diff --git a/doc/dune-files.rst b/doc/dune-files.rst
index 06221c85cbd3..8d09dcf0d0ff 100644
--- a/doc/dune-files.rst
+++ b/doc/dune-files.rst
@@ -75,9 +75,10 @@ dialect
 
          Specify the file extension used for this dialect.
 
-         The extension string must not contain any dots and be unique in a given
+         The extension string must not start with a dot and be unique in a given
          project (so that a given extension can be mapped back to a
-         corresponding dialect).
+         corresponding dialect). In Dune 3.8 and later, the extension string may
+         contain embedded dots (eg `cppo.ml`).
 
          This field is required.
 
diff --git a/src/dune_rules/dialect.ml b/src/dune_rules/dialect.ml
index cbe815918dbb..fac14e334455 100644
--- a/src/dune_rules/dialect.ml
+++ b/src/dune_rules/dialect.ml
@@ -77,10 +77,15 @@ let decode =
         (map
            ~f:(fun (loc, x) -> (loc, x, []))
            (located Action.decode_dune_file))
-    in
+    and+ syntax_ver = Syntax.get_exn Stanza.syntax in
     let extension =
-      if String.contains extension '.' then
-        User_error.raise ~loc [ Pp.textf "extension must not contain '.'" ];
+      if String.length extension > 0 && extension.[0] = '.' then
+        User_error.raise ~loc [ Pp.textf "extension must not start with a '.'" ];
+      let ver = (3, 8) in
+      if syntax_ver < ver && String.contains extension '.' then begin
+        let what = "the possibility of defining extensions with embedded dots" in
+        Syntax.Error.since loc Stanza.syntax ver ~what
+      end;
       "." ^ extension
     in
     { File_kind.kind; extension; preprocess; format }
diff --git a/test/blackbox-tests/test-cases/dialects/bad3.t/run.t b/test/blackbox-tests/test-cases/dialects/bad3.t/run.t
index 1eb6acbdcd2b..be25b618df76 100644
--- a/test/blackbox-tests/test-cases/dialects/bad3.t/run.t
+++ b/test/blackbox-tests/test-cases/dialects/bad3.t/run.t
@@ -2,5 +2,5 @@
   File "dune-project", line 5, characters 28-32:
   5 |  (implementation (extension .foo))
                                   ^^^^
-  Error: extension must not contain '.'
+  Error: extension must not start with a '.'
   [1]
diff --git a/test/blackbox-tests/test-cases/dialects/dots.t/cppo.ml b/test/blackbox-tests/test-cases/dialects/dots.t/cppo.ml
new file mode 100644
index 000000000000..e729c918f0b0
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dialects/dots.t/cppo.ml
@@ -0,0 +1,2 @@
+let () =
+  print_endline {|print_endline "Hello, World"|}
diff --git a/test/blackbox-tests/test-cases/dialects/dots.t/dune b/test/blackbox-tests/test-cases/dialects/dots.t/dune
new file mode 100644
index 000000000000..61867531c4ff
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dialects/dots.t/dune
@@ -0,0 +1,11 @@
+(executable
+ (name main)
+ (modules main))
+
+(executable
+ (name cppo)
+ (modules cppo))
+
+(rule
+ (alias show)
+ (action (cat main.cppo.ml.ml)))
diff --git a/test/blackbox-tests/test-cases/dialects/dots.t/dune-project.in b/test/blackbox-tests/test-cases/dialects/dots.t/dune-project.in
new file mode 100644
index 000000000000..2229acf9bc38
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dialects/dots.t/dune-project.in
@@ -0,0 +1,8 @@
+(dialect
+ (name cppo)
+ (implementation
+  (extension cppo.ml)
+  (preprocess (run ./cppo.exe %{input-file})))
+ (interface
+  (extension cppo.mli)
+  (preprocess (run ./cppo.exe %{input-file}))))
diff --git a/test/blackbox-tests/test-cases/dialects/dots.t/main.cppo.ml b/test/blackbox-tests/test-cases/dialects/dots.t/main.cppo.ml
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/test/blackbox-tests/test-cases/dialects/dots.t/main.mli b/test/blackbox-tests/test-cases/dialects/dots.t/main.mli
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/test/blackbox-tests/test-cases/dialects/dots.t/run.t b/test/blackbox-tests/test-cases/dialects/dots.t/run.t
new file mode 100644
index 000000000000..0d99bfffa8f2
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dialects/dots.t/run.t
@@ -0,0 +1,26 @@
+Test the (dialect ...) stanza inside the dune-project file.
+
+  $ { echo '(lang dune 3.7)'; cat dune-project.in; } >dune-project
+
+  $ dune build --display short
+  File "dune-project", line 5, characters 13-20:
+  5 |   (extension cppo.ml)
+                   ^^^^^^^
+  Error: the possibility of defining extensions with embedded dots is only
+  available since version 3.8 of the dune language. Please update your
+  dune-project file to have (lang dune 3.8).
+  [1]
+
+  $ { echo '(lang dune 3.8)'; cat dune-project.in; } >dune-project
+
+  $ dune build --display short
+        ocamlc .cppo.eobjs/byte/dune__exe__Cppo.{cmi,cmti}
+        ocamlc .main.eobjs/byte/dune__exe__Main.{cmi,cmti}
+      ocamlopt .cppo.eobjs/native/dune__exe__Cppo.{cmx,o}
+      ocamlopt cppo.exe
+          cppo main.cppo.ml.ml
+      ocamlopt .main.eobjs/native/dune__exe__Main.{cmx,o}
+      ocamlopt main.exe
+
+  $ dune build @show
+  print_endline "Hello, World"