diff --git a/LexOccam.x b/LexOccam.x
index b5e2974..c3555b9 100644
--- a/LexOccam.x
+++ b/LexOccam.x
@@ -20,10 +20,10 @@ with this program.  If not, see <http://www.gnu.org/licenses/>.
 module LexOccam where
 
 import Data.Generics
-import System
 
+import Errors
 import Metadata
-import PrettyShow
+import Pass
 }
 
 %wrapper "posn"
@@ -96,7 +96,13 @@ $white+            ;
 
 {
 -- | An occam source token.
-data Token = Token TokenType Meta String
+-- Only `Token` is generated by the lexer itself; the others are added later
+-- once the indentation has been analysed.
+data Token =
+  Token TokenType Meta String          -- ^ A real token read from the source
+  | Indent                             -- ^ Indentation increase
+  | Outdent                            -- ^ Indentation decrease
+  | EndOfLine                          -- ^ End of line
   deriving (Show, Eq, Typeable, Data)
 
 -- | The type of a source token.
@@ -111,22 +117,19 @@ mkToken :: TokenType -> AlexPosn -> String -> Token
 mkToken tt (AlexPn _ line col) s = Token tt emptyMeta s
 
 -- | Run the lexer, returning either an error position or a list of tokens.
--- (This is based on the `alexScanTokens` function that Alex provides, but it
--- adds error reporting.)
-runLexer :: String -> String -> Either Meta [Token]
+-- (This is based on the `alexScanTokens` function that Alex provides.)
+runLexer :: String -> String -> PassM [Token]
 runLexer filename str = go (alexStartPos, '\n', str)
   where
     go inp@(pos@(AlexPn _ line col), _, str) =
          case alexScan inp 0 of
-           AlexEOF -> Right []
-           AlexError _ -> Left meta
+           AlexEOF -> return []
+           AlexError _ -> dieP meta "Unrecognised token"
            AlexSkip inp' len -> go inp'
            AlexToken inp' len act ->
-             case go inp' of
-               e@(Left _) -> e
-               Right ts -> Right $ tok : ts
-                             where (Token tt _ s) = act pos (take len str)
-                                   tok = Token tt meta s
+             do ts <- go inp'
+                let (Token tt _ s) = act pos (take len str)
+                return $ (Token tt meta s) : ts
 
       where
         meta = emptyMeta {
@@ -134,16 +137,5 @@ runLexer filename str = go (alexStartPos, '\n', str)
                  metaLine = line,
                  metaColumn = col
                }
-
--- | Main function for testing the lexer.
-main :: IO ()
-main
-    =  do (arg:_) <- getArgs
-          s <- readFile arg
-          let tokens =
-                case runLexer arg s of
-                  Left m -> error $ "Lex error: " ++ show m
-                  Right ts -> ts
-          putStrLn $ pshow tokens
 }
 
diff --git a/Makefile b/Makefile
index 5394140..d02db7e 100644
--- a/Makefile
+++ b/Makefile
@@ -21,7 +21,7 @@ tocktest: $(sources)
 	ghc $(ghc_opts) -o tocktest -main-is TestMain --make TestMain
 
 lextest: $(sources)
-	ghc $(ghc_opts) -o lextest -main-is LexOccam --make LexOccam
+	ghc $(ghc_opts) -o lextest -main-is StructureOccam --make StructureOccam
 
 CFLAGS = \
 	-O2 \
diff --git a/StructureOccam.hs b/StructureOccam.hs
new file mode 100644
index 0000000..10341ee
--- /dev/null
+++ b/StructureOccam.hs
@@ -0,0 +1,84 @@
+{-
+Tock: a compiler for parallel languages
+Copyright (C) 2007  University of Kent
+
+This program is free software; you can redistribute it and/or modify it
+under the terms of the GNU General Public License as published by the
+Free Software Foundation, either version 2 of the License, or (at your
+option) any later version.
+
+This program is distributed in the hope that it will be useful, but
+WITHOUT ANY WARRANTY; without even the implied warranty of
+MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
+General Public License for more details.
+
+You should have received a copy of the GNU General Public License along
+with this program.  If not, see <http://www.gnu.org/licenses/>.
+-}
+
+-- | Analyse syntactic structure of occam code.
+module StructureOccam where
+
+import Control.Monad.Error
+import Control.Monad.State
+import Data.Generics
+import System
+
+import CompState
+import Errors
+import LexOccam
+import Metadata
+import Pass
+import PrettyShow
+
+-- | Given the output of the lexer for a single file, add `Indent`, `Outdent`
+-- and `EndOfLine` markers.
+structureOccam :: [Token] -> PassM [Token]
+structureOccam [] = return []
+structureOccam ts = analyse 1 firstLine ts
+  where
+    -- Find the first line that's actually got something on it.
+    firstLine
+        = case ts of (Token _ m _:_) -> metaLine m
+
+    analyse :: Int -> Int -> [Token] -> PassM [Token]
+    -- Add extra EndOfLine at the end of the file.
+    analyse _ _ [] = return [EndOfLine]
+    analyse prevCol prevLine (t@(Token _ m _):ts)
+        = if line /= prevLine
+             then do rest <- analyse col line ts
+                     newLine $ t : rest
+             else do rest <- analyse prevCol line ts
+                     return $ t : rest
+      where
+        col = metaColumn m
+        line = metaLine m
+
+        -- A new line -- look to see what's going on with the indentation.
+        newLine rest
+          | col == prevCol + 2   = return $ EndOfLine : Indent : rest
+          -- FIXME: If col > prevCol, then look to see if there's a VALOF
+          -- coming up before the next column change...
+          | col < prevCol
+              = if (prevCol - col) `mod` 2 == 0
+                  then return $ EndOfLine : (replicate steps Outdent ++ rest)
+                  else dieP m "Invalid indentation"
+          | col == prevCol       = return $ EndOfLine : rest
+          | otherwise            = dieP m "Invalid indentation"
+            where
+              steps = (prevCol - col) `div` 2
+
+-- | Main function for testing.
+main :: IO ()
+main
+    =  do (arg:_) <- getArgs
+          s <- readFile arg
+          e <- evalStateT (runErrorT (test arg s)) emptyState
+          return ()
+  where
+    test :: String -> String -> PassM ()
+    test arg s
+        = do tokens <- runLexer arg s
+             tokens' <- structureOccam tokens
+             liftIO $ putStrLn $ pshow tokens'
+