diff --git a/src/main/java/com/vaadin/sass/internal/parser/function/AdjustColorFunctionGenerator.java b/src/main/java/com/vaadin/sass/internal/parser/function/AdjustColorFunctionGenerator.java
index 4bd0f5a5..2b2c97f6 100644
--- a/src/main/java/com/vaadin/sass/internal/parser/function/AdjustColorFunctionGenerator.java
+++ b/src/main/java/com/vaadin/sass/internal/parser/function/AdjustColorFunctionGenerator.java
@@ -151,7 +151,7 @@ private LexicalUnitImpl getColor(LexicalUnitImpl function,
         }
         LexicalUnitImpl result = (LexicalUnitImpl) resultItem;
         if (!ColorUtil.isColor(result) && !ColorUtil.isRgba(result)
-                && !ColorUtil.isHsla(result)) {
+                && !ColorUtil.isHsla(result) && !ColorUtil.isTransparent(result)) {
             throw new ParseException(
                     "The color argument must represent a valid color", function);
         }
diff --git a/src/main/java/com/vaadin/sass/internal/parser/function/AlphaFunctionGenerator.java b/src/main/java/com/vaadin/sass/internal/parser/function/AlphaFunctionGenerator.java
index d102364a..cbbb5996 100644
--- a/src/main/java/com/vaadin/sass/internal/parser/function/AlphaFunctionGenerator.java
+++ b/src/main/java/com/vaadin/sass/internal/parser/function/AlphaFunctionGenerator.java
@@ -42,6 +42,8 @@ protected SassListItem computeForArgumentList(LexicalUnitImpl function,
             ActualArgumentList parameterList = color.getParameterList();
             SassListItem last = parameterList.get(parameterList.size() - 1);
             opacity = ((LexicalUnitImpl) last).getFloatValue();
+        } else if (ColorUtil.isTransparent(color)) {
+            opacity = 0f;
         }
         return LexicalUnitImpl.createNumber(function.getLineNumber(),
                 function.getColumnNumber(), opacity);
@@ -52,7 +54,7 @@ private void checkParameters(LexicalUnitImpl function,
         LexicalUnitImpl color = (LexicalUnitImpl) getParam(args, "color");
         if (!(color instanceof LexicalUnitImpl)
                 || (!ColorUtil.isColor(color) && !ColorUtil.isRgba(color) && !ColorUtil
-                        .isHsla(color))) {
+                        .isHsla(color)) && !ColorUtil.isTransparent(color)) {
             throw new ParseException("The function "
                     + function.getFunctionName()
                     + " requires a color as its first parameter", function);
diff --git a/src/main/java/com/vaadin/sass/internal/parser/function/ColorComponentFunctionGenerator.java b/src/main/java/com/vaadin/sass/internal/parser/function/ColorComponentFunctionGenerator.java
index b92d5c7c..4ad2026c 100644
--- a/src/main/java/com/vaadin/sass/internal/parser/function/ColorComponentFunctionGenerator.java
+++ b/src/main/java/com/vaadin/sass/internal/parser/function/ColorComponentFunctionGenerator.java
@@ -80,7 +80,7 @@ private void checkParameters(LexicalUnitImpl function,
         }
         LexicalUnitImpl firstParam = (LexicalUnitImpl) arg;
         if (!ColorUtil.isColor(firstParam) && !ColorUtil.isRgba(firstParam)
-                && !ColorUtil.isHsla(firstParam)) {
+                && !ColorUtil.isHsla(firstParam) && !ColorUtil.isTransparent(firstParam)) {
             throw new ParseException("The parameter of the function "
                     + function.getFunctionName() + " must be a valid color",
                     function);
diff --git a/src/main/java/com/vaadin/sass/internal/util/ColorUtil.java b/src/main/java/com/vaadin/sass/internal/util/ColorUtil.java
index 7790ca82..414425ca 100644
--- a/src/main/java/com/vaadin/sass/internal/util/ColorUtil.java
+++ b/src/main/java/com/vaadin/sass/internal/util/ColorUtil.java
@@ -35,6 +35,7 @@ public class ColorUtil {
             .compile("#([0-9a-fA-F]{3}|[0-9a-fA-F]{6})");
     private static Map<String, String> colorNameToHex = new HashMap<String, String>();
     private static Map<String, String> hexToColorName = new HashMap<String, String>();
+    private static String transparent = "transparent";
 
     static {
         colorNameToHex.put("aqua", "#00ffff");
@@ -168,6 +169,18 @@ public static boolean isHslColor(LexicalUnitImpl unit) {
                 && unit.getParameterList().size() == 3;
     }
 
+    /**
+     * Returns true if the lexical unit represents the transparent keyword, false
+     * otherwise.
+     *
+     * @param unit lexical unit
+     * @return true if unit represents the transparent color
+     */
+    public static boolean isTransparent(LexicalUnitImpl unit) {
+        return unit.getLexicalUnitType() == LexicalUnit.SAC_IDENT
+                && transparent.equals(unit.getStringValue());
+    }
+
     /**
      * Returns the alpha component of the color. For colors that do not have an
      * explicit alpha component, returns 1.
@@ -177,7 +190,9 @@ public static boolean isHslColor(LexicalUnitImpl unit) {
      * @return The alpha component of color.
