diff --git a/crates/nu-parser/src/parser.rs b/crates/nu-parser/src/parser.rs
index 3dddc0a8eb..90aeb44ab3 100644
--- a/crates/nu-parser/src/parser.rs
+++ b/crates/nu-parser/src/parser.rs
@@ -3098,10 +3098,22 @@ pub fn parse_var_with_opt_type(
     if bytes.ends_with(b":") {
         // We end with colon, so the next span should be the type
         if *spans_idx + 1 < spans.len() {
+            let span_beginning = *spans_idx;
             *spans_idx += 1;
-            let type_bytes = working_set.get_span_contents(spans[*spans_idx]).to_vec();
+            // signature like record<a: int b: int> is broken into multiple spans due to
+            // whitespaces. Collect the rest into one span and work on it
+            let full_span = span(&spans[*spans_idx..]);
+            let type_bytes = working_set.get_span_contents(full_span).to_vec();
 
-            let ty = parse_type(working_set, &type_bytes, spans[*spans_idx]);
+            let (tokens, parse_error) =
+                lex_signature(&type_bytes, full_span.start, &[b','], &[], true);
+
+            if let Some(parse_error) = parse_error {
+                working_set.parse_errors.push(parse_error);
+            }
+
+            let ty = parse_type(working_set, &type_bytes, tokens[0].span);
+            *spans_idx += spans.len() - *spans_idx - 1;
 
             let var_name = bytes[0..(bytes.len() - 1)].to_vec();
 
@@ -3118,7 +3130,7 @@ pub fn parse_var_with_opt_type(
             (
                 Expression {
                     expr: Expr::VarDecl(id),
-                    span: span(&spans[*spans_idx - 1..*spans_idx + 1]),
+                    span: span(&spans[span_beginning..*spans_idx + 1]),
                     ty: ty.clone(),
                     custom_completion: None,
                 },
@@ -3215,7 +3227,7 @@ pub fn parse_input_output_types(
         full_span.end -= 1;
     }
 
-    let (tokens, parse_error) = lex(bytes, full_span.start, &[b','], &[], true);
+    let (tokens, parse_error) = lex_signature(bytes, full_span.start, &[b','], &[], true);
 
     if let Some(parse_error) = parse_error {
         working_set.parse_errors.push(parse_error);
diff --git a/crates/nu-parser/tests/test_parser.rs b/crates/nu-parser/tests/test_parser.rs
index 901f339844..0f7faf6fa9 100644
--- a/crates/nu-parser/tests/test_parser.rs
+++ b/crates/nu-parser/tests/test_parser.rs
@@ -1354,6 +1354,38 @@ mod input_types {
         }
     }
 
+    #[derive(Clone)]
+    pub struct Def;
+
+    impl Command for Def {
+        fn name(&self) -> &str {
+            "def"
+        }
+
+        fn usage(&self) -> &str {
+            "Mock def command."
+        }
+
+        fn signature(&self) -> nu_protocol::Signature {
+            Signature::build("def")
+                .input_output_types(vec![(Type::Nothing, Type::Nothing)])
+                .required("def_name", SyntaxShape::String, "definition name")
+                .required("params", SyntaxShape::Signature, "parameters")
+                .required("body", SyntaxShape::Closure(None), "body of the definition")
+                .category(Category::Core)
+        }
+
+        fn run(
+            &self,
+            _engine_state: &EngineState,
+            _stack: &mut Stack,
+            _call: &Call,
+            _input: PipelineData,
+        ) -> Result<PipelineData, ShellError> {
+            todo!()
+        }
+    }
+
     #[derive(Clone)]
     pub struct GroupBy;
 
