diff --git a/src/parser.cc b/src/parser.cc
index 9539d3891f..93af5028b8 100644
--- a/src/parser.cc
+++ b/src/parser.cc
@@ -723,7 +723,14 @@ Expression* ParserTraits::ExpressionFromIdentifier(const AstRawString* name,
     PrintF("# Variable %.*s ", name->length(), name->raw_data());
 #endif
   Interface* interface = Interface::NewUnknown(parser_->zone());
-  return scope->NewUnresolved(factory, name, interface, pos);
+
+  // Arrow function parameters are parsed as an expression. When
+  // parsing lazily, it is enough to create a VariableProxy in order
+  // for Traits::DeclareArrowParametersFromExpression() to be able to
+  // pick the names of the parameters.
+  return parser_->parsing_lazy_arrow_parameters_
+      ? factory->NewVariableProxy(name, false, interface, pos)
+      : scope->NewUnresolved(factory, name, interface, pos);
 }
 
 
@@ -788,6 +795,7 @@ Parser::Parser(CompilationInfo* info, ParseInfo* parse_info)
       target_stack_(NULL),
       cached_parse_data_(NULL),
       info_(info),
+      parsing_lazy_arrow_parameters_(false),
       has_pending_error_(false),
       pending_error_message_(NULL),
       pending_error_arg_(NULL),
@@ -1061,6 +1069,10 @@ FunctionLiteral* Parser::ParseLazy(Utf16CharacterStream* source) {
     bool ok = true;
 
     if (shared_info->is_arrow()) {
+      // The first expression being parsed is the parameter list of the arrow
+      // function. Setting this avoids prevents ExpressionFromIdentifier()
+      // from creating unresolved variables in already-resolved scopes.
+      parsing_lazy_arrow_parameters_ = true;
       Expression* expression = ParseExpression(false, &ok);
       DCHECK(expression->IsFunctionLiteral());
       result = expression->AsFunctionLiteral();
@@ -3430,6 +3442,10 @@ int ParserTraits::DeclareArrowParametersFromExpression(
     Expression* expression, Scope* scope, Scanner::Location* dupe_loc,
     bool* ok) {
   int num_params = 0;
+  // Always reset the flag: It only needs to be set for the first expression
+  // parsed as arrow function parameter list, becauseonly top-level functions
+  // are parsed lazily.
+  parser_->parsing_lazy_arrow_parameters_ = false;
   *ok = CheckAndDeclareArrowParameter(this, expression, scope, &num_params,
                                       dupe_loc);
   return num_params;
diff --git a/src/parser.h b/src/parser.h
index e998771831..dedc45aae7 100644
--- a/src/parser.h
+++ b/src/parser.h
@@ -888,6 +888,7 @@ class Parser : public ParserBase<ParserTraits> {
   ParseData* cached_parse_data_;
 
   CompilationInfo* info_;
+  bool parsing_lazy_arrow_parameters_;  // for lazily parsed arrow functions.
 
   // Pending errors.
   bool has_pending_error_;
diff --git a/test/mjsunit/regress/regress-3501.js b/test/mjsunit/regress/regress-3501.js
new file mode 100644
index 0000000000..4b449e458f
--- /dev/null
+++ b/test/mjsunit/regress/regress-3501.js
@@ -0,0 +1,11 @@
+// Copyright 2014 the V8 project authors. All rights reserved.
+// Use of this source code is governed by a BSD-style license that can be
+// found in the LICENSE file.
+
+// Flags: --harmony-arrow-functions
+
+// See: http://code.google.com/p/v8/issues/detail?id=3501
+
+"use strict";
+let lift = f => (x, k) => k (f (x));
+lift(isNaN);