diff --git a/js/js.dart-ast/src/com/google/dart/compiler/util/AstUtil.java b/js/js.dart-ast/src/com/google/dart/compiler/util/AstUtil.java
index f5935d59343..b1e31056eaa 100644
--- a/js/js.dart-ast/src/com/google/dart/compiler/util/AstUtil.java
+++ b/js/js.dart-ast/src/com/google/dart/compiler/util/AstUtil.java
@@ -52,4 +52,12 @@ public final class AstUtil {
 
         return nodesCopy;
     }
+
+    @NotNull
+    public static JsFunctionScope toFunctionScope(JsScope scope) {
+        assert scope instanceof JsFunctionScope: "JsFunctionScope type is expected, but "
+                                                 + scope.getClass().getSimpleName() + " is found";
+
+        return (JsFunctionScope) scope;
+    }
 }
diff --git a/js/js.parser/src/com/google/gwt/dev/js/JsParser.java b/js/js.parser/src/com/google/gwt/dev/js/JsParser.java
index 353bd2edf9b..1f70baa2315 100644
--- a/js/js.parser/src/com/google/gwt/dev/js/JsParser.java
+++ b/js/js.parser/src/com/google/gwt/dev/js/JsParser.java
@@ -19,6 +19,8 @@ import com.google.dart.compiler.backend.js.ast.*;
 import com.google.dart.compiler.backend.js.ast.JsLiteral.JsBooleanLiteral;
 import com.google.dart.compiler.common.SourceInfo;
 import com.google.gwt.dev.js.rhino.*;
+import org.jetbrains.annotations.NotNull;
+import org.jetbrains.annotations.Nullable;
 
 import java.io.IOException;
 import java.io.Reader;
@@ -26,6 +28,8 @@ import java.util.ArrayList;
 import java.util.List;
 import java.util.Stack;
 
+import static com.google.dart.compiler.util.AstUtil.toFunctionScope;
+
 /**
  * Parses JavaScript source.
  */
@@ -375,7 +379,28 @@ public class JsParser {
     }
 
     private JsBreak mapBreak(Node breakNode) {
-        return new JsBreak();
+        return new JsBreak(getTargetLabel(breakNode));
+    }
+
+    @Nullable
+    private JsNameRef getTargetLabel(@NotNull Node statementWithLabel) {
+        int type = statementWithLabel.getType();
+        if (type != TokenStream.BREAK && type != TokenStream.CONTINUE) {
+            String tokenTypeName = TokenStream.tokenToName(statementWithLabel.getType());
+            throw new AssertionError("Unexpected node type with label: " + tokenTypeName);
+        }
+
+        Node label = statementWithLabel.getFirstChild();
+        if (label == null) return null;
+
+        String identifier = label.getString();
+        assert identifier != null: "If label exists identifier should not be null";
+
+        JsFunctionScope scope = toFunctionScope(getScope());
+        JsName labelName = scope.findLabel(identifier);
+        assert labelName != null: "Unknown label name: " + identifier;
+
+        return labelName.makeRef();
     }
 
     private JsInvocation mapCall(Node callNode) throws JsParserException {
@@ -416,7 +441,7 @@ public class JsParser {
     }
 
     private JsContinue mapContinue(Node contNode) {
-        return new JsContinue();
+        return new JsContinue(getTargetLabel(contNode));
     }
 
     private JsStatement mapDebuggerStatement(Node node) {
@@ -721,10 +746,12 @@ public class JsParser {
 
     private JsLabel mapLabel(Node labelNode) throws JsParserException {
         String fromName = labelNode.getFirstChild().getString();
-        JsName toName = getScope().declareName(fromName);
+        JsFunctionScope scope = toFunctionScope(getScope());
+        JsName toName = scope.enterLabel(fromName);
         Node fromStmt = labelNode.getFirstChild().getNext();
         JsLabel toLabel = new JsLabel(toName);
         toLabel.setStatement(mapStatement(fromStmt));
+        scope.exitLabel();
         return toLabel;
     }