diff --git a/django/templatetags/i18n.py b/django/templatetags/i18n.py
index 7c29f63c59..984f122eac 100644
--- a/django/templatetags/i18n.py
+++ b/django/templatetags/i18n.py
@@ -150,8 +150,14 @@ class BlockTranslateNode(Node):
             else:
                 result = translation.ugettext(singular)
         default_value = settings.TEMPLATE_STRING_IF_INVALID
-        render_value = lambda v: render_value_in_context(
-            context.get(v, default_value), context)
+
+        def render_value(key):
+            if key in context:
+                val = context[key]
+            else:
+                val = default_value % key if '%s' in default_value else default_value
+            return render_value_in_context(val, context)
+
         data = dict((v, render_value(v)) for v in vars)
         context.pop()
         try:
diff --git a/tests/template_tests/tests.py b/tests/template_tests/tests.py
index 4dcf0281a4..8e73e91693 100644
--- a/tests/template_tests/tests.py
+++ b/tests/template_tests/tests.py
@@ -1507,6 +1507,8 @@ class TemplateTests(TestCase):
             'invalidstr04_2': ('{% if var|default:"Foo" %}Yes{% else %}No{% endif %}', {}, 'Yes'),
             'invalidstr05': ('{{ var }}', {}, ('', ('INVALID %s', 'var'))),
             'invalidstr06': ('{{ var.prop }}', {'var': {}}, ('', ('INVALID %s', 'var.prop'))),
+            'invalidstr07': ('{% load i18n %}{% blocktrans %}{{ var }}{% endblocktrans %}',
+                             {}, ('', ('INVALID %s', 'var'))),
 
             ### MULTILINE #############################################################