diff --git a/src/analyze.cpp b/src/analyze.cpp
index b55c5251e4..a626649323 100644
--- a/src/analyze.cpp
+++ b/src/analyze.cpp
@@ -454,8 +454,8 @@ static TypeTableEntry * analyze_expression(CodeGen *g, ImportTableEntry *import,
                         buf_sprintf("variable initialization is unreachable"));
                 }
 
-                if (implicit_type == nullptr) {
-                    add_node_error(g, node, buf_sprintf("initial values are required for variable declaration"));
+                if (implicit_type == nullptr && variable_declaration->is_const) {
+                    add_node_error(g, node, buf_sprintf("variables must have initial values or be declared 'mut'."));
                 }
 
                 TypeTableEntry *type = explicit_type != nullptr ? explicit_type : implicit_type;
diff --git a/src/codegen.cpp b/src/codegen.cpp
index be4d695279..e1a5525e37 100644
--- a/src/codegen.cpp
+++ b/src/codegen.cpp
@@ -526,14 +526,14 @@ static LLVMValueRef gen_expr(CodeGen *g, AstNode *node) {
                     variable->value_ref = gen_expr(g, node->data.variable_declaration.expr);
                     return nullptr;
                 } else {
+                    LLVMValueRef value;
                     if (node->data.variable_declaration.expr) {
-                        LLVMValueRef value = gen_expr(g, node->data.variable_declaration.expr);
-
-                        add_debug_source_node(g, node);
-                        return LLVMBuildStore(g->builder, value, variable->value_ref);
+                        value = gen_expr(g, node->data.variable_declaration.expr);
                     } else {
-
+                        value = LLVMConstNull(variable->type->type_ref);
                     }
+                    add_debug_source_node(g, node);
+                    return LLVMBuildStore(g->builder, value, variable->value_ref);
                 }
             }
         case NodeTypeCastExpr:
diff --git a/test/run_tests.cpp b/test/run_tests.cpp
index 2f0243d5af..fac093670d 100644
--- a/test/run_tests.cpp
+++ b/test/run_tests.cpp
@@ -332,7 +332,7 @@ fn void_fun(a : i32, b : void, c : i32) {
 }
     )SOURCE", "OK\n");
 
-    add_simple_case("void parameters", R"SOURCE(
+    add_simple_case("mutable local variables", R"SOURCE(
 #link("c")
 extern {
     fn puts(s: *const u8) -> i32;
@@ -340,6 +340,9 @@ extern {
 }
 
 export fn _start() -> unreachable {
+    let mut zero : i32;
+    if (zero == 0) { puts("zero"); }
+
     let mut i = 0;
 loop_start:
     if i == 3 {
@@ -351,7 +354,7 @@ loop_start:
 done:
     exit(0);
 }
-    )SOURCE", "loop\nloop\nloop\n");
+    )SOURCE", "zero\nloop\nloop\nloop\n");
 }
 
 static void add_compile_failure_test_cases(void) {