diff --git a/plutus-core/changelog.d/20260424_182803_yuriy.lazaryev_issue_7742_uplc_parser_large_case.md b/plutus-core/changelog.d/20260424_182803_yuriy.lazaryev_issue_7742_uplc_parser_large_case.md
new file mode 100644
index 00000000000..c206686cc2c
--- /dev/null
+++ b/plutus-core/changelog.d/20260424_182803_yuriy.lazaryev_issue_7742_uplc_parser_large_case.md
@@ -0,0 +1,12 @@
+### Changed
+
+- The UPLC/PLC/PIR textual parser now rejects unquoted identifiers that
+  contain a `-` anywhere other than as the terminal numeric unique-suffix
+  separator (e.g. `pubKeyHash-305478r71`, `foo-bar`, `foo-123-456`) with
+  a dedicated `InvalidIdentifier` diagnostic that points directly at the
+  offending name and shows the full bad text. Previously the same inputs
+  silently mis-parsed — the prefix was taken as a name plus unique-suffix
+  and the remainder was picked up as an adjacent term — which surfaced as
+  a confusing "unexpected '(' expecting ')'" message far from the real
+  site (see #7742). To use such a string as a name verbatim, wrap it in
+  backticks: `` `pubKeyHash-305478r71` ``.
diff --git a/plutus-core/plutus-core/src/PlutusCore/Error.hs b/plutus-core/plutus-core/src/PlutusCore/Error.hs
index 6c4692c1599..e9ee8e74e35 100644
--- a/plutus-core/plutus-core/src/PlutusCore/Error.hs
+++ b/plutus-core/plutus-core/src/PlutusCore/Error.hs
@@ -52,6 +52,12 @@ data ParserError
   = BuiltinTypeNotAStar !T.Text !SourcePos
   | UnknownBuiltinFunction !T.Text !SourcePos ![T.Text]
   | InvalidBuiltinConstant !T.Text !T.Text !SourcePos
+  | {-| An unquoted identifier that violates the grammar: a '-' appeared
+    anywhere other than as the separator of a terminal numeric unique-suffix
+    (e.g. @pubKeyHash-305478r71@, @foo-bar@, @foo-123-456@). The 'Text'
+    carries the full offending text as it appeared in the source, so the
+    user sees their own name back in the diagnostic. -}
+    InvalidIdentifier !T.Text !SourcePos
   deriving stock (Eq, Ord, Generic)
   deriving anyclass (NFData)
 
@@ -192,6 +198,18 @@ instance Pretty ParserError where
       <+> squotes (pretty s)
       <+> "at"
       <+> pretty loc
+  pretty (InvalidIdentifier txt loc) =
+    "Invalid identifier"
+      <+> squotes (pretty txt)
+      <+> "at"
+      <+> pretty loc
+      <> "."
+      <> hardline
+      <> "A '-' inside a name is the numeric unique-suffix separator and must be"
+      <+> "followed only by digits and a word boundary."
+      <> hardline
+      <> "To use this text as a name verbatim, quote it with backticks:"
+      <+> pretty ("`" <> txt <> "`")
 
 instance ShowErrorComponent ParserError where
   showErrorComponent = show . pretty
diff --git a/plutus-core/plutus-core/src/PlutusCore/Parser/ParserCommon.hs b/plutus-core/plutus-core/src/PlutusCore/Parser/ParserCommon.hs
index 18d3be7e2bc..eb3154059e7 100644
--- a/plutus-core/plutus-core/src/PlutusCore/Parser/ParserCommon.hs
+++ b/plutus-core/plutus-core/src/PlutusCore/Parser/ParserCommon.hs
@@ -13,6 +13,7 @@ import Control.Monad.Except
 import Control.Monad.Reader (ReaderT, ask, local, runReaderT)
 import Control.Monad.State (StateT, evalStateT)
 import Data.Map qualified as M
+import Data.Set qualified as Set
 import Data.Text (Text)
 import Data.Text qualified as Text
 import Text.Megaparsec hiding (ParseError, State, parse, some)
@@ -217,9 +218,33 @@ name = try $ parseUnquoted <|> parseQuoted
   where
     parseUnquoted :: Parser Name
     parseUnquoted = do
+      startOffset <- getOffset
+      startPos <- getSourcePos'
       _ <- lookAhead (satisfy isIdentifierStartingChar)
+      inputBefore <- getInput
       str <- takeWhileP (Just "identifier-unquoted") isIdentifierChar
-      Name str <$> uniqueSuffix str
+      u <- uniqueSuffix str
+      {- The parsed prefix is only a valid identifier if the next character is
+      a real word-boundary. If instead we see more identifier chars or another
+      '-', the user wrote something like `foo-bar` or `pubKeyHash-305478r71` —
+      the '-NNN' run we just treated as a unique-suffix was actually part of
+      their intended name (or they have a stray '-' at all). Fail with a
+      custom diagnostic that points at the whole offending identifier. -}
+      mBad <- optional (lookAhead (satisfy isNameExtensionChar))
+      case mBad of
+        Nothing -> pure (Name str u)
+        Just _ -> do
+          -- Consume the remainder so the reported text covers the full name.
+          _ <- takeWhileP Nothing isNameExtensionChar
+          inputAfter <- getInput
+          let consumed = Text.length inputBefore - Text.length inputAfter
+              fullText = Text.take consumed inputBefore
+          parseError $
+            FancyError startOffset $
+              Set.singleton (ErrorCustom (InvalidIdentifier fullText startPos))
+
+    isNameExtensionChar :: Char -> Bool
+    isNameExtensionChar c = isIdentifierChar c || c == '-'
 
