diff --git a/CHANGELOG.md b/CHANGELOG.md
index e64a76374..6172d5f76 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,4 +1,5 @@
 ## master
+- Fix issue with highlighting of templates introduced in release 1.2.0.
 
 ## 1.2.0
 
diff --git a/grammars/rescript.tmLanguage.json b/grammars/rescript.tmLanguage.json
index d5c147e74..5932d7eae 100644
--- a/grammars/rescript.tmLanguage.json
+++ b/grammars/rescript.tmLanguage.json
@@ -127,7 +127,7 @@
         {
           "name": "string.template",
           "begin": "([a-z_][0-9a-zA-Z_]*)?(`)",
-          "end": "[^\\\\]`",
+          "end": "(?<!\\\\)`",
           "beginCaptures": {
             "1": {
               "name": "variables.annotation"