diff --git a/snapshots/it_assignment.txt b/snapshots/it_assignment.txt
new file mode 100644
index 0000000000..83469791c0
--- /dev/null
+++ b/snapshots/it_assignment.txt
@@ -0,0 +1,58 @@
+@ ProgramNode (location: (1,0)-(1,24))
+├── flags: ∅
+├── locals: []
+└── statements:
+    @ StatementsNode (location: (1,0)-(1,24))
+    ├── flags: ∅
+    └── body: (length: 1)
+        └── @ CallNode (location: (1,0)-(1,24))
+            ├── flags: newline
+            ├── receiver:
+            │   @ IntegerNode (location: (1,0)-(1,2))
+            │   ├── flags: static_literal, decimal
+            │   └── value: 42
+            ├── call_operator_loc: (1,2)-(1,3) = "."
+            ├── name: :tap
+            ├── message_loc: (1,3)-(1,6) = "tap"
+            ├── opening_loc: ∅
+            ├── arguments: ∅
+            ├── closing_loc: ∅
+            └── block:
+                @ BlockNode (location: (1,7)-(1,24))
+                ├── flags: ∅
+                ├── locals: [:it]
+                ├── parameters: ∅
+                ├── body:
+                │   @ StatementsNode (location: (1,9)-(1,22))
+                │   ├── flags: ∅
+                │   └── body: (length: 2)
+                │       ├── @ LocalVariableWriteNode (location: (1,9)-(1,16))
+                │       │   ├── flags: newline
+                │       │   ├── name: :it
+                │       │   ├── depth: 0
+                │       │   ├── name_loc: (1,9)-(1,11) = "it"
+                │       │   ├── value:
+                │       │   │   @ LocalVariableReadNode (location: (1,14)-(1,16))
+                │       │   │   ├── flags: ∅
+                │       │   │   ├── name: :it
+                │       │   │   └── depth: 0
+                │       │   └── operator_loc: (1,12)-(1,13) = "="
+                │       └── @ CallNode (location: (1,18)-(1,22))
+                │           ├── flags: newline, ignore_visibility
+                │           ├── receiver: ∅
+                │           ├── call_operator_loc: ∅
+                │           ├── name: :p
+                │           ├── message_loc: (1,18)-(1,19) = "p"
+                │           ├── opening_loc: ∅
+                │           ├── arguments:
+                │           │   @ ArgumentsNode (location: (1,20)-(1,22))
+                │           │   ├── flags: ∅
+                │           │   └── arguments: (length: 1)
+                │           │       └── @ LocalVariableReadNode (location: (1,20)-(1,22))
+                │           │           ├── flags: ∅
+                │           │           ├── name: :it
+                │           │           └── depth: 0
+                │           ├── closing_loc: ∅
+                │           └── block: ∅
+                ├── opening_loc: (1,7)-(1,8) = "{"
+                └── closing_loc: (1,23)-(1,24) = "}"
diff --git a/snapshots/it_read_and_assignment.txt b/snapshots/it_read_and_assignment.txt
new file mode 100644
index 0000000000..73aa2b5909
--- /dev/null
+++ b/snapshots/it_read_and_assignment.txt
@@ -0,0 +1,75 @@
+@ ProgramNode (location: (1,0)-(1,30))
+├── flags: ∅
+├── locals: []
+└── statements:
+    @ StatementsNode (location: (1,0)-(1,30))
+    ├── flags: ∅
+    └── body: (length: 1)
+        └── @ CallNode (location: (1,0)-(1,30))
+            ├── flags: newline
+            ├── receiver:
+            │   @ IntegerNode (location: (1,0)-(1,2))
+            │   ├── flags: static_literal, decimal
+            │   └── value: 42
+            ├── call_operator_loc: (1,2)-(1,3) = "."
