diff --git a/src/compile/Component.ts b/src/compile/Component.ts
index 1b843e9ca2..8589ef6af7 100644
--- a/src/compile/Component.ts
+++ b/src/compile/Component.ts
@@ -119,16 +119,15 @@ export default class Component {
 		this.componentOptions = process_component_options(this, this.ast.html.children);
 		this.namespace = namespaces[this.componentOptions.namespace] || this.componentOptions.namespace;
 
-		if (compileOptions.customElement === true && !this.componentOptions.tag) {
-			throw new Error(`No tag name specified`); // TODO better error
+		if (compileOptions.customElement) {
+			this.tag = compileOptions.customElement.tag || this.componentOptions.tag;
+			if (!this.tag) {
+				throw new Error(`Cannot compile to a custom element without specifying a tag name via options.customElement or <svelte:options>`);
+			}
+		} else {
+			this.tag = this.name;
 		}
 
-		this.tag = compileOptions.customElement
-			? compileOptions.customElement === true
-				? this.componentOptions.tag
-				: compileOptions.customElement as string
-			: this.name;
-
 		this.walk_module_js();
 		this.walk_instance_js_pre_template();
 
diff --git a/src/compile/index.ts b/src/compile/index.ts
index 704d5bd706..ae9d554035 100644
--- a/src/compile/index.ts
+++ b/src/compile/index.ts
@@ -3,7 +3,7 @@ import Stats from '../Stats';
 import parse from '../parse/index';
 import renderDOM from './render-dom/index';
 import renderSSR from './render-ssr/index';
-import { CompileOptions, Ast, Warning } from '../interfaces';
+import { CompileOptions, Ast, Warning, CustomElementOptions } from '../interfaces';
 import Component from './Component';
 import fuzzymatch from '../utils/fuzzymatch';
 
@@ -41,6 +41,10 @@ function validate_options(options: CompileOptions, warnings: Warning[]) {
 		throw new Error(`options.name must be a valid identifier (got '${name}')`);
 	}
 
+	if ('customElement' in options) {
+		options.customElement = normalize_customElement_option(options.customElement);
+	}
+
 	if (name && /^[a-z]/.test(name)) {
 		const message = `options.name should be capitalised`;
 		warnings.push({
@@ -52,6 +56,34 @@ function validate_options(options: CompileOptions, warnings: Warning[]) {
 	}
 }
 
+const valid_customElement_options = ['tag'];
+
+function normalize_customElement_option(customElement: boolean | string | CustomElementOptions) {
+	if (typeof customElement === 'boolean') {
+		return customElement ? {} : null;
+	} else if (typeof customElement === 'string') {
+		customElement = { tag: customElement };
+	} else if (typeof customElement === 'object') {
+		Object.keys(customElement).forEach(key => {
+			if (valid_customElement_options.indexOf(key) === -1) {
+				const match = fuzzymatch(key, valid_customElement_options);
+				let message = `Unrecognized option 'customElement.${key}'`;
+				if (match) message += ` (did you mean 'customElement.${match}'?)`;
+
+				throw new Error(message);
+			}
+		});
+	} else {
+		throw new Error(`options.customElement must be a boolean, a string or an object`);
+	}
+
+	if ('tag' in customElement && !/^[a-zA-Z][a-zA-Z0-9]*-[a-zA-Z0-9-]+$/.test(customElement.tag)) {
+		throw new Error(`options.customElement tag name must be two or more words joined by the '-' character`);
+	}
+
+	return customElement;
+}
+
 function get_name(filename) {
 	if (!filename) return null;
 	const parts = filename.split(/[\/\\]/);
diff --git a/src/interfaces.ts b/src/interfaces.ts
index 4ec258c94a..fc2e6b260e 100644
--- a/src/interfaces.ts
+++ b/src/interfaces.ts
@@ -52,7 +52,7 @@ export interface CompileOptions {
 	immutable?: boolean;
 	hydratable?: boolean;
 	legacy?: boolean;
-	customElement?: CustomElementOptions | true;
+	customElement?: CustomElementOptions;
 	css?: boolean;
 
 	preserveComments?: boolean | false;
@@ -65,7 +65,6 @@ export interface Visitor {
 
 export interface CustomElementOptions {
 	tag?: string;
-	props?: string[];
 }
 
 export interface AppendTarget {
diff --git a/src/parse/index.ts b/src/parse/index.ts
index 4b1e0a225c..1618ee5e6e 100644
--- a/src/parse/index.ts
+++ b/src/parse/index.ts
@@ -9,7 +9,7 @@ import error from '../utils/error';
 interface ParserOptions {
 	filename?: string;
 	bind?: boolean;
-	customElement?: CustomElementOptions | true;
+	customElement?: CustomElementOptions;
 }
 
 type ParserState = (parser: Parser) => (ParserState | void);
@@ -17,7 +17,7 @@ type ParserState = (parser: Parser) => (ParserState | void);
 export class Parser {
 	readonly template: string;
 	readonly filename?: string;
-	readonly customElement: CustomElementOptions | true;
+	readonly customElement: CustomElementOptions;
 
 	index = 0;
 	stack: Array<Node> = [];