diff --git a/src/lint/linter/__tests__/xhpast/undeclared-variables.lint-test b/src/lint/linter/__tests__/xhpast/undeclared-variables.lint-test
--- a/src/lint/linter/__tests__/xhpast/undeclared-variables.lint-test
+++ b/src/lint/linter/__tests__/xhpast/undeclared-variables.lint-test
@@ -179,6 +179,12 @@
     echo $z;
   };
 }
+
+function some_func($x, $y) {
+  $func = function ($z) use ($x) {
+    echo "$x/$y/$z";
+  };
+}
 ~~~~~~~~~~
 warning:9:3
 error:28:3
@@ -201,3 +207,4 @@
 error:164:9
 error:171:5
 error:178:10
+error:185:14
diff --git a/src/lint/linter/xhpast/rules/ArcanistUndeclaredVariableXHPASTLinterRule.php b/src/lint/linter/xhpast/rules/ArcanistUndeclaredVariableXHPASTLinterRule.php
--- a/src/lint/linter/xhpast/rules/ArcanistUndeclaredVariableXHPASTLinterRule.php
+++ b/src/lint/linter/xhpast/rules/ArcanistUndeclaredVariableXHPASTLinterRule.php
@@ -68,6 +68,7 @@
       ) + array_fill_keys($this->getSuperGlobalNames(), 0);
       $declaration_tokens = array();
       $exclude_tokens = array();
+      $exclude_strings = array();
       $vars = array();
 
       // First up, find all the different kinds of declarations, as explained
@@ -175,6 +176,16 @@
         foreach ($func_decl->selectDescendantsOfType('n_VARIABLE') as $var) {
           $exclude_tokens[$var->getID()] = true;
         }
+
+        foreach (array('n_STRING_SCALAR', 'n_HEREDOC') as $type) {
+          foreach ($func_decl->selectDescendantsOfType($type) as $string) {
+            $exclude_strings[$string->getID()] = array();
+
+            foreach ($string->getStringVariables() as $offset => $var) {
+               $exclude_strings[$string->getID()][$var] = true;
+            }
+          }
+        }
       }
 
       // Now we have every declaration except foreach(), handled below. Build
@@ -316,6 +327,10 @@
       foreach (array('n_STRING_SCALAR', 'n_HEREDOC') as $type) {
         foreach ($body->selectDescendantsOfType($type) as $string) {
           foreach ($string->getStringVariables() as $offset => $var) {
+            if (isset($exclude_strings[$string->getID()][$var])) {
+              continue;
+            }
+
             $all[$string->getOffset() + $offset - 1] = '$'.$var;
           }
         }