diff --git a/src/erl.rs b/src/erl.rs
index 897545cdcdd..a9c373e12e7 100644
--- a/src/erl.rs
+++ b/src/erl.rs
@@ -118,7 +118,7 @@ pub fn records(module: &TypedModule) -> Vec<(&str, String)> {
 
 pub fn record_definition(name: &str, fields: &[&str]) -> String {
     let name = &name.to_snake_case();
-    let escaped_name = if is_reserved_word(name) {
+    let escaped_name = if is_erlang_reserved_word(name) {
         format!("'{}'", name)
     } else {
         format!("{}", name)
@@ -126,7 +126,7 @@ pub fn record_definition(name: &str, fields: &[&str]) -> String {
     use std::fmt::Write;
     let mut buffer = format!("-record({}, {{", escaped_name);
     for field in fields.iter().intersperse(&", ") {
-        let escaped_field = if is_reserved_word(field) {
+        let escaped_field = if is_erlang_reserved_word(field) {
             format!("'{}'", field)
         } else {
             format!("{}", field)
@@ -265,7 +265,7 @@ fn atom(value: String) -> Document {
 
     match &*value {
         // Escape because of keyword collision
-        value if is_reserved_word(value) => format!("'{}'", value).to_doc(),
+        value if is_erlang_reserved_word(value) => format!("'{}'", value).to_doc(),
 
         // No need to escape
         _ if RE.is_match(&value) => value.to_doc(),
@@ -1232,7 +1232,7 @@ fn external_fun(name: &str, module: &str, fun: &str, arity: usize) -> Document {
         .nest(INDENT)
 }
 
-fn is_reserved_word(name: &str) -> bool {
+pub fn is_erlang_reserved_word(name: &str) -> bool {
     return match name {
         "!" | "receive" | "bnot" | "div" | "rem" | "band" | "bor" | "bxor" | "bsl" | "bsr"
         | "not" | "and" | "or" | "xor" | "orelse" | "andalso" | "when" | "end" | "fun" | "try"
diff --git a/src/error.rs b/src/error.rs
index 366e8d0739b..ae7cd4a8470 100644
--- a/src/error.rs
+++ b/src/error.rs
@@ -139,6 +139,18 @@ pub enum Error {
         command: String,
         err: Option<std::io::ErrorKind>,
     },
+
+    InvalidProjectName {
+        name: String,
+        reason: InvalidProjectNameReason,
+    },
+}
+
+#[derive(Debug, PartialEq)]
+pub enum InvalidProjectNameReason {
+    Format,
+    ErlangReservedWord,
+    GleamReservedWord,
 }
 
 #[derive(Debug, PartialEq)]
@@ -223,6 +235,29 @@ impl Error {
             .expect("error pretty buffer write space before");
 
         match self {
+            Error::InvalidProjectName { name, reason } => {
+                let diagnostic = ProjectErrorDiagnostic {
+                    title: "Invalid project name".to_string(),
+                    label: format!(
+                        "We were not able to create your project as `{}` is
+{}
+
+Please try again with a different project name.",
+                        name,
+                        match reason {
+                            InvalidProjectNameReason::ErlangReservedWord =>
+                                "a reserved word in Erlang.",
+                            InvalidProjectNameReason::GleamReservedWord =>
+                                "a reserved word in Gleam.",
+                            InvalidProjectNameReason::Format =>
+                                "does not have the correct format. Project names must start
+with a lowercase latter and may only contain lowercase letters
+and underscores.",
+                        }
+                    ),
+                };
+                write_project(buffer, diagnostic);
+            }
             Error::ShellCommand { command, err: None } => {
                 let diagnostic = ProjectErrorDiagnostic {
                     title: "Shell command failure".to_string(),
diff --git a/src/new.rs b/src/new.rs
index 0bd6790abb5..c24c02d8829 100644
--- a/src/new.rs
+++ b/src/new.rs
@@ -1,4 +1,4 @@
-use crate::error::{Error, FileIOAction, FileKind, GleamExpect};
+use crate::error::{Error, FileIOAction, FileKind, GleamExpect, InvalidProjectNameReason};
 use serde::{Deserialize, Serialize};
 use std::fs::File;
 use std::io::Write;
@@ -20,14 +20,7 @@ pub fn create(
     path: Option<String>,
     version: &'static str,
 ) -> Result<(), Error> {
-    if !regex::Regex::new("^[a-z_]+$")
-        .gleam_expect("new name regex could not be compiled")
-        .is_match(&name)
-    {
-        // TODO
-        println!("error: Project name may only contain lowercase letters and underscores");
-        std::process::exit(1);
-    }
+    let name = validate_name(name)?;
 
     let description = description.unwrap_or_else(|| String::from("A Gleam program"));
     let path = path.unwrap_or_else(|| name.clone());
@@ -510,3 +503,27 @@ fn app_rebar_config(name: &str) -> String {
         name
     ))
 }
+
+fn validate_name(name: String) -> Result<String, Error> {
+    if crate::erl::is_erlang_reserved_word(name.as_str()) {
+        Err(Error::InvalidProjectName {
+            name,
+            reason: InvalidProjectNameReason::ErlangReservedWord,
+        })
+    } else if crate::parser::is_gleam_reserved_word(name.as_str()) {
+        Err(Error::InvalidProjectName {
+            name,
+            reason: InvalidProjectNameReason::GleamReservedWord,
+        })
+    } else if !regex::Regex::new("^[a-z_]+$")
+        .gleam_expect("new name regex could not be compiled")
+        .is_match(&name)
+    {
+        Err(Error::InvalidProjectName {
+            name,
+            reason: InvalidProjectNameReason::Format,
+        })
+    } else {
+        Ok(name)
+    }
+}
diff --git a/src/parser.rs b/src/parser.rs
index 015b89b007f..c23a4169d8a 100644
--- a/src/parser.rs
+++ b/src/parser.rs
@@ -497,3 +497,10 @@ pub fn make_call(
         }),
     }
 }
+
+pub fn is_gleam_reserved_word(s: &str) -> bool {
+    match s {
+        "pub" | "fn" | "import" | "as" | "type" | "extern" | "case" | "try" | "assert" => true,
+        _ => false,
+    }
+}