_test.go
index 53c1659d5..5b5c98488 100644
--- a/config/interpolate_walk_test.go
+++ b/config/interpolate_walk_test.go
@@ -154,6 +154,19 @@ func TestInterpolationWalker_replace(t *testing.T) {
 				"foo": "hello, bar",
 			},
 		},
+
+		{
+			Input: map[string]interface{}{
+				"foo": map[string]interface{}{
+					"${var.foo}": "bar",
+				},
+			},
+			Output: map[string]interface{}{
+				"foo": map[string]interface{}{
+					"bar": "bar",
+				},
+			},
+		},
 	}
 
 	for i, tc := range cases {