diff --git a/src/compiler/compile/Component.ts b/src/compiler/compile/Component.ts
index b94b108f43..a3eeb981c2 100644
--- a/src/compiler/compile/Component.ts
+++ b/src/compiler/compile/Component.ts
@@ -24,10 +24,10 @@ import TemplateScope from './nodes/shared/TemplateScope';
 import fuzzymatch from '../utils/fuzzymatch';
 import get_object from './utils/get_object';
 import Slot from './nodes/Slot';
-import { Node, ImportDeclaration, Identifier, Program, ExpressionStatement, AssignmentExpression, Literal } from 'estree';
+import { Node, ImportDeclaration, Identifier, ExpressionStatement, AssignmentExpression, Literal, Property, RestElement } from 'estree';
 import add_to_set from './utils/add_to_set';
 import check_graph_for_cycles from './utils/check_graph_for_cycles';
-import { print, x, b } from 'code-red';
+import { print, b } from 'code-red';
 import { is_reserved_keyword } from './utils/reserved_keywords';
 import { apply_preprocessor_sourcemap } from '../utils/mapped_code';
 import Element from './nodes/Element';
@@ -935,7 +935,7 @@ export default class Component {
 		let scope = instance_scope;
 
 		walk(this.ast.instance.content, {
-			enter(node: Node, parent, key, index) {
+			enter(node: Node) {
 				if (/Function/.test(node.type)) {
 					return this.skip();
 				}
@@ -944,75 +944,130 @@ export default class Component {
 					scope = map.get(node);
 				}
 
+				if (node.type === 'ExportNamedDeclaration' && node.declaration) {
+					return this.replace(node.declaration);
+				}
+
 				if (node.type === 'VariableDeclaration') {
+					// NOTE: `var` does not follow block scoping
 					if (node.kind === 'var' || scope === instance_scope) {
-						node.declarations.forEach(declarator => {
-							if (declarator.id.type !== 'Identifier') {
-								const inserts = [];
-
-								extract_names(declarator.id).forEach(name => {
-									const variable = component.var_lookup.get(name);
-
-									if (variable.export_name) {
-										// TODO is this still true post-#3539?
-										return component.error(declarator as any, compiler_errors.destructured_prop);
+						const inserts = [];
+						const props = [];
+
+						function add_new_props(exported, local, default_value) {
+							props.push({
+								type: 'Property',
+								method: false,
+								shorthand: false,
+								computed: false,
+								kind: 'init',
+								key: exported,
+								value: default_value
+									? {
+										type: 'AssignmentPattern',
+										left: local,
+										right: default_value
 									}
+									: local
+							});
+						}
 
+						// transform
+						// ```
+						// export let { x, y = 123 } = OBJ, z = 456
+						// ```
+						// into
+						// ```
+						// let { x: x$, y: y$ = 123 } = OBJ;
+						// let { x = x$, y = y$, z = 456 } = $$props;
+						// ```
+						for (let index = 0; index < node.declarations.length; index++) {
+							const declarator = node.declarations[index];
+							if (declarator.id.type !== 'Identifier') {
+								function get_new_name(local) {
+									const variable = component.var_lookup.get(local.name);
 									if (variable.subscribable) {
 										inserts.push(get_insert(variable));
 									}
-								});
 
-								if (inserts.length) {
-									parent[key].splice(index + 1, 0, ...inserts);
+									if (variable.export_name && variable.writable) {
+										const alias_name = component.get_unique_name(local.name);
+										add_new_props({ type: 'Identifier', name: variable.export_name }, local, alias_name);
+										return alias_name;
+									}
+									return local;
 								}
 
