diff --git a/toolchain/check/testdata/function/declaration/fail_todo_no_params.carbon b/toolchain/check/testdata/function/declaration/fail_todo_no_params.carbon
index af631ea5cda3..ad784c0dd94b 100644
--- a/toolchain/check/testdata/function/declaration/fail_todo_no_params.carbon
+++ b/toolchain/check/testdata/function/declaration/fail_todo_no_params.carbon
@@ -71,7 +71,7 @@ library "[[@TEST_NAME]]";
 // CHECK:STDERR: var x:! () = ();
 // CHECK:STDERR:     ^~~~~~
 // CHECK:STDERR:
-// CHECK:STDERR: fail_invalid_file_generic_regression_test.carbon:[[@LINE+4]]:12: error: `var` pattern cannot declare a compile-time binding [CompileTimeBindingInVarDecl]
+// CHECK:STDERR: fail_invalid_file_generic_regression_test.carbon:[[@LINE+4]]:12: error: found `:!` pattern inside `var` pattern [NonRegularBindingInVarDecl]
 // CHECK:STDERR: var x:! () = ();
 // CHECK:STDERR:            ^
 // CHECK:STDERR:
diff --git a/toolchain/check/testdata/var/fail_generic.carbon b/toolchain/check/testdata/var/fail_generic.carbon
index eff9a366ae6b..0476ebc7962b 100644
--- a/toolchain/check/testdata/var/fail_generic.carbon
+++ b/toolchain/check/testdata/var/fail_generic.carbon
@@ -17,7 +17,7 @@ fn Main() {
   // CHECK:STDERR:   var x:! () = ();
   // CHECK:STDERR:       ^~~~~~
   // CHECK:STDERR:
-  // CHECK:STDERR: fail_generic.carbon:[[@LINE+4]]:14: error: `var` pattern cannot declare a compile-time binding [CompileTimeBindingInVarDecl]
+  // CHECK:STDERR: fail_generic.carbon:[[@LINE+4]]:14: error: found `:!` pattern inside `var` pattern [NonRegularBindingInVarDecl]
   // CHECK:STDERR:   var x:! () = ();
   // CHECK:STDERR:              ^
   // CHECK:STDERR:
diff --git a/toolchain/check/testdata/var/var_pattern.carbon b/toolchain/check/testdata/var/var_pattern.carbon
index e064d9a1c0fd..2d4a23c7dea1 100644
--- a/toolchain/check/testdata/var/var_pattern.carbon
+++ b/toolchain/check/testdata/var/var_pattern.carbon
@@ -98,7 +98,7 @@ fn f() {
   // CHECK:STDERR:   var T:! type;
   // CHECK:STDERR:       ^~~~~~~~
   // CHECK:STDERR:
-  // CHECK:STDERR: fail_compile_time.carbon:[[@LINE+4]]:15: error: `var` pattern cannot declare a compile-time binding [CompileTimeBindingInVarDecl]
+  // CHECK:STDERR: fail_compile_time.carbon:[[@LINE+4]]:15: error: found `:!` pattern inside `var` pattern [NonRegularBindingInVarDecl]
   // CHECK:STDERR:   var T:! type;
   // CHECK:STDERR:               ^
   // CHECK:STDERR:
@@ -120,7 +120,7 @@ fn F[var u: ()]();
 // CHECK:STDERR: fn G[var T:! type]();
 // CHECK:STDERR:          ^~~~~~~~
 // CHECK:STDERR:
-// CHECK:STDERR: fail_implicit.carbon:[[@LINE+4]]:18: error: `var` pattern cannot declare a compile-time binding [CompileTimeBindingInVarDecl]
+// CHECK:STDERR: fail_implicit.carbon:[[@LINE+4]]:18: error: found `:!` pattern inside `var` pattern [NonRegularBindingInVarDecl]
 // CHECK:STDERR: fn G[var T:! type]();
 // CHECK:STDERR:                  ^
 // CHECK:STDERR:
diff --git a/toolchain/diagnostics/kind.def b/toolchain/diagnostics/kind.def
index 8ab22855b9cd..e9932203349f 100644
--- a/toolchain/diagnostics/kind.def
+++ b/toolchain/diagnostics/kind.def
@@ -434,7 +434,6 @@ CARBON_DIAGNOSTIC_KIND(CoreNameNotFound)
 CARBON_DIAGNOSTIC_KIND(CoreNotFound)
 CARBON_DIAGNOSTIC_KIND(DerefOfNonPointer)
 CARBON_DIAGNOSTIC_KIND(DerefOfType)
-CARBON_DIAGNOSTIC_KIND(CompileTimeBindingInVarDecl)
 CARBON_DIAGNOSTIC_KIND(CompoundMemberAccessDoesNotUseBase)
 CARBON_DIAGNOSTIC_KIND(EvalRequiresConstantValue)
 CARBON_DIAGNOSTIC_KIND(FormExprEvaluationFailure)
@@ -466,6 +465,7 @@ CARBON_DIAGNOSTIC_KIND(IntWidthTooLarge)
 CARBON_DIAGNOSTIC_KIND(InvalidArrayExpr)
 CARBON_DIAGNOSTIC_KIND(NegativeIntInUnsignedType)
 CARBON_DIAGNOSTIC_KIND(NonConstantCallToCompTimeOnlyFunction)
+CARBON_DIAGNOSTIC_KIND(NonRegularBindingInVarDecl)
 CARBON_DIAGNOSTIC_KIND(CompTimeOnlyFunctionHere)
 CARBON_DIAGNOSTIC_KIND(SelfOutsideImplicitParamList)
 CARBON_DIAGNOSTIC_KIND(StringAtIndexOutOfBounds)
diff --git a/toolchain/parse/handle_binding_pattern.cpp b/toolchain/parse/handle_binding_pattern.cpp
index 98267fe386ab..4777c34c985f 100644
--- a/toolchain/parse/handle_binding_pattern.cpp
+++ b/toolchain/parse/handle_binding_pattern.cpp
@@ -112,7 +112,7 @@ auto HandleBindingPattern(Context& context) -> void {
   }
 }
 
