diff --git a/lib/command.js b/lib/command.js
index 743e7439..3406926a 100644
--- a/lib/command.js
+++ b/lib/command.js
@@ -58,7 +58,7 @@
       base = path.join(source);
       compile = function(source, topLevel) {
         return path.exists(source, function(exists) {
-          if (!exists) {
+          if (topLevel && !exists) {
             throw new Error("File not found: " + source);
           }
           return fs.stat(source, function(err, stats) {
diff --git a/lib/lexer.js b/lib/lexer.js
index 8107b1aa..8b95ee48 100644
--- a/lib/lexer.js
+++ b/lib/lexer.js
@@ -598,7 +598,7 @@
   RESERVED = ['case', 'default', 'function', 'var', 'void', 'with', 'const', 'let', 'enum', 'export', 'import', 'native', '__hasProp', '__extends', '__slice', '__bind', '__indexOf'];
   JS_FORBIDDEN = JS_KEYWORDS.concat(RESERVED);
   exports.RESERVED = RESERVED.concat(JS_KEYWORDS).concat(COFFEE_KEYWORDS);
-  IDENTIFIER = /^([$A-Za-z_][$\w]*)([^\n\S]*:(?!:))?/;
+  IDENTIFIER = /^([$A-Za-z_\x7f-\uffff][$\w\x7f-\uffff]*)([^\n\S]*:(?!:))?/;
   NUMBER = /^0x[\da-f]+|^(?:\d+(\.\d+)?|\.\d+)(?:e[+-]?\d+)?/i;
   HEREDOC = /^("""|''')([\s\S]*?)(?:\n[^\n\S]*)?\1/;
   OPERATOR = /^(?:[-=]>|[-+*\/%<>&|^!?=]=|>>>=?|([-+:])\1|([&|<>])\2=?|\?\.|\.{2,3})/;
@@ -613,7 +613,7 @@
   HEREGEX_OMIT = /\s+(?:#.*)?/g;
   MULTILINER = /\n/g;
   HEREDOC_INDENT = /\n+([^\n\S]*)/g;
-  ASSIGNED = /^\s*@?([$A-Za-z_][$\w]*|['"].*['"])[^\n\S]*?[:=][^:=>]/;
+  ASSIGNED = /^\s*@?([$A-Za-z_][$\w\x7f-\uffff]*|['"].*['"])[^\n\S]*?[:=][^:=>]/;
   LINE_CONTINUER = /^\s*(?:,|\??\.(?!\.)|::)/;
   TRAILING_SPACES = /\s+$/;
   NO_NEWLINE = /^(?:[-+*&|\/%=<>!.\\][<>=&|]*|and|or|is(?:nt)?|n(?:ot|ew)|delete|typeof|instanceof)$/;
diff --git a/lib/nodes.js b/lib/nodes.js
index f7b1804c..ce9662d0 100644
--- a/lib/nodes.js
+++ b/lib/nodes.js
@@ -1071,7 +1071,7 @@
       this.context = context;
       this.param = options && options.param;
     }
-    Assign.prototype.METHOD_DEF = /^(?:(\S+)\.prototype\.|\S+?)?\b([$A-Za-z_][$\w]*)$/;
+    Assign.prototype.METHOD_DEF = /^(?:(\S+)\.prototype\.|\S+?)?\b([$A-Za-z_][$\w\x7f-\uffff]*)$/;
     Assign.prototype.children = ['variable', 'value'];
     Assign.prototype.assigns = function(name) {
       return this[this.context === 'object' ? 'value' : 'variable'].assigns(name);
@@ -2150,7 +2150,7 @@
   LEVEL_ACCESS = 6;
   TAB = '  ';
   TRAILING_WHITESPACE = /[ \t]+$/gm;
-  IDENTIFIER = /^[$A-Za-z_][$\w]*$/;
+  IDENTIFIER = /^[$A-Za-z_\x7f-\uffff][$\w\x7f-\uffff]*$/;
   SIMPLENUM = /^[+-]?\d+$/;
   IS_STRING = /^['"]/;
   utility = function(name) {
diff --git a/src/command.coffee b/src/command.coffee
index cdeb1279..b912c6cb 100644
--- a/src/command.coffee
+++ b/src/command.coffee
@@ -76,7 +76,7 @@ compileScripts = ->
     base = path.join(source)
     compile = (source, topLevel) ->
       path.exists source, (exists) ->
-        throw new Error "File not found: #{source}" unless exists
+        throw new Error "File not found: #{source}" if topLevel and not exists
         fs.stat source, (err, stats) ->
           if stats.isDirectory()
             fs.readdir source, (err, files) ->
diff --git a/src/lexer.coffee b/src/lexer.coffee
index 524cf76c..5d6bb39c 100644
--- a/src/lexer.coffee
+++ b/src/lexer.coffee
@@ -534,7 +534,7 @@ exports.RESERVED = RESERVED.concat(JS_KEYWORDS).concat(COFFEE_KEYWORDS)
 
 # Token matching regexes.
 IDENTIFIER = /// ^
-  ( [$A-Za-z_][$\w]* )
+  ( [$A-Za-z_\x7f-\uffff][$\w\x7f-\uffff]* )
   ( [^\n\S]* : (?!:) )?  # Is this a property name?
 ///
 
@@ -591,7 +591,7 @@ MULTILINER      = /\n/g
 
 HEREDOC_INDENT  = /\n+([^\n\S]*)/g
 
-ASSIGNED        = /^\s*@?([$A-Za-z_][$\w]*|['"].*['"])[^\n\S]*?[:=][^:=>]/
+ASSIGNED        = /^\s*@?([$A-Za-z_][$\w\x7f-\uffff]*|['"].*['"])[^\n\S]*?[:=][^:=>]/
 
 LINE_CONTINUER  = /// ^ \s* (?: , | \??\.(?!\.) | :: ) ///
 
diff --git a/src/nodes.coffee b/src/nodes.coffee
index 1afb4120..b5f99426 100644
--- a/src/nodes.coffee
+++ b/src/nodes.coffee
@@ -856,7 +856,7 @@ exports.Assign = class Assign extends Base
     @param = options and options.param
 
   # Matchers for detecting class/method names
-  METHOD_DEF: /^(?:(\S+)\.prototype\.|\S+?)?\b([$A-Za-z_][$\w]*)$/
+  METHOD_DEF: /^(?:(\S+)\.prototype\.|\S+?)?\b([$A-Za-z_][$\w\x7f-\uffff]*)$/
 
   children: ['variable', 'value']
 
@@ -1735,7 +1735,7 @@ TAB = '  '
 # with Git.
 TRAILING_WHITESPACE = /[ \t]+$/gm
 
-IDENTIFIER = /^[$A-Za-z_][$\w]*$/
+IDENTIFIER = /^[$A-Za-z_\x7f-\uffff][$\w\x7f-\uffff]*$/
 SIMPLENUM  = /^[+-]?\d+$/
 
 # Is a literal value a string?
diff --git a/test/_test_literals.coffee b/test/_test_literals.coffee
index 70e9cc31..969e2995 100644
--- a/test/_test_literals.coffee
+++ b/test/_test_literals.coffee
@@ -268,3 +268,7 @@ six: -> 10
 
 ok not one.six
 
+
+# Issue #986: Unicode identifiers.
+λ = 5
+eq λ, 5