-								return;
-							}
-
-							const { name } = declarator.id;
-							const variable = component.var_lookup.get(name);
+								function rename_identifiers(param: Node) {
+									switch (param.type) {
+										case 'ObjectPattern': {
+											const handle_prop = (prop: Property | RestElement) => {
+												if (prop.type === 'RestElement') {
+													rename_identifiers(prop);
+												} else if (prop.value.type === 'Identifier') {
+													prop.value = get_new_name(prop.value);
+												} else {
+													rename_identifiers(prop.value);
+												}
+											};
+								
+											param.properties.forEach(handle_prop);
+											break;
+										}
+										case 'ArrayPattern': {
+											const handle_element = (element: Node, index: number, array: Node[]) => {
+												if (element) {
+													if (element.type === 'Identifier') {
+														array[index] = get_new_name(element);
+													} else {
+														rename_identifiers(element);
+													}
+												}
+											};
+								
+											param.elements.forEach(handle_element);
+											break;
+										}
+								
+										case 'RestElement':
+											param.argument = get_new_name(param.argument);
+											break;
+								
+										case 'AssignmentPattern':
+											param.left = get_new_name(param.left);
+											break;
+									}
+								}
 
-							if (variable.export_name && variable.writable) {
-								declarator.id = {
-									type: 'ObjectPattern',
-									properties: [{
-										type: 'Property',
-										method: false,
-										shorthand: false,
-										computed: false,
-										kind: 'init',
-										key: { type: 'Identifier', name: variable.export_name },
-										value: declarator.init
-											? {
-												type: 'AssignmentPattern',
-												left: declarator.id,
-												right: declarator.init
-											}
-											: declarator.id
-									}]
-								};
-
-								declarator.init = x`$$props`;
+								rename_identifiers(declarator.id);
+							} else {
+								const { name } = declarator.id;
+								const variable = component.var_lookup.get(name);
+								const is_props = variable.export_name && variable.writable;
+								if (is_props) {
+									add_new_props({ type: 'Identifier', name: variable.export_name }, declarator.id, declarator.init);
+									node.declarations.splice(index--, 1);
+								}
+								if (variable.subscribable && (is_props || declarator.init)) {
+									inserts.push(get_insert(variable));
+								}
 							}
+						}
 
-							if (variable.subscribable && declarator.init) {
-								const insert = get_insert(variable);
-								parent[key].splice(index + 1, 0, ...insert);
-							}
-						});
+						this.replace(b`
+							${node.declarations.length ? node : null}
+							${ props.length > 0 && b`let { ${ props } } = $$props;`}
+							${inserts}
+						` as any);
+						return this.skip();
 					}
 				}
 			},
 