@@ -1608,6 +1640,7 @@ mod input_types {
         let delta = {
             let mut working_set = StateWorkingSet::new(engine_state);
             working_set.add_decl(Box::new(Let));
+            working_set.add_decl(Box::new(Def));
             working_set.add_decl(Box::new(AggCustom));
             working_set.add_decl(Box::new(GroupByCustom));
             working_set.add_decl(Box::new(GroupBy));
@@ -1833,4 +1866,52 @@ mod input_types {
             Some(ParseError::VariableNotFound(_, _))
         ));
     }
+
+    #[rstest]
+    #[case::input_output(b"def q []: int -> int {1}", false)]
+    #[case::input_output(b"def q []: string -> string {'qwe'}", false)]
+    #[case::input_output(b"def q []: nothing -> nothing {null}", false)]
+    #[case::input_output(b"def q []: list<string> -> list<string> {[]}", false)]
+    #[case::input_output(
+        b"def q []: record<a: int b: int> -> record<c: int e: int> {{c: 1 e: 1}}",
+        false
+    )]
+    #[case::input_output(
+        b"def q []: table<a: int b: int> -> table<c: int e: int> {[{c: 1 e: 1}]}",
+        false
+    )]
+    #[case::input_output(
+        b"def q []: nothing -> record<c: record<a: int b: int> e: int> {{c: {a: 1 b: 2} e: 1}}",
+        false
+    )]
+    #[case::input_output(b"def q []: nothing -> list<string {[]}", true)]
+    #[case::input_output(b"def q []: nothing -> record<c: int e: int {{c: 1 e: 1}}", true)]
+    #[case::input_output(b"def q []: record<c: int e: int -> record<a: int> {{a: 1}}", true)]
+    #[case::input_output(b"def q []: nothing -> record<a: record<a: int> {{a: {a: 1}}}", true)]
+    #[case::vardecl(b"let a: int = 1", false)]
+    #[case::vardecl(b"let a: string = 'qwe'", false)]
+    #[case::vardecl(b"let a: nothing = null", false)]
+    #[case::vardecl(b"let a: list<string> = []", false)]
+    #[case::vardecl(b"let a: record<a: int b: int> = {a: 1 b: 1}", false)]
+    #[case::vardecl(
+        b"let a: record<c: record<a: int b: int> e: int> = {c: {a: 1 b: 2} e: 1}",
+        false
+    )]
+    #[case::vardecl(b"let a: table<a: int b: int> = [[a b]; [1 1]]", false)]
+    #[case::vardecl(b"let a: list<string asd> = []", true)]
+    #[case::vardecl(b"let a: record<a: int b: record<a: int> = {a: 1 b: {a: 1}}", true)]
+    fn test_type_annotations(#[case] phrase: &[u8], #[case] expect_errors: bool) {
+        let mut engine_state = EngineState::new();
+        add_declarations(&mut engine_state);
+        let mut working_set = StateWorkingSet::new(&engine_state);
+        // this should not panic
+        let _block = parse(&mut working_set, None, phrase, false);
+        // check that no parse errors happened
+        assert_eq!(
+            !working_set.parse_errors.is_empty(),
+            expect_errors,
+            "Got errors {:?}",
+            working_set.parse_errors
+        )
+    }
 }
diff --git a/tests/parsing/mod.rs b/tests/parsing/mod.rs
index c902c1258c..105173c109 100644
--- a/tests/parsing/mod.rs
+++ b/tests/parsing/mod.rs
@@ -2,6 +2,7 @@ use nu_test_support::fs::Stub::FileWithContentToBeTrimmed;
 use nu_test_support::playground::Playground;
 use nu_test_support::{nu, pipeline};
 use pretty_assertions::assert_eq;
+use rstest::rstest;
 
 #[test]
 fn source_file_relative_to_file() {
@@ -244,3 +245,29 @@ fn parse_long_duration() {
 
     assert_eq!(actual.out, "1min 18sec 797ms");
 }
+
+#[rstest]
+#[case("def test []: int -> int { 1 }")]
+#[case("def test []: string -> string { 'qwe' }")]
+#[case("def test []: nothing -> nothing { null }")]
+#[case("def test []: list<string> -> list<string> { [] }")]
+#[case("def test []: record<a: int b: int> -> record<c: int e: int> { {c: 1 e: 1} }")]
+#[case("def test []: table<a: int b: int> -> table<c: int e: int> { [ {c: 1 e: 1} ] }")]
+#[case("def test []: nothing -> record<c: int e: int> { {c: 1 e: 1} }")]
+fn parse_function_signature(#[case] phrase: &str) {
+    let actual = nu!(phrase);
+    assert!(actual.err.is_empty());
+}
+
+#[rstest]
+#[case("let a: int = 1")]
+#[case("let a: string = 'qwe'")]
+#[case("let a: nothing = null")]
+#[case("let a: list<string> = []")]
+#[case("let a: record<a: int b: int> = {a: 1 b: 1}")]
+#[case("let a: table<a: int b: int> = [[a b]; [1 2] [3 4]]")]
+#[case("let a: record<a: record<name: string> b: int> = {a: {name: bob} b: 1}")]
+fn parse_let_signature(#[case] phrase: &str) {
+    let actual = nu!(phrase);
+    assert!(actual.err.is_empty());
+}