diff --git a/NEWS.md b/NEWS.md
index 365188694..8e47ca2c6 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -44,6 +44,7 @@
 - The `'driving_value` attribute now works correctly with record types.
 - Added basic support for `'instance_name`, `'path_name` and `'simple_name`
   attributes of generate block labels (from @NikLeberg) (#1125).
+- Comments are now parsed correctly inside PSL directives (#1129).
 - Several other minor bugs were resolved (#1038, #1057, #1067. #1124).
 
 ## Version 1.14.2 - 2024-11-23
diff --git a/src/lexer.l b/src/lexer.l
index eca8a743d..6b17ac232 100644
--- a/src/lexer.l
+++ b/src/lexer.l
@@ -90,6 +90,7 @@ static int report_bad_identifier(char *str);
 
 static int last_token = -1;
 static int comment_caller = 0;
+static bool in_psl_comment = false;
 
 extern loc_t yylloc;
 extern yylval_t yylval;
@@ -352,6 +353,7 @@ BEFORE            ?i:before
 <PSL,INITIAL>"--"        { comment_caller = YY_START; BEGIN(COMMENT); }
 <VLOG,UDP>"//"           { comment_caller = YY_START; BEGIN(COMMENT); }
 {PSL_COMMENT}            { if (begin_psl_comment()) {
+                              in_psl_comment = true;
                               BEGIN(PSL);
                               TOKEN(tSTARTPSL);
                            }
@@ -373,9 +375,13 @@ BEFORE            ?i:before
 <C_COMMENT>\n            { /* Must match a single character */ }
 <C_COMMENT>.             { }
 
-<PSL>;                   { TOKEN(tSEMI); }
-<PSL>{PSL_CONT}          { /* Multi-line PSL comment */ }
-<PSL>"--"                { comment_caller = YY_START; BEGIN(COMMENT); }
+<PSL>;                   { in_psl_comment = false; TOKEN(tSEMI); }
+<PSL>{PSL_CONT}          { /* Multi-line PSL comment */
+                           if (!in_psl_comment) {
+                              comment_caller = YY_START;
+                              BEGIN(COMMENT);
+                           }
+                         }
 
 {ENTITY}                 { TOKEN(tENTITY); }
 {IS}                     { TOKEN(tIS); }
@@ -1157,6 +1163,10 @@ static void warn_utf8(const char *text)
 
 void reset_scanner(void)
 {
+   last_token = -1;
+   comment_caller = 0;
+   in_psl_comment = false;
+
    YY_FLUSH_BUFFER;
    BEGIN(INITIAL);
 }
diff --git a/test/parse/issue1129.vhd b/test/parse/issue1129.vhd
new file mode 100644
index 000000000..ac9a4ff10
--- /dev/null
+++ b/test/parse/issue1129.vhd
@@ -0,0 +1,23 @@
+entity pragma_test is
+end pragma_test;
+
+architecture dummy of pragma_test is  -- OK
+begin
+  synerror: assert false
+-- pragma translate_off
+     or true
+-- pragma translate_on
+     report "dummy model found during synthesis" severity failure;
+
+end architecture dummy;
+
+
+architecture dummy2 of pragma_test is  -- generates parsing error
+begin
+  synerror: assert false
+    -- pragma translate_off
+     or true
+    -- pragma translate_on
+     report "dummy model found during synthesis" severity failure;
+
+end architecture dummy2;
diff --git a/test/test_parse.c b/test/test_parse.c
index f8c9f9929..caf98f827 100644
--- a/test/test_parse.c
+++ b/test/test_parse.c
@@ -7171,6 +7171,20 @@ START_TEST(test_issue1124)
 }
 END_TEST
 
+START_TEST(test_issue1129)
+{
+   set_standard(STD_08);
+
+   input_from_file(TESTDIR "/parse/issue1129.vhd");
+
+   parse_and_check(T_ENTITY, T_ARCH, T_ARCH);
+
+   fail_unless(parse() == NULL);
+
+   fail_if_errors();
+}
+END_TEST
+
 Suite *get_parse_tests(void)
 {
    Suite *s = suite_create("parse");
@@ -7347,6 +7361,7 @@ Suite *get_parse_tests(void)
    tcase_add_test(tc_core, test_gensub);
    tcase_add_test(tc_core, test_aggregate2);
    tcase_add_test(tc_core, test_issue1124);
+   tcase_add_test(tc_core, test_issue1129);
    suite_add_tcase(s, tc_core);
 
    return s;