diff --git a/dust-lang/src/analyzer.rs b/dust-lang/src/analyzer.rs
index d040842..c217ec1 100644
--- a/dust-lang/src/analyzer.rs
+++ b/dust-lang/src/analyzer.rs
@@ -16,7 +16,8 @@ use crate::{
         LoopExpression, MapExpression, Node, OperatorExpression, RangeExpression, Span, Statement,
         StructDefinition, StructExpression, TupleAccessExpression,
     },
-    parse, Context, ContextError, DustError, Expression, Identifier, StructType, Type,
+    core_library, parse, Context, ContextError, DustError, Expression, Identifier, StructType,
+    Type,
 };
 
 /// Analyzes the abstract syntax tree for errors.
@@ -32,7 +33,7 @@ use crate::{
 /// ```
 pub fn analyze(source: &str) -> Result<(), DustError> {
     let abstract_tree = parse(source)?;
-    let context = Context::new();
+    let context = core_library().create_child();
     let analyzer = Analyzer::new(&abstract_tree, context);
 
     analyzer
@@ -149,7 +150,7 @@ impl<'recovered, 'a: 'recovered> Analyzer<'a> {
         Ok(())
     }
 
-    fn analyze_expression(&'recovered self, expression: &Expression) -> Result<(), AnalysisError> {
+    fn analyze_expression(&self, expression: &Expression) -> Result<(), AnalysisError> {
         match expression {
             Expression::Block(block_expression) => self.analyze_block(&block_expression.inner)?,
             Expression::Call(call_expression) => {
@@ -173,8 +174,15 @@ impl<'recovered, 'a: 'recovered> Analyzer<'a> {
                 self.analyze_expression(expression.inner.as_ref())?;
             }
             Expression::Identifier(identifier) => {
-                self.context
+                let found = self
+                    .context
                     .update_last_position(&identifier.inner, identifier.position)?;
+
+                if !found {
+                    return Err(AnalysisError::UndefinedVariable {
+                        identifier: identifier.clone(),
+                    });
+                }
             }
             Expression::If(if_expression) => self.analyze_if(&if_expression.inner)?,
             Expression::List(list_expression) => match list_expression.inner.as_ref() {
@@ -573,7 +581,7 @@ mod tests {
     #[test]
     fn subtract_assign_wrong_type() {
         let source = "
-            a = 1
+            let mut a = 1;
             a -= 1.0
         ";
 
@@ -674,6 +682,14 @@ mod tests {
     fn undefined_variable() {
         let source = "foo";
 
-        assert_eq!(analyze(source), todo!());
+        assert_eq!(
+            analyze(source),
+            Err(DustError::Analysis {
+                analysis_error: AnalysisError::UndefinedVariable {
+                    identifier: Node::new(Identifier::new("foo"), (0, 3))
+                },
+                source,
+            })
+        );
     }
 }
diff --git a/dust-lang/src/ast/mod.rs b/dust-lang/src/ast/mod.rs
index 564a48a..ed1ba1b 100644
--- a/dust-lang/src/ast/mod.rs
+++ b/dust-lang/src/ast/mod.rs
@@ -72,7 +72,7 @@ pub enum AstError {
 impl AstError {
     pub fn position(&self) -> Option<Span> {
         match self {
-            AstError::ContextError(error) => None,
+            AstError::ContextError(_) => None,
             AstError::ExpectedType { position } => Some(*position),
             AstError::ExpectedTupleType { position } => Some(*position),
             AstError::ExpectedNonEmptyList { position } => Some(*position),
diff --git a/dust-lang/src/context.rs b/dust-lang/src/context.rs
index b79e8a4..c2e3cc1 100644
--- a/dust-lang/src/context.rs
+++ b/dust-lang/src/context.rs
@@ -47,7 +47,13 @@ impl Context {
 
     /// Returns a boolean indicating whether the identifier is in the context.
     pub fn contains(&self, identifier: &Identifier) -> Result<bool, ContextError> {
-        Ok(self.associations.read()?.contains_key(identifier))
+        if self.associations.read()?.contains_key(identifier) {
+            Ok(true)
+        } else if let Some(parent) = &self.parent {
+            parent.contains(identifier)
+        } else {
+            Ok(false)
+        }
     }
 
     /// Returns the full ContextData and Span if the context contains the given identifier.
@@ -224,7 +230,9 @@ impl Context {
     }
 
     /// Updates an associated identifier's last known position, allowing it to live longer in the
-    /// program. Returns a boolean indicating whether the identifier.
+    /// program. Returns a boolean indicating whether the identifier was found. If the identifier is
+    /// not found in the current context, the parent context is searched but parent context's
+    /// position is not updated.
     pub fn update_last_position(
         &self,
         identifier: &Identifier,
@@ -236,6 +244,8 @@ impl Context {
             log::trace!("Updating {identifier}'s last position to {position:?}");
 
             Ok(true)
+        } else if let Some(parent) = &self.parent {
+            parent.contains(identifier)
         } else {
             Ok(false)
         }
diff --git a/dust-lang/src/vm.rs b/dust-lang/src/vm.rs
index e98c1e5..96a24ce 100644
--- a/dust-lang/src/vm.rs
+++ b/dust-lang/src/vm.rs
@@ -1462,8 +1462,6 @@ mod tests {
 
     #[test]
     fn while_loop() {
-        env_logger::builder().is_test(true).try_init().ok();
-
         let input = "let mut x = 0; while x < 5 { x += 1 } x";
 
         assert_eq!(run(input), Ok(Some(Value::mutable_from(5))));