diff --git a/src/languages/sqlite/sqlite.formatter.ts b/src/languages/sqlite/sqlite.formatter.ts
index b2115ea4b..26591c5a0 100644
--- a/src/languages/sqlite/sqlite.formatter.ts
+++ b/src/languages/sqlite/sqlite.formatter.ts
@@ -90,7 +90,19 @@ export const sqlite: DialectOptions = {
     ],
     identTypes: [`""-qq`, '``', '[]'],
     // https://www.sqlite.org/lang_expr.html#parameters
-    paramTypes: { positional: true, numbered: ['?'], named: [':', '@', '$'] },
+    // Note: the $-prefixed form follows Tcl variable syntax and may include
+    // one or more "::"-separated suffixes and an optional "(...)" trailer.
+    paramTypes: {
+      positional: true,
+      numbered: ['?'],
+      named: [':', '@'],
+      custom: [
+        {
+          regex: String.raw`\$[a-zA-Z_][a-zA-Z0-9_]*(?:::[a-zA-Z_][a-zA-Z0-9_]*)*(?:\([^)]*\))?`,
+          key: v => v.slice(1),
+        },
+      ],
+    },
     operators: ['%', '~', '&', '|', '<<', '>>', '==', '->', '->>', '||'],
   },
   formatOptions: {
diff --git a/test/sqlite.test.ts b/test/sqlite.test.ts
index 36057ab35..662e11e85 100644
--- a/test/sqlite.test.ts
+++ b/test/sqlite.test.ts
@@ -55,7 +55,46 @@ describe('SqliteFormatter', () => {
   supportsJoin(format);
   supportsSetOperations(format, ['UNION', 'UNION ALL', 'EXCEPT', 'INTERSECT']);
   supportsOperators(format, ['%', '~', '&', '|', '<<', '>>', '==', '->', '->>', '||']);
-  supportsParams(format, { positional: true, numbered: ['?'], named: [':', '$', '@'] });
+  supportsParams(format, { positional: true, numbered: ['?'], named: [':', '@'] });
+
+  // SQLite has its own Tcl-style $-parameter syntax that is handled as a custom
+  // param type rather than the default named-param prefix. See sqlite.formatter.ts.
+  describe('supports SQLite $-style (Tcl) named placeholders', () => {
+    it('recognizes $name placeholders', () => {
+      expect(format('SELECT $foo, $bar, $baz;')).toBe(dedent`
+        SELECT
+          $foo,
+          $bar,
+          $baz;
+      `);
+    });
+
+    it('recognizes $name(...) placeholders without inserting a space', () => {
+      expect(format('select $p(x=y);')).toBe(dedent`
+        select
+          $p(x=y);
+      `);
+    });
+
+    it('recognizes $name with :: suffix and (...) trailer', () => {
+      expect(format('SELECT $foo::bar(extra);')).toBe(dedent`
+        SELECT
+          $foo::bar(extra);
+      `);
+    });
+
+    it('replaces $name placeholders with param values', () => {
+      expect(
+        format(`WHERE name = $name AND age > $current_age;`, {
+          params: { name: "'John'", current_age: '10' },
+        })
+      ).toBe(dedent`
+        WHERE
+          name = 'John'
+          AND age > 10;
+      `);
+    });
+  });
   supportsWindow(format);
   supportsLimiting(format, { limit: true, offset: true });
   supportsDataTypeCase(format);