-			leave(node: Node, parent, _key, index) {
+			leave(node: Node) {
 				if (map.has(node)) {
 					scope = scope.parent;
 				}
-
-				if (node.type === 'ExportNamedDeclaration' && node.declaration) {
-					(parent as Program).body[index] = node.declaration;
-				}
 			}
 		});
 	}
diff --git a/src/compiler/compile/compiler_errors.ts b/src/compiler/compile/compiler_errors.ts
index 7ef06c0bbb..6f4f6e902c 100644
--- a/src/compiler/compile/compiler_errors.ts
+++ b/src/compiler/compile/compiler_errors.ts
@@ -190,10 +190,6 @@ export default {
 		code: 'illegal-global',
 		message: `${name} is an illegal variable name`
 	}),
-	destructured_prop: {
-		code: 'destructured-prop',
-		message: 'Cannot declare props in destructured declaration'
-	},
 	cyclical_reactive_declaration: (cycle: string[]) => ({
 		code: 'cyclical-reactive-declaration',
 		message: `Cyclical dependency detected: ${cycle.join(' → ')}`
diff --git a/test/runtime/samples/destructured-props-1/A.svelte b/test/runtime/samples/destructured-props-1/A.svelte
new file mode 100644
index 0000000000..d1b392ef34
--- /dev/null
+++ b/test/runtime/samples/destructured-props-1/A.svelte
@@ -0,0 +1,24 @@
+<script>
+  import { writable } from 'svelte/store';
+
+  const THING = { a: 1, b: { c: 2, d: [3, 4, writable(5)] }, e: [6], h: 8 };
+  const default_g = 9;
+
+  export let { a, b: { c, d: [d_one,,d_three], f }, e: [e_one], g = default_g } = THING;
+  export const { a: A, b: { c: C } } = THING;
+</script>
+
+<div>
+a: {a},
+b: {typeof b},
+c: {c},
+d_one: {d_one},
+d_three: {$d_three},
+f: {f},
+g: {g},
+e: {typeof e},
+e_one: {e_one},
+A: {A},
+C: {C}
+</div>
+<div>{JSON.stringify(THING)}</div>
\ No newline at end of file
diff --git a/test/runtime/samples/destructured-props-1/_config.js b/test/runtime/samples/destructured-props-1/_config.js
new file mode 100644
index 0000000000..29feaaabab
--- /dev/null
+++ b/test/runtime/samples/destructured-props-1/_config.js
@@ -0,0 +1,9 @@
+export default {
+	html: `
+		<div>a: 1, b: undefined, c: 2, d_one: 3, d_three: 5, f: undefined, g: 9, e: undefined, e_one: 6, A: 1, C: 2</div>
+		<div>{"a":1,"b":{"c":2,"d":[3,4,{}]},"e":[6],"h":8}</div>
+		<br>
+		<div>a: a, b: undefined, c: 2, d_one: d_one, d_three: 5, f: f, g: g, e: undefined, e_one: 6, A: 1, C: 2</div>
+		<div>{"a":1,"b":{"c":2,"d":[3,4,{}]},"e":[6],"h":8}</div>
+	`
+};
diff --git a/test/runtime/samples/destructured-props-1/main.svelte b/test/runtime/samples/destructured-props-1/main.svelte
new file mode 100644
index 0000000000..dbe7c88d33
--- /dev/null
+++ b/test/runtime/samples/destructured-props-1/main.svelte
@@ -0,0 +1,7 @@
+<script>
+	import A from './A.svelte';
+</script>
+
+<A />
+<br />
+<A a="a" d_one="d_one" list_one="list_one" f="f" list_two_b="list_two_b" g="g" A="A" C="C" />
diff --git a/test/runtime/samples/destructured-props-2/A.svelte b/test/runtime/samples/destructured-props-2/A.svelte
new file mode 100644
index 0000000000..51167edbc4
--- /dev/null
+++ b/test/runtime/samples/destructured-props-2/A.svelte
@@ -0,0 +1,21 @@
+<script>
+  import { writable } from 'svelte/store';
+
+  let default_b = 5;
+  const LIST = [1, { a: 2 }, [3, writable(4)]];
+  export const [x, { a: list_two_a, b: list_two_b = default_b }, [, y]] = LIST;
+  export let [m, { a: n, b: o = default_b }, [p, q]] = LIST;
+</script>
+
+<div>
+  x: {x},
+  list_two_a: {list_two_a},
+  list_two_b: {list_two_b},
+  y: {$y},
+  m: {m},
+  n: {n},
+  o: {o},
+  p: {p},
+  q: {$q}
+</div>
+<div>{JSON.stringify(LIST)}</div>
\ No newline at end of file
diff --git a/test/runtime/samples/destructured-props-2/_config.js b/test/runtime/samples/destructured-props-2/_config.js
new file mode 100644
index 0000000000..c647f31be1
--- /dev/null
+++ b/test/runtime/samples/destructured-props-2/_config.js
