diff --git a/Changes b/Changes
index 61742c76f..74722c4d0 100644
--- a/Changes
+++ b/Changes
@@ -5,6 +5,8 @@ The contributors that suggested a given feature are shown in []. Thanks!
 
 * Verilator 3.901 devel
 
+****  Fix 2009 localparam syntax, msg2139. [Galen Seitz]
+
 
 * Verilator 3.900 2017-01-15
 
diff --git a/src/verilog.y b/src/verilog.y
index 57923083c..a7750a909 100644
--- a/src/verilog.y
+++ b/src/verilog.y
@@ -1155,10 +1155,14 @@ parameter_declarationFront:	// IEEE: parameter_declaration w/o assignment
 
 parameter_port_declarationFrontE: // IEEE: parameter_port_declaration w/o assignment
 	//			// IEEE: parameter_declaration (minus assignment)
+	//			// IEEE: local_parameter_declaration (minus assignment)
 	//			// Front must execute first so VARDTYPE is ready before list of vars
 		varGParamReset implicit_typeE 		{ /*VARRESET-in-varGParam*/ VARDTYPE($2); }
 	|	varGParamReset data_type		{ /*VARRESET-in-varGParam*/ VARDTYPE($2); }
 	|	varGParamReset yTYPE			{ /*VARRESET-in-varGParam*/ VARDTYPE(new AstParseTypeDType($2)); }
+	|	varLParamReset implicit_typeE 		{ /*VARRESET-in-varLParam*/ VARDTYPE($2); }
+	|	varLParamReset data_type		{ /*VARRESET-in-varLParam*/ VARDTYPE($2); }
+	|	varLParamReset yTYPE			{ /*VARRESET-in-varLParam*/ VARDTYPE(new AstParseTypeDType($2)); }
 	|	implicit_typeE 				{ /*VARRESET-in-varGParam*/ VARDTYPE($1); }
 	|	data_type				{ /*VARRESET-in-varGParam*/ VARDTYPE($1); }
 	|	yTYPE					{ /*VARRESET-in-varGParam*/ VARDTYPE(new AstParseTypeDType($1)); }
diff --git a/test_regress/t/t_param_local.pl b/test_regress/t/t_param_local.pl
new file mode 100755
index 000000000..f91289753
--- /dev/null
+++ b/test_regress/t/t_param_local.pl
@@ -0,0 +1,18 @@
+#!/usr/bin/perl
+if (!$::Driver) { use FindBin; exec("$FindBin::Bin/bootstrap.pl", @ARGV, $0); die; }
+# DESCRIPTION: Verilator: Verilog Test driver/expect definition
+#
+# Copyright 2003 by Wilson Snyder. This program is free software; you can
+# redistribute it and/or modify it under the terms of either the GNU
+# Lesser General Public License Version 3 or the Perl Artistic License
+# Version 2.0.
+
+compile (
+    );
+
+execute (
+    check_finished=>1,
+    );
+
+ok(1);
+1;
diff --git a/test_regress/t/t_param_local.v b/test_regress/t/t_param_local.v
new file mode 100644
index 000000000..a500bf9b1
--- /dev/null
+++ b/test_regress/t/t_param_local.v
@@ -0,0 +1,28 @@
+// DESCRIPTION: Verilator: Verilog Test module
+//
+// This file ONLY is placed into the Public Domain, for any use,
+// without warranty, 2017 by Wilson Snyder.
+
+module t (/*AUTOARG*/
+   // Inputs
+   a, y
+   );
+
+   input [1:0] a;
+   output [3:0] y;
+
+   Test #(.C(2))
+      test (.*);
+endmodule
+
+module Test
+  #(C = 3,
+    localparam O = 1 << C)
+   (input [C-1:0] a,
+    output reg [O-1:0] y);
+   initial begin
+      if (O != 4) $stop;
+      $write("*-* All Finished *-*\n");
+      $finish;
+   end
+endmodule