diff --git a/explorer/BUILD b/explorer/BUILD
index 949910a21bc4..ba3ae2f68b4c 100644
--- a/explorer/BUILD
+++ b/explorer/BUILD
@@ -87,9 +87,6 @@ filegroup(
         ["testdata/**/*.carbon"],
         exclude = [
             "testdata/**/fail_*",
-
-            # multiline strings
-            "testdata/string/*",
         ],
     ),
     visibility = ["//utils/treesitter:__pkg__"],
diff --git a/utils/treesitter/BUILD b/utils/treesitter/BUILD
index de2b190fda27..58e449a07657 100644
--- a/utils/treesitter/BUILD
+++ b/utils/treesitter/BUILD
@@ -27,3 +27,39 @@ cc_test(
         ":treesitter",
     ],
 )
+
+filegroup(
+    name = "string_testdata",
+    srcs = glob(
+        ["testdata/string/*.carbon"],
+        exclude = ["testdata/string/fail_*.carbon"],
+    ),
+)
+
+filegroup(
+    name = "string_fail_testdata",
+    srcs = glob(["testdata/string/fail_*.carbon"]),
+)
+
+cc_test(
+    name = "string_tests",
+    srcs = ["test_runner.cpp"],
+    args = ["$(locations :string_testdata)"],
+    data = [":string_testdata"],
+    deps = [
+        ":treesitter",
+    ],
+)
+
+cc_test(
+    name = "string_fail_tests",
+    srcs = ["test_runner.cpp"],
+    args = ["$(locations :string_fail_testdata)"],
+    data = [":string_fail_testdata"],
+    env = {
+        "FAIL_TESTS": "1",
+    },
+    deps = [
+        ":treesitter",
+    ],
+)
diff --git a/utils/treesitter/grammar.js b/utils/treesitter/grammar.js
index 0a64ed400b14..090a0617153b 100644
--- a/utils/treesitter/grammar.js
+++ b/utils/treesitter/grammar.js
@@ -51,7 +51,7 @@ module.exports = grammar({
   extras: ($) => [/\s/, $.comment],
 
   // NOTE: This must match the order in src/scanner.c, names are not used for matching.
-  externals: ($) => [$.binary_star, $.postfix_star],
+  externals: ($) => [$.binary_star, $.postfix_star, $.string],
 
   rules: {
     source_file: ($) =>
@@ -63,7 +63,7 @@ module.exports = grammar({
 
     api_or_impl: ($) => choice('api', 'impl'),
 
-    library_path: ($) => seq('library', $.string_literal),
+    library_path: ($) => seq('library', $.string),
 
     package_directive: ($) =>
       seq('package', $.ident, optional($.library_path), $.api_or_impl, ';'),
@@ -124,34 +124,6 @@ module.exports = grammar({
       );
     },
 
-    _string_content: ($) => token.immediate(/[^\\"]+/),
-
-    escape_sequence: ($) =>
-      token.immediate(
-        seq(
-          '\\',
-          choice(
-            'n',
-            't',
-            'r',
-            "'",
-            '"',
-            '\\',
-            '0',
-            /x[0-9A-F]{2}/,
-            /u\{[0-9A-F]+\}/
-          )
-        )
-      ),
-
-    // TODO: multiline string
-    string_literal: ($) =>
-      seq(
-        '"',
-        repeat(choice($._string_content, $.escape_sequence)),
-        token.immediate('"')
-      ),
-
     array_literal: ($) =>
       seq(
         '[',
@@ -174,7 +146,7 @@ module.exports = grammar({
         $.bool_literal,
         $.numeric_literal,
         $.numeric_type_literal,
-        $.string_literal,
+        $.string,
         $.struct_literal,
         $.struct_type_literal
       ),
diff --git a/utils/treesitter/queries/highlights.scm b/utils/treesitter/queries/highlights.scm
index e6b906d93fb9..da90e3917f96 100644
--- a/utils/treesitter/queries/highlights.scm
+++ b/utils/treesitter/queries/highlights.scm
@@ -8,8 +8,7 @@
 (comment) @comment
 (builtin_type) @type.builtin
 (bool_literal) @constant.builtin
-(escape_sequence) @constant.character.escape
-(string_literal) @string
+(string) @string
 (numeric_literal) @constant.builtin
 (numeric_type_literal) @type.builtin
 
diff --git a/utils/treesitter/src/scanner.c b/utils/treesitter/src/scanner.c
index b2c6665251ac..36d885029f80 100644
--- a/utils/treesitter/src/scanner.c
+++ b/utils/treesitter/src/scanner.c
@@ -7,6 +7,7 @@
 enum TokenType {
   BINARY_STAR,
   POSTFIX_STAR,
+  STRING,
 };
 