      */
     public static float getAlpha(LexicalUnitImpl color) {
-        if (isHsla(color) || isRgba(color)) {
+        if (isTransparent(color)) {
+            return 0;
+        } else if (isHsla(color) || isRgba(color)) {
             ActualArgumentList params = color.getParameterList();
             return params.get(params.size() - 1).getContainedValue()
                     .getFloatValue();
@@ -198,7 +213,10 @@ public static float getAlpha(LexicalUnitImpl color) {
      * @return RGB components or null if not a color
      */
     public static int[] colorToRgb(LexicalUnitImpl color) {
-        if (isRgba(color)) {
+        if (isTransparent(color)) {
+            // as per https://www.w3.org/TR/css-color-3/#transparent-def
+            return new int[] { 0, 0, 0, 0 };
+        } else if (isRgba(color)) {
             if (color.getParameterList().size() == 2
                     && color.getParameterList().get(0) instanceof LexicalUnitImpl) {
                 return colorToRgb((LexicalUnitImpl) color.getParameterList()
diff --git a/src/test/resources/automatic/css/adjust-color.css b/src/test/resources/automatic/css/adjust-color.css
index 2f76698b..07c7adfa 100644
--- a/src/test/resources/automatic/css/adjust-color.css
+++ b/src/test/resources/automatic/css/adjust-color.css
@@ -37,4 +37,9 @@
 .hsla {
   rb: rgba(41, 112, 127, 0.5);
   sla: rgba(45, 134, 134, 0.25);
+}
+
+.transparent {
+  t1: transparent;
+  t2: rgba(0, 0, 5, 0);
 }
\ No newline at end of file
diff --git a/src/test/resources/automatic/css/color-component-functions.css b/src/test/resources/automatic/css/color-component-functions.css
index 49997553..e30c8160 100644
--- a/src/test/resources/automatic/css/color-component-functions.css
+++ b/src/test/resources/automatic/css/color-component-functions.css
@@ -41,4 +41,16 @@
     alpha: 1;
     opacity: 1;
     alpha2: 0.5;
+}
+
+.transparent{
+    red: 0;
+    green: 0;
+    blue: 0;
+    alpha: 0;
+    opacity: 0;
+    colorA: rgba(0, 0, 0, 0);
+    colorB: transparent;
+    colorC: rgba(0, 0, 0, 0);
+    colorD: rgba(255, 255, 255, 0);
 }
\ No newline at end of file
diff --git a/src/test/resources/automatic/css/scale-color.css b/src/test/resources/automatic/css/scale-color.css
index 131fc352..1ff1f72c 100644
--- a/src/test/resources/automatic/css/scale-color.css
+++ b/src/test/resources/automatic/css/scale-color.css
@@ -33,4 +33,9 @@
   rb: rgba(75, 112, 133, 0.5);
   sla: rgba(36, 129, 129, 0.375);
   ga: rgba(16, 56, 112, 0.75);
+}
+
+.transparent {
+  t1: transparent;
+  t2: rgba(0, 0, 12, 0);
 }
\ No newline at end of file
diff --git a/src/test/resources/automatic/scss/adjust-color.scss b/src/test/resources/automatic/scss/adjust-color.scss
index 0c18b8d7..b47c33b0 100644
--- a/src/test/resources/automatic/scss/adjust-color.scss
+++ b/src/test/resources/automatic/scss/adjust-color.scss
@@ -51,4 +51,9 @@
     $hsla: hsla(180, 75%, 25%, 0.5);
     rb: adjust-color($hsla, $red: 25, $blue: 15);
     sla: adjust-color($hsla, $saturation: -25%, $lightness: 10%, $alpha: -0.25);
+}
+
+.transparent {
+    t1: adjust-color(transparent);
+    t2: adjust-color(transparent, $blue: 5);
 }
\ No newline at end of file
diff --git a/src/test/resources/automatic/scss/color-component-functions.scss b/src/test/resources/automatic/scss/color-component-functions.scss
index 12e2ed85..92b2235c 100644
--- a/src/test/resources/automatic/scss/color-component-functions.scss
+++ b/src/test/resources/automatic/scss/color-component-functions.scss
@@ -52,4 +52,17 @@ $blue:3;
     alpha: alpha($hslcolor);
     opacity: opacity($hslcolor);
     alpha2: alpha($hslacolor);
+}
+
+.transparent{
+    $transparentcolor: transparent;
+    red: red($transparentcolor);
+    green: green($transparentcolor);
+    blue: blue($transparentcolor);
+    alpha: alpha($transparentcolor);
+    opacity: opacity($transparentcolor);
+    colorA: rgba(0,0,0,0);
+    colorB: $transparentcolor;
+    colorC: darken($transparentcolor, 50);
+    colorD: lighten($transparentcolor, 100);
 }
\ No newline at end of file
diff --git a/src/test/resources/automatic/scss/scale-color.scss b/src/test/resources/automatic/scss/scale-color.scss
index 473c1c87..b9da30fd 100644
--- a/src/test/resources/automatic/scss/scale-color.scss
+++ b/src/test/resources/automatic/scss/scale-color.scss
@@ -44,4 +44,9 @@
     rb: scale-color($hsla, $red: 25%, $blue: 15%);
     sla: scale-color($hsla, $saturation: -25%, $lightness: 10%, $alpha: -25%);
     ga: scale-color($color: $hsla, $green: -50%, $alpha: 50%);
+}
+
+.transparent {
+    t1: scale-color(transparent);
+    t2: scale-color(transparent, $blue: 5%);
 }
\ No newline at end of file