     parseQuoted :: Parser Name
     parseQuoted = do
diff --git a/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-double-unique.golden b/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-double-unique.golden
new file mode 100644
index 00000000000..f851fa8de87
--- /dev/null
+++ b/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-double-unique.golden
@@ -0,0 +1,7 @@
+test:1:21:
+  |
+1 | (program 1.1.0 (lam foo-123-456 foo-123-456))
+  |                     ^
+Invalid identifier 'foo-123-456' at test:1:21.
+A '-' inside a name is the numeric unique-suffix separator and must be followed only by digits and a word boundary.
+To use this text as a name verbatim, quote it with backticks: `foo-123-456`
diff --git a/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-hyphen-letters.golden b/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-hyphen-letters.golden
new file mode 100644
index 00000000000..effdf9e6cb8
--- /dev/null
+++ b/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-hyphen-letters.golden
@@ -0,0 +1,7 @@
+test:1:21:
+  |
+1 | (program 1.1.0 (lam pubKeyHash-305478r71 (lam x x)))
+  |                     ^
+Invalid identifier 'pubKeyHash-305478r71' at test:1:21.
+A '-' inside a name is the numeric unique-suffix separator and must be followed only by digits and a word boundary.
+To use this text as a name verbatim, quote it with backticks: `pubKeyHash-305478r71`
diff --git a/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-hyphen-word.golden b/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-hyphen-word.golden
new file mode 100644
index 00000000000..0ed707dbbf1
--- /dev/null
+++ b/plutus-core/untyped-plutus-core/test/Parser/Golden/invalid-identifier-hyphen-word.golden
@@ -0,0 +1,7 @@
+test:1:21:
+  |
+1 | (program 1.1.0 (lam foo-bar foo-bar))
+  |                     ^
+Invalid identifier 'foo-bar' at test:1:21.
+A '-' inside a name is the numeric unique-suffix separator and must be followed only by digits and a word boundary.
+To use this text as a name verbatim, quote it with backticks: `foo-bar`
diff --git a/plutus-core/untyped-plutus-core/testlib/Generators/Spec.hs b/plutus-core/untyped-plutus-core/testlib/Generators/Spec.hs
index b6036a90b52..c2671111706 100644
--- a/plutus-core/untyped-plutus-core/testlib/Generators/Spec.hs
+++ b/plutus-core/untyped-plutus-core/testlib/Generators/Spec.hs
@@ -60,6 +60,9 @@ test_parsing =
         , propMissingConOperands
         , propInvalidKeyword
         , propBracketMismatch
+        , propInvalidIdentifierHyphenLetters
+        , propInvalidIdentifierHyphenWord
+        , propInvalidIdentifierDoubleUnique
         ]
     ]
 
@@ -241,6 +244,49 @@ propBracketMismatch =
     "bracket-mismatch"
     "(program 1.1.0 [(var x))"
 
+{- Note [Negative identifier-grammar tests]
+The parser's name grammar treats '-NNN' purely as the numeric unique-suffix:
+'foo-123' → Name "foo" (Unique 123). A '-' anywhere else in an identifier is
+not allowed by the unquoted grammar (see 'isIdentifierChar' in
+'PlutusCore.Name.Unique'). Several tools in the wild (e.g. Scalus 0.16.0's
+'toUplcOptimized') emit names like 'pubKeyHash-305478r71' that violate this,
+and today the parser mis-parses them in a way that surfaces as a confusing
+error hundreds of lines away from the offending name — see issue #7742.
+
+The goldens below freeze the *current* (unhelpful) error output so that a
+future diagnostic improvement shows up as an explicit golden-file diff.
+When the parser is taught to point at the bad name itself, accept the new
+goldens with 'scripts/regen-goldens.sh' (or '--accept'). -}
+
+{-| @pubKeyHash-305478r71@ — the exact shape Scalus 0.16.0 produces, inside a
+binder. Current behaviour: the parser eats @pubKeyHash-305478@ as name+unique,
+picks up @r71@ as the lam body, then fails far away on the next paren. -}
+propInvalidIdentifierHyphenLetters :: TestTree
+propInvalidIdentifierHyphenLetters =
+  testParseErrorGolden
+    "Invalid identifier: hyphen followed by digits then letters"
+    "invalid-identifier-hyphen-letters"
+    "(program 1.1.0 (lam pubKeyHash-305478r71 (lam x x)))"
+
+{-| @foo-bar@ — hyphen followed by non-digits. Current behaviour: the parser
+stops at '-' (it is not in 'isIdentifierChar'), takes @foo@ as the name, and
+then explodes on @-bar@ which is not a valid continuation anywhere. -}
+propInvalidIdentifierHyphenWord :: TestTree
+propInvalidIdentifierHyphenWord =
+  testParseErrorGolden
+    "Invalid identifier: hyphen followed by non-digits"
+    "invalid-identifier-hyphen-word"
+    "(program 1.1.0 (lam foo-bar foo-bar))"
+
+{-| @foo-123-456@ — ambiguous double '-NNN' run. Current behaviour: the first
+@-123@ wins as the unique, @-456@ is left over and fails the next check. -}
+propInvalidIdentifierDoubleUnique :: TestTree
+propInvalidIdentifierDoubleUnique =
+  testParseErrorGolden
+    "Invalid identifier: double unique-suffix"
+    "invalid-identifier-double-unique"
+    "(program 1.1.0 (lam foo-123-456 foo-123-456))"
+
 --------------------------------------------------------------------------------
 -- Helper Functions ------------------------------------------------------------