 // our scanner is stateless
@@ -44,6 +45,22 @@ static bool token_allowed_after_binary_operator(char c) {
 
 static bool is_whitespace(char c) { return c == ' ' || c == '\n'; }
 
+static void advance(struct TSLexer* lexer) {
+  lexer->advance(lexer, /* skip= */ false);
+}
+
+static int eat_count(struct TSLexer* lexer, char ch, int count) {
+  int matched = 0;
+  while (matched != count) {
+    if (lexer->lookahead != ch) {
+      break;
+    }
+    advance(lexer);
+    matched++;
+  }
+  return matched;
+}
+
 // https://tree-sitter.github.io/tree-sitter/creating-parsers#external-scanners
 //
 // > If a token in the externals array is valid at a given position in the
@@ -54,8 +71,7 @@ static bool is_whitespace(char c) { return c == ' ' || c == '\n'; }
 // > fallbacks to the internal lexing mechanism.
 bool tree_sitter_carbon_external_scanner_scan(
     __attribute__((unused)) void* payload,
-    __attribute__((unused)) TSLexer* lexer,
-    __attribute__((unused)) const bool* valid_symbols) {
+    __attribute__((unused)) TSLexer* lexer, const bool* valid_symbols) {
   // skip past whitespace if any
   bool whitespace = false;
   while (is_whitespace(lexer->lookahead)) {
@@ -63,25 +79,97 @@ bool tree_sitter_carbon_external_scanner_scan(
     lexer->advance(lexer, /* skip= */ true);
   }
 
-  // if any other symbol than *, fallback to treesitter internal lexer
-  if (lexer->lookahead != '*') {
-    return false;
-  }
+  if (lexer->lookahead == '*' &&
+      (valid_symbols[BINARY_STAR] || valid_symbols[POSTFIX_STAR])) {
+    // move to past the *, add * to current token
+    lexer->advance(lexer, /* skip= */ false);
 