+            ├── name: :tap
+            ├── message_loc: (1,3)-(1,6) = "tap"
+            ├── opening_loc: ∅
+            ├── arguments: ∅
+            ├── closing_loc: ∅
+            └── block:
+                @ BlockNode (location: (1,7)-(1,30))
+                ├── flags: ∅
+                ├── locals: [:it]
+                ├── parameters:
+                │   @ ItParametersNode (location: (1,7)-(1,30))
+                │   └── flags: ∅
+                ├── body:
+                │   @ StatementsNode (location: (1,9)-(1,28))
+                │   ├── flags: ∅
+                │   └── body: (length: 3)
+                │       ├── @ CallNode (location: (1,9)-(1,13))
+                │       │   ├── flags: newline, ignore_visibility
+                │       │   ├── receiver: ∅
+                │       │   ├── call_operator_loc: ∅
+                │       │   ├── name: :p
+                │       │   ├── message_loc: (1,9)-(1,10) = "p"
+                │       │   ├── opening_loc: ∅
+                │       │   ├── arguments:
+                │       │   │   @ ArgumentsNode (location: (1,11)-(1,13))
+                │       │   │   ├── flags: ∅
+                │       │   │   └── arguments: (length: 1)
+                │       │   │       └── @ ItLocalVariableReadNode (location: (1,11)-(1,13))
+                │       │   │           └── flags: ∅
+                │       │   ├── closing_loc: ∅
+                │       │   └── block: ∅
+                │       ├── @ LocalVariableWriteNode (location: (1,15)-(1,22))
+                │       │   ├── flags: newline
+                │       │   ├── name: :it
+                │       │   ├── depth: 0
+                │       │   ├── name_loc: (1,15)-(1,17) = "it"
+                │       │   ├── value:
+                │       │   │   @ LocalVariableReadNode (location: (1,20)-(1,22))
+                │       │   │   ├── flags: ∅
+                │       │   │   ├── name: :it
+                │       │   │   └── depth: 0
+                │       │   └── operator_loc: (1,18)-(1,19) = "="
+                │       └── @ CallNode (location: (1,24)-(1,28))
+                │           ├── flags: newline, ignore_visibility
+                │           ├── receiver: ∅
+                │           ├── call_operator_loc: ∅
+                │           ├── name: :p
+                │           ├── message_loc: (1,24)-(1,25) = "p"
+                │           ├── opening_loc: ∅
+                │           ├── arguments:
+                │           │   @ ArgumentsNode (location: (1,26)-(1,28))
+                │           │   ├── flags: ∅
+                │           │   └── arguments: (length: 1)
+                │           │       └── @ LocalVariableReadNode (location: (1,26)-(1,28))
+                │           │           ├── flags: ∅
+                │           │           ├── name: :it
+                │           │           └── depth: 0
+                │           ├── closing_loc: ∅
+                │           └── block: ∅
+                ├── opening_loc: (1,7)-(1,8) = "{"
+                └── closing_loc: (1,29)-(1,30) = "}"
diff --git a/src/prism.c b/src/prism.c
index 6d4381565c..32930b900e 100644
--- a/src/prism.c
+++ b/src/prism.c
@@ -21171,6 +21171,13 @@ parse_expression_infix(pm_parser_t *parser, pm_node_t *node, pm_binding_power_t
                 }
                 PRISM_FALLTHROUGH
                 case PM_CASE_WRITABLE: {
+                    // When we have `it = value`, we need to add `it` as a local
+                    // variable before parsing the value, in case the value
+                    // references the variable.
+                    if (PM_NODE_TYPE_P(node, PM_IT_LOCAL_VARIABLE_READ_NODE)) {
+                        pm_parser_local_add_location(parser, node->location.start, node->location.end, 0);
+                    }
+
                     parser_lex(parser);
                     pm_node_t *value = parse_assignment_values(parser, previous_binding_power, PM_NODE_TYPE_P(node, PM_MULTI_TARGET_NODE) ? PM_BINDING_POWER_MULTI_ASSIGNMENT + 1 : binding_power, accepts_command_call, PM_ERR_EXPECT_EXPRESSION_AFTER_EQUAL, (uint16_t) (depth + 1));
 
diff --git a/test/prism/fixtures/it_assignment.txt b/test/prism/fixtures/it_assignment.txt
new file mode 100644
index 0000000000..523b0ffe1e
--- /dev/null
+++ b/test/prism/fixtures/it_assignment.txt
@@ -0,0 +1 @@
+42.tap { it = it; p it }
diff --git a/test/prism/fixtures/it_read_and_assignment.txt b/test/prism/fixtures/it_read_and_assignment.txt
new file mode 100644
index 0000000000..2cceeb2a54
--- /dev/null
+++ b/test/prism/fixtures/it_read_and_assignment.txt
@@ -0,0 +1 @@
+42.tap { p it; it = it; p it }