diff --git a/CHANGELOG.md b/CHANGELOG.md
index 4640505a..a0a99974 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,7 @@
 
 ### Changed
 
+- **aiken-lang**: Fix validator's else handler generation. See [#1015](https://github.com/aiken-lang/aiken/issues/1015) @KtorZ
 - **aiken-lang**: Fix underflow in error message reported by the validator arity. See [#1013](https://github.com/aiken-lang/aiken/issues/1013) @KtorZ
 - **aiken-lang**: Fix list-pattern needlessly formatting over multiple lines. @KtorZ
 - **aiken-lang**: Fix formatter on long alternative patterns spanning over multiple lines. @KtorZ
diff --git a/crates/aiken-lang/src/ast.rs b/crates/aiken-lang/src/ast.rs
index 677dcf17..02675c0e 100644
--- a/crates/aiken-lang/src/ast.rs
+++ b/crates/aiken-lang/src/ast.rs
@@ -714,25 +714,30 @@ impl TypedValidator {
                     .chain(std::iter::once(&self.fallback).map(|fallback| {
                         let arg = fallback.arguments.first().unwrap();
 
-                        let then = &[
-                            TypedExpr::let_(
-                                TypedExpr::local_var(var_context, arg.tipo.clone(), arg.location),
-                                arg.get_variable_name().map(TypedPattern::var).unwrap_or(
-                                    TypedPattern::Discard {
-                                        name: var_context.to_string(),
-                                        location: arg.location,
-                                    },
+                        let then = match arg.get_variable_name() {
+                            Some(arg_name) => TypedExpr::sequence(&[
+                                TypedExpr::let_(
+                                    TypedExpr::local_var(
+                                        var_context,
+                                        arg.tipo.clone(),
+                                        arg.location,
+                                    ),
+                                    TypedPattern::var(arg_name),
+                                    arg.tipo.clone(),
+                                    arg.location,
                                 ),
-                                arg.tipo.clone(),
-                                arg.location,
-                            ),
-                            fallback.body.clone(),
-                        ];
+                                fallback.body.clone(),
+                            ]),
+                            None => fallback.body.clone(),
+                        };
 
                         TypedClause {
                             location: Span::empty(),
-                            pattern: TypedPattern::var(var_context),
-                            then: TypedExpr::sequence(then),
+                            pattern: TypedPattern::Discard {
+                                name: "_".to_string(),
+                                location: arg.location,
+                            },
+                            then,
                         }
                     }))
                     .collect(),
diff --git a/examples/acceptance_tests/script_context/v3/ctx/simple_else/resolved_inputs.template b/examples/acceptance_tests/script_context/v3/ctx/simple_else/resolved_inputs.template
new file mode 100644
index 00000000..9408beef
--- /dev/null
+++ b/examples/acceptance_tests/script_context/v3/ctx/simple_else/resolved_inputs.template
@@ -0,0 +1,6 @@
+[
+  { 0: h'70{{ simple_else.simple_else.else.hash }}'
+  , 1: 1000000000
+  , 2: [1, 24(h'd87980')]
+  }
+]
diff --git a/examples/acceptance_tests/script_context/v3/ctx/simple_else/tx.template b/examples/acceptance_tests/script_context/v3/ctx/simple_else/tx.template
new file mode 100644
index 00000000..ac9168ff
--- /dev/null
+++ b/examples/acceptance_tests/script_context/v3/ctx/simple_else/tx.template
@@ -0,0 +1,33 @@
+[
+    { 0:
+      [ [h'0000000000000000000000000000000000000000000000000000000000000000', 0]
+      ]
+
+    , 1:
+      []
+
+    , 2: 42
+
+    , 11: h'FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF'
+
+    , 13:
+      [ [h'0000000000000000000000000000000000000000000000000000000000000000', 0]
+      ]
+
+    , 16:
+      [ h'6000000000000000000000000000000000000000000000000000000000', 1000000000
+      ]
+
+    , 17: 1
+    },
+
+    { 5: [[0, 0, 121([]), [1000000, 100000000]]]
+
+    , 7: [h'{{ simple_else.simple_else.else.cbor }}']
+
+    },
+
+    true,
+
+    null
+]
diff --git a/examples/acceptance_tests/script_context/v3/validators/simple_else.ak b/examples/acceptance_tests/script_context/v3/validators/simple_else.ak
new file mode 100644
index 00000000..5183b078
--- /dev/null
+++ b/examples/acceptance_tests/script_context/v3/validators/simple_else.ak
@@ -0,0 +1,95 @@
+use aiken/collection/dict
+use cardano/address.{Address, Script}
+use cardano/assets
+use cardano/script_context.{ScriptContext, Spending}
+use cardano/transaction.{
+  InlineDatum, Input, Output, OutputReference, ScriptPurpose, Spend, Transaction,
+}
+
+validator simple_else {
+  else(ctx: ScriptContext) {
+    expect Spending(output_ref, _) = ctx.info
+
+    let transaction = ctx.transaction
+
+    assert_transaction_id(transaction.id)
+
+    assert_script_info(output_ref)
+
+    assert_inputs(transaction.inputs)
+
+    expect [] = transaction.outputs
+
+    expect [] = transaction.reference_inputs
+
+    expect [] = transaction.extra_signatories
+
+    expect 42 == transaction.fee
+
+    assert_redeemers(transaction.redeemers)
+
+    expect [] == dict.to_pairs(transaction.datums)
+
+    True
+  }
+}
+
+fn assert_transaction_id(id: ByteArray) {
+  expect
+    #"c6fbd346681a8f8337f6b3e51e6ec973f1509367eabc3a44c849af58a1d8471b" == id
+  Void
+}
+
+fn assert_script_info(info: OutputReference) {
+  expect
+    OutputReference {
+      transaction_id: #"0000000000000000000000000000000000000000000000000000000000000000",
+      output_index: 0,
+    } == info
+  Void
+}
+
+fn assert_inputs(inputs: List<Input>) {
+  expect [
+    Input {
+      output_reference: OutputReference { transaction_id, output_index: 0 },
+      output: Output {
+        address,
+        value: resolved_input_value,
+        datum: InlineDatum(_),
+        reference_script: None,
+      },
+    },
+  ] = inputs
+
+  expect
+    transaction_id == #"0000000000000000000000000000000000000000000000000000000000000000"
+
+  expect resolved_input_value == assets.from_lovelace(1000000000)
+
+  expect Address { payment_credential: Script(_), stake_credential: None } =
+    address
+
+  Void
+}
+
+fn assert_redeemers(redeemers: Pairs<ScriptPurpose, Data>) {
+  expect
+    [
+      Pair(
+        Spend(
+          OutputReference {
+            transaction_id: #"0000000000000000000000000000000000000000000000000000000000000000",
+            output_index: 0,
+          },
+        ),
+        void(),
+      ),
+    ] == redeemers
+  Void
+}
+
+fn void() -> Data {
+  let void: Data = Void
+  void
+}