diff --git a/src/compiler/codegen/events.js b/src/compiler/codegen/events.js
index 20f8b3b1f6a..3d61123e166 100644
--- a/src/compiler/codegen/events.js
+++ b/src/compiler/codegen/events.js
@@ -24,7 +24,7 @@ const modifierCode = {
 export function genHandlers (events: ASTElementHandlers, native?: boolean): string {
   let res = native ? 'nativeOn:{' : 'on:{'
   for (const name in events) {
-    res += `"${name}":${genHandler(events[name])},`
+    res += `"${name}":v.${genHandler(events[name])},`
   }
   return res.slice(0, -1) + '}'
 }
diff --git a/src/compiler/codegen/index.js b/src/compiler/codegen/index.js
index 4fd183b5dab..a6c43c19d95 100644
--- a/src/compiler/codegen/index.js
+++ b/src/compiler/codegen/index.js
@@ -30,11 +30,11 @@ export function generate (
   transforms = pluckModuleFunction(options.modules, 'transformCode')
   dataGenFns = pluckModuleFunction(options.modules, 'genData')
   platformDirectives = options.directives || {}
-  const code = ast ? genElement(ast) : '_h("div")'
+  const code = ast ? genElement(ast) : 'v._h("div")'
   staticRenderFns = prevStaticRenderFns
   onceCount = prevOnceCount
   return {
-    render: `with(this){return ${code}}`,
+    render: `var v = this; return ${code}`,
     staticRenderFns: currentStaticRenderFns
   }
 }
@@ -61,7 +61,7 @@ function genElement (el: ASTElement): string {
       const data = el.plain ? undefined : genData(el)
 
       const children = el.inlineTemplate ? null : genChildren(el)
-      code = `_h('${el.tag}'${
+      code = `v._h('${el.tag}'${
         data ? `,${data}` : '' // data
       }${
         children ? `,${children}` : '' // children
@@ -78,7 +78,7 @@ function genElement (el: ASTElement): string {
 // hoist static sub-trees out
 function genStatic (el: ASTElement): string {
   el.staticProcessed = true
-  staticRenderFns.push(`with(this){return ${genElement(el)}}`)
+  staticRenderFns.push(`var v = this; return ${genElement(el)}`)
   return `_m(${staticRenderFns.length - 1}${el.staticInFor ? ',true' : ''})`
 }
 
@@ -168,7 +168,7 @@ function genData (el: ASTElement): string {
   }
   // DOM props
   if (el.props) {
-    data += `domProps:{${genProps(el.props)}},`
+    data += `domProps:{${genProps(el.props, true)}},`
   }
   // event handlers
   if (el.events) {
@@ -264,16 +264,20 @@ function genSlot (el: ASTElement): string {
 // componentName is el.component, take it as argument to shun flow's pessimistic refinement
 function genComponent (componentName, el): string {
   const children = el.inlineTemplate ? null : genChildren(el)
-  return `_h(${componentName},${genData(el)}${
+  return `v._h(${componentName},${genData(el)}${
     children ? `,${children}` : ''
   })`
 }
 
-function genProps (props: Array<{ name: string, value: string }>): string {
+function genProps (props: Array<{ name: string, value: string }>, prefix): string {
   let res = ''
   for (let i = 0; i < props.length; i++) {
     const prop = props[i]
-    res += `"${prop.name}":${prop.value},`
+    if (prefix) {
+      res += `"${prop.name}":v.${prop.value},`
+    } else {
+      res += `"${prop.name}":${prop.value},`
+    }
   }
   return res.slice(0, -1)
 }
diff --git a/src/compiler/parser/text-parser.js b/src/compiler/parser/text-parser.js
index 34f1e018e9d..db05536e986 100644
--- a/src/compiler/parser/text-parser.js
+++ b/src/compiler/parser/text-parser.js
@@ -31,7 +31,7 @@ export function parseText (
     }
     // tag token
     const exp = parseFilters(match[1].trim())
-    tokens.push(`_s(${exp})`)
+    tokens.push(`v._s(${exp})`)
     lastIndex = index + match[0].length
   }
   if (lastIndex < text.length) {
diff --git a/src/platforms/web/compiler/directives/html.js b/src/platforms/web/compiler/directives/html.js
index 58569d8e47e..76d40ca1842 100644
--- a/src/platforms/web/compiler/directives/html.js
+++ b/src/platforms/web/compiler/directives/html.js
@@ -4,6 +4,7 @@ import { addProp } from 'compiler/helpers'
 
 export default function html (el: ASTElement, dir: ASTDirective) {
   if (dir.value) {
-    addProp(el, 'innerHTML', `_s(${dir.value})`)
+    // `v.` prefix is added in genHandlers
+    addProp(el, 'innerHTML', `_s(v.${dir.value})`)
   }
 }
diff --git a/src/platforms/web/compiler/directives/model.js b/src/platforms/web/compiler/directives/model.js
index 2ae6b711452..2e1f626dece 100644
--- a/src/platforms/web/compiler/directives/model.js
+++ b/src/platforms/web/compiler/directives/model.js
@@ -141,7 +141,7 @@ function genDefaultModel (
       `File inputs are read only. Use a v-on:change listener instead.`
     )
   }
-  addProp(el, 'value', isNative ? `_s(${value})` : `(${value})`)
+  addProp(el, 'value', isNative ? `v._s(v.${value})` : `(v.${value})`)
   addHandler(el, event, code, null, true)
 }
 
diff --git a/src/platforms/web/compiler/directives/text.js b/src/platforms/web/compiler/directives/text.js
index 1af914f8ea0..1246c45c330 100644
--- a/src/platforms/web/compiler/directives/text.js
+++ b/src/platforms/web/compiler/directives/text.js
@@ -4,6 +4,7 @@ import { addProp } from 'compiler/helpers'
 
 export default function text (el: ASTElement, dir: ASTDirective) {
   if (dir.value) {
-    addProp(el, 'textContent', `_s(${dir.value})`)
+    // `v.` prefix is added in genHandlers
+    addProp(el, 'textContent', `_s(v.${dir.value})`)
   }
 }