diff --git a/CHANGELOG.md b/CHANGELOG.md
index 6288550c8244..206b23a96ae2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -37,7 +37,6 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Added
 
-- Add `rgb` and `hsl` color helpers for CSS variables ([#7665](https://github.com/tailwindlabs/tailwindcss/pull/7665))
 - Support PostCSS `Document` nodes ([#7291](https://github.com/tailwindlabs/tailwindcss/pull/7291))
 - Add `text-start` and `text-end` utilities ([#6656](https://github.com/tailwindlabs/tailwindcss/pull/6656))
 - Support customizing class name when using `darkMode: 'class'` ([#5800](https://github.com/tailwindlabs/tailwindcss/pull/5800))
@@ -54,6 +53,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Add opacity support when referencing colors with `theme` function ([#8416](https://github.com/tailwindlabs/tailwindcss/pull/8416))
 - Add `postcss-import` support to the CLI ([#8437](https://github.com/tailwindlabs/tailwindcss/pull/8437))
 - Add `optional` variant ([#8486](https://github.com/tailwindlabs/tailwindcss/pull/8486))
+- Add `<alpha-value>` placeholder support for custom colors ([#8501](https://github.com/tailwindlabs/tailwindcss/pull/8501))
 
 ## [3.0.24] - 2022-04-12
 
diff --git a/src/corePlugins.js b/src/corePlugins.js
index 053ca1910a7e..f1ad4a823d24 100644
--- a/src/corePlugins.js
+++ b/src/corePlugins.js
@@ -1988,6 +1988,10 @@ export let corePlugins = {
 
       let ringOpacityDefault = theme('ringOpacity.DEFAULT', '0.5')
 
+      if (!theme('ringColor')?.DEFAULT) {
+        return `rgb(147 197 253 / ${ringOpacityDefault})`
+      }
+
       return withAlphaValue(
         theme('ringColor')?.DEFAULT,
         ringOpacityDefault,
diff --git a/src/lib/evaluateTailwindFunctions.js b/src/lib/evaluateTailwindFunctions.js
index bfeea5a52009..2b755394cbd0 100644
--- a/src/lib/evaluateTailwindFunctions.js
+++ b/src/lib/evaluateTailwindFunctions.js
@@ -6,6 +6,7 @@ import { normalizeScreens } from '../util/normalizeScreens'
 import buildMediaQuery from '../util/buildMediaQuery'
 import { toPath } from '../util/toPath'
 import { withAlphaValue } from '../util/withAlphaVariable'
+import { parseColorFormat } from '../util/pluginUtils'
 
 function isObject(input) {
   return typeof input === 'object' && input !== null
@@ -181,6 +182,7 @@ export default function ({ tailwindConfig: config }) {
       }
 
       if (alpha !== undefined) {
+        value = parseColorFormat(value)
         value = withAlphaValue(value, alpha, value)
       }
 
diff --git a/src/util/pluginUtils.js b/src/util/pluginUtils.js
index f3214df467a0..61a401822bf1 100644
--- a/src/util/pluginUtils.js
+++ b/src/util/pluginUtils.js
@@ -95,9 +95,19 @@ function splitAlpha(modifier) {
   return [modifier.slice(0, slashIdx), modifier.slice(slashIdx + 1)]
 }
 
+export function parseColorFormat(value) {
+  if (typeof value === 'string' && value.includes('<alpha-value>')) {
+    let oldValue = value
+
+    return ({ opacityValue = 1 }) => oldValue.replace('<alpha-value>', opacityValue)
+  }