-  // move to past the *, add * to current token
-  lexer->advance(lexer, /* skip= */ false);
-
-  // https://github.com/carbon-language/carbon-lang/blob/trunk/docs/design/lexical_conventions/symbolic_tokens.md
-  if (is_whitespace(lexer->lookahead) && whitespace) {
-    // foo * bar
-    lexer->result_symbol = BINARY_STAR;
-  } else if (!whitespace &&
-             token_allowed_after_binary_operator(lexer->lookahead)) {
-    // foo*bar or foo*(bar)
-    lexer->result_symbol = BINARY_STAR;
-  } else {
-    // foo*
-    lexer->result_symbol = POSTFIX_STAR;
+    // https://github.com/carbon-language/carbon-lang/blob/trunk/docs/design/lexical_conventions/symbolic_tokens.md
+    if (is_whitespace(lexer->lookahead) && whitespace) {
+      // foo * bar
+      lexer->result_symbol = BINARY_STAR;
+    } else if (!whitespace &&
+               token_allowed_after_binary_operator(lexer->lookahead)) {
+      // foo*bar or foo*(bar)
+      lexer->result_symbol = BINARY_STAR;
+    } else {
+      // foo*
+      lexer->result_symbol = POSTFIX_STAR;
+    }
+    return true;
+  } else if ((lexer->lookahead == '#' || lexer->lookahead == '\'' ||
+              lexer->lookahead == '\"') &&
+             valid_symbols[STRING]) {
+    lexer->result_symbol = STRING;
+    int hash_count = 0;
+    while (lexer->lookahead == '#') {
+      advance(lexer);
+      hash_count++;
+    }
+    if (lexer->lookahead == '\'') {
+      if (eat_count(lexer, '\'', 3) != 3) {
+        // lexer state is ignored on return false
+        return false;
+      }
+      while (!lexer->eof(lexer)) {
+        // ''' must be on its own line.
+        // so look for \n *'''#{hash_count}
+        // we can ignore escapes
+        if (lexer->lookahead == '\n') {
+          advance(lexer);
+          while (lexer->lookahead == ' ') {
+            advance(lexer);
+          }
+          if (eat_count(lexer, '\'', 3) != 3) {
+            // treat less than 3 `'`s as normal characters
+            continue;
+          }
+          if (eat_count(lexer, '#', hash_count) == hash_count) {
+            // end of string
+            return true;
+          } else {
+            // treat as normal characters
+            continue;
+          }
+        } else {
+          // skip not new lines
+          advance(lexer);
+        }
+      }
+    } else if (lexer->lookahead == '"') {
+      advance(lexer);
+      while (!lexer->eof(lexer)) {
+        if (lexer->lookahead == '\\') {
+          advance(lexer);
+          if (eat_count(lexer, '#', hash_count) == hash_count) {
+            // treat next character as not special
+            // but \n is not allowed in simple string
+            if (lexer->lookahead != '\n') {
+              advance(lexer);
+            }
+          } else {
+            // not an escape
+            continue;
+          }
+        } else if (lexer->lookahead == '"') {
+          advance(lexer);
+          if (eat_count(lexer, '#', hash_count) == hash_count) {
+            // end of string
+            return true;
+          } else {
+            continue;
+          }
+        } else if (lexer->lookahead == '\n') {
+          // new line is not allowed in simple string
+          return false;
+        } else {
+          advance(lexer);
+        }
+      }
+    } else {
+      // # not followed by ' or "
+      return false;
+    }
   }
-  return true;
+  return false;
 }
diff --git a/utils/treesitter/test_runner.cpp b/utils/treesitter/test_runner.cpp
index e70b5b151443..eb3751dd26ec 100644
--- a/utils/treesitter/test_runner.cpp
+++ b/utils/treesitter/test_runner.cpp
@@ -5,6 +5,7 @@
 #include <tree_sitter/api.h>
 #include <tree_sitter/parser.h>
 
+#include <cstdlib>
 #include <filesystem>
 #include <fstream>
 #include <iostream>
@@ -35,7 +36,9 @@ auto main(int argc, char** argv) -> int {
   auto* parser = ts_parser_new();
   ts_parser_set_language(parser, tree_sitter_carbon());
 
-  std::vector<std::string> failed;
+  bool fail_tests = std::getenv("FAIL_TESTS") != nullptr;
+
+  std::vector<std::string> incorrect;
   for (int i = 1; i < argc; i++) {
     std::string file_path = argv[i];
     std::string source = ReadFile(file_path);
@@ -48,19 +51,27 @@ auto main(int argc, char** argv) -> int {
     char* node_debug = ts_node_string(root);
 
     std::cout << file_path << ":\n" << node_debug << "\n";
-    if (has_error) {
-      failed.push_back(file_path);
+    if (has_error ^ fail_tests) {
+      incorrect.push_back(file_path);
     }
 