-// Handles BindingPatternFinishAs(Generic|Regular).
+// Handles BindingPatternFinishAs(Generic|Regular|Form).
 static auto HandleBindingPatternFinish(Context& context, StateKind finish_kind)
     -> void {
   auto state = context.PopState();
@@ -120,10 +120,13 @@ static auto HandleBindingPatternFinish(Context& context, StateKind finish_kind)
   auto node_kind = NodeKind::InvalidParse;
   if (state.in_var_pattern) {
     node_kind = NodeKind::VarBindingPattern;
-    if (finish_kind == StateKind::BindingPatternFinishAsGeneric) {
-      CARBON_DIAGNOSTIC(CompileTimeBindingInVarDecl, Error,
-                        "`var` pattern cannot declare a compile-time binding");
-      context.emitter().Emit(*context.position(), CompileTimeBindingInVarDecl);
+    if (finish_kind != StateKind::BindingPatternFinishAsRegular) {
+      CARBON_DIAGNOSTIC(NonRegularBindingInVarDecl, Error,
+                        "found {0:`:!`|`:?`} pattern inside `var` pattern",
+                        Diagnostics::BoolAsSelect);
+      context.emitter().Emit(
+          *context.position(), NonRegularBindingInVarDecl,
+          finish_kind == StateKind::BindingPatternFinishAsGeneric);
       state.has_error = true;
     }
   } else {
diff --git a/toolchain/parse/testdata/function/declaration.carbon b/toolchain/parse/testdata/function/declaration.carbon
index 342913304402..317f8fc65688 100644
--- a/toolchain/parse/testdata/function/declaration.carbon
+++ b/toolchain/parse/testdata/function/declaration.carbon
@@ -175,6 +175,14 @@ fn ComplexFormParam(x:? X.Y(Z));
 // CHECK:STDERR:
 fn F(ref x:? Form);
 
+// --- fail_form_within_var.carbon
+
+// CHECK:STDERR: fail_form_within_var.carbon:[[@LINE+4]]:26: error: found `:?` pattern inside `var` pattern [NonRegularBindingInVarDecl]
+// CHECK:STDERR: fn FormInVar(var x:? Form);
+// CHECK:STDERR:                          ^
+// CHECK:STDERR:
+fn FormInVar(var x:? Form);
+
 // --- return_form.carbon
 
 fn SimpleReturnForm() ->? Form;
@@ -479,6 +487,20 @@ fn ComplexReturnForm() ->? X.Y(Z);
 // CHECK:STDOUT:     {kind: 'FunctionDecl', text: ';', subtree_size: 9},
 // CHECK:STDOUT:     {kind: 'FileEnd', text: ''},
 // CHECK:STDOUT:   ]
+// CHECK:STDOUT: - filename: fail_form_within_var.carbon
+// CHECK:STDOUT:   parse_tree: [
+// CHECK:STDOUT:     {kind: 'FileStart', text: ''},
+// CHECK:STDOUT:       {kind: 'FunctionIntroducer', text: 'fn'},
+// CHECK:STDOUT:       {kind: 'IdentifierNameMaybeBeforeSignature', text: 'FormInVar'},
+// CHECK:STDOUT:         {kind: 'ExplicitParamListStart', text: '('},
+// CHECK:STDOUT:             {kind: 'IdentifierNameNotBeforeSignature', text: 'x'},
+// CHECK:STDOUT:             {kind: 'IdentifierNameExpr', text: 'Form'},
+// CHECK:STDOUT:           {kind: 'VarBindingPattern', text: ':?', has_error: yes, subtree_size: 3},
+// CHECK:STDOUT:         {kind: 'VariablePattern', text: 'var', has_error: yes, subtree_size: 4},
+// CHECK:STDOUT:       {kind: 'ExplicitParamList', text: ')', has_error: yes, subtree_size: 6},
+// CHECK:STDOUT:     {kind: 'FunctionDecl', text: ';', subtree_size: 9},
+// CHECK:STDOUT:     {kind: 'FileEnd', text: ''},
+// CHECK:STDOUT:   ]
 // CHECK:STDOUT: - filename: return_form.carbon
 // CHECK:STDOUT:   parse_tree: [
 // CHECK:STDOUT:     {kind: 'FileStart', text: ''},