@@ -0,0 +1,19 @@
+export default {
+	html: `
+		<div>x: 1, list_two_a: 2, list_two_b: 5, y: 4, m: 1, n: 2, o: 5, p: 3, q: 4</div>
+		<div>[1,{"a":2},[3,{}]]</div>
+		<br><div>x: 1, list_two_a: 2, list_two_b: 5, y: 4, m: m, n: n, o: o, p: p, q: q</div>
+		<div>[1,{"a":2},[3,{}]]</div>
+	`,
+
+	async test({ component, assert, target }) {
+		await component.update();
+
+		assert.htmlEqual(target.innerHTML, `
+			<div>x: 1, list_two_a: 2, list_two_b: 5, y: 4, m: 1, n: 2, o: 5, p: 3, q: 4</div>
+			<div>[1,{"a":2},[3,{}]]</div>
+			<br><div>x: 1, list_two_a: 2, list_two_b: 5, y: 4, m: MM, n: NN, o: OO, p: PP, q: QQ</div>
+			<div>[1,{"a":2},[3,{}]]</div>
+		`);
+	}
+};
diff --git a/test/runtime/samples/destructured-props-2/main.svelte b/test/runtime/samples/destructured-props-2/main.svelte
new file mode 100644
index 0000000000..f0044bb567
--- /dev/null
+++ b/test/runtime/samples/destructured-props-2/main.svelte
@@ -0,0 +1,30 @@
+<script>
+	import A from './A.svelte';
+	import { writable } from 'svelte/store';
+
+	let x = 'x',
+		list_two_a = 'list_two_a',
+		list_two_b = 'list_two_b',
+		y = writable('y'),
+		m = 'm',
+		n = 'n',
+		o = 'o',
+		p = 'p',
+		q = writable('q');
+
+	export function update() {
+		x = 'XX';
+		list_two_a = 'LIST_TWO_A';
+		list_two_b = 'LIST_TWO_B';
+		y = writable('YY');
+		m = 'MM';
+		n = 'NN';
+		o = 'OO';
+		p = 'PP';
+		q = writable('QQ');
+	}
+</script>
+
+<A />
+<br />
+<A {x} {list_two_a} {list_two_b} {y} {m} {n} {o} {p} {q} />
diff --git a/test/runtime/samples/destructured-props-3/A.svelte b/test/runtime/samples/destructured-props-3/A.svelte
new file mode 100644
index 0000000000..6c5aca05b0
--- /dev/null
+++ b/test/runtime/samples/destructured-props-3/A.svelte
@@ -0,0 +1,10 @@
+<script>
+  import { writable } from 'svelte/store';
+
+  const { i, j, k } = { i: 9, j: 10, k: writable(11) }, l = 12, m = 13, n = writable(14);
+  let { a, b, c } = { a: 9, b: 10, c: writable(11) }, d = 12, e = 13, f = writable(14);
+
+  export { i, k, l, n, a, c, d, f };
+</script>
+
+<div>i: {i}, j: {j}, k: {$k}, l: {l}, m: {m}, n: {$n}, a: {a}, b: {b}, c: {$c}, d: {d}, e: {e}, f: {$f}</div>
\ No newline at end of file
diff --git a/test/runtime/samples/destructured-props-3/_config.js b/test/runtime/samples/destructured-props-3/_config.js
new file mode 100644
index 0000000000..6d2e516e0e
--- /dev/null
+++ b/test/runtime/samples/destructured-props-3/_config.js
@@ -0,0 +1,15 @@
+export default {
+	html: `
+		<div>i: 9, j: 10, k: 11, l: 12, m: 13, n: 14, a: 9, b: 10, c: 11, d: 12, e: 13, f: 14</div>
+		<br>
+		<div>i: 9, j: 10, k: 11, l: 12, m: 13, n: 14, a: a, b: 10, c: c, d: d, e: 13, f: f</div>
+	`,
+	async test({ component, target, assert }) {
+		await component.update();
+		assert.htmlEqual(target.innerHTML, `
+			<div>i: 9, j: 10, k: 11, l: 12, m: 13, n: 14, a: 9, b: 10, c: 11, d: 12, e: 13, f: 14</div>
+			<br>
+			<div>i: 9, j: 10, k: 11, l: 12, m: 13, n: 14, a: aa, b: 10, c: cc, d: dd, e: 13, f: ff</div>
+		`);
+	}
+};
diff --git a/test/runtime/samples/destructured-props-3/main.svelte b/test/runtime/samples/destructured-props-3/main.svelte
new file mode 100644
index 0000000000..8152d61aab
--- /dev/null
+++ b/test/runtime/samples/destructured-props-3/main.svelte
@@ -0,0 +1,29 @@
+<script>
+	import A from './A.svelte';
+	import { writable } from 'svelte/store';
+
+	let i = 'i',
+		k = writable('k'),
+		l = 'l',
+		n = writable('n'),
+		a = 'a',
+		c = writable('c'),
+		d = 'd',
+		f = writable('f');
+
+	export function update() {
+		i = 'ii';
+		k = writable('kk');
+		l = 'll';
+		n = writable('nn');
+		a = 'aa';
+		c = writable('cc');
+		d = 'dd';
+		f = writable('ff');
+	}
+
+</script>
+
+<A />
+<br />
+<A {i} {k} {l} {n} {a} {c} {d} {f} />