     free(node_debug);
     ts_tree_delete(tree);
   }
   ts_parser_delete(parser);
-  for (const auto& file : failed) {
-    std::cout << "FAILED " << file << "\n";
+  for (const auto& file : incorrect) {
+    if (fail_tests) {
+      std::cout << "INCORRECTLY PASSING " << file << "\n";
+    } else {
+      std::cout << "FAILED " << file << "\n";
+    }
   }
-  if (!failed.empty()) {
-    std::cout << failed.size() << " tests failing.\n";
+  if (!incorrect.empty()) {
+    if (fail_tests) {
+      std::cout << incorrect.size() << " tests incorrectly passing.\n";
+    } else {
+      std::cout << incorrect.size() << " tests failing.\n";
+    }
     return 1;
   }
 }
diff --git a/utils/treesitter/testdata/string/block_inside_quotes.carbon b/utils/treesitter/testdata/string/block_inside_quotes.carbon
new file mode 100644
index 000000000000..0052e9776cb4
--- /dev/null
+++ b/utils/treesitter/testdata/string/block_inside_quotes.carbon
@@ -0,0 +1,8 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = '''
+  '' ''
+  ' ' '
+''';
diff --git a/utils/treesitter/testdata/string/fail_block_not_enough_quotes.carbon b/utils/treesitter/testdata/string/fail_block_not_enough_quotes.carbon
new file mode 100644
index 000000000000..f23ea1f67f8e
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_block_not_enough_quotes.carbon
@@ -0,0 +1,7 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = ''
+  hello
+  '';
diff --git a/utils/treesitter/testdata/string/fail_block_single_quote.carbon b/utils/treesitter/testdata/string/fail_block_single_quote.carbon
new file mode 100644
index 000000000000..d5fd8aa99b3c
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_block_single_quote.carbon
@@ -0,0 +1,7 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = '
+  single quote
+';
diff --git a/utils/treesitter/testdata/string/fail_block_unclosed_string.carbon b/utils/treesitter/testdata/string/fail_block_unclosed_string.carbon
new file mode 100644
index 000000000000..f9edc323fe73
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_block_unclosed_string.carbon
@@ -0,0 +1,6 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var x: String = '''
+unclosed string
diff --git a/utils/treesitter/testdata/string/fail_newline.carbon b/utils/treesitter/testdata/string/fail_newline.carbon
new file mode 100644
index 000000000000..55b78ee2fa00
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_newline.carbon
@@ -0,0 +1,6 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var x: String = "new
+line";
diff --git a/utils/treesitter/testdata/string/fail_raw_block_more_hash_tags_on_left.carbon b/utils/treesitter/testdata/string/fail_raw_block_more_hash_tags_on_left.carbon
new file mode 100644
index 000000000000..a1b2d5df668b
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_raw_block_more_hash_tags_on_left.carbon
@@ -0,0 +1,7 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = ##'''
+  error: there are more #s on the left than the right.
+'''#;
diff --git a/utils/treesitter/testdata/string/fail_raw_block_more_hash_tags_on_right.carbon b/utils/treesitter/testdata/string/fail_raw_block_more_hash_tags_on_right.carbon
new file mode 100644
index 000000000000..48c4950d35d1
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_raw_block_more_hash_tags_on_right.carbon
@@ -0,0 +1,7 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = #'''
+  error: there are more #s on the right than the left.
+'''##;
diff --git a/utils/treesitter/testdata/string/fail_raw_block_quotes_not_on_own_line.carbon b/utils/treesitter/testdata/string/fail_raw_block_quotes_not_on_own_line.carbon
new file mode 100644
index 000000000000..534a0e8f5bc0
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_raw_block_quotes_not_on_own_line.carbon
@@ -0,0 +1,6 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = #'''
+  error: closing not on own line '''#;
diff --git a/utils/treesitter/testdata/string/fail_raw_more_hash_tags_on_left.carbon b/utils/treesitter/testdata/string/fail_raw_more_hash_tags_on_left.carbon
new file mode 100644
index 000000000000..b9b140edb2b5
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_raw_more_hash_tags_on_left.carbon
@@ -0,0 +1,5 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = ##"str"#;
diff --git a/utils/treesitter/testdata/string/fail_raw_more_hash_tags_on_right.carbon b/utils/treesitter/testdata/string/fail_raw_more_hash_tags_on_right.carbon
new file mode 100644
index 000000000000..ddc5b2697ab4
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_raw_more_hash_tags_on_right.carbon
@@ -0,0 +1,5 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = "str"#;
diff --git a/utils/treesitter/testdata/string/fail_simple_escaped_newline.carbon b/utils/treesitter/testdata/string/fail_simple_escaped_newline.carbon
new file mode 100644
index 000000000000..ad6f07452724
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_simple_escaped_newline.carbon
@@ -0,0 +1,6 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: String = "hello\
+world";
diff --git a/utils/treesitter/testdata/string/fail_unclosed_string.carbon b/utils/treesitter/testdata/string/fail_unclosed_string.carbon
new file mode 100644
index 000000000000..b4d274f282a4
--- /dev/null
+++ b/utils/treesitter/testdata/string/fail_unclosed_string.carbon
@@ -0,0 +1,5 @@
+// Part of the Carbon Language project, under the Apache License v2.0 with LLVM
+// Exceptions. See /LICENSE for license information.
+// SPDX-License-Identifier: Apache-2.0 WITH LLVM-exception
+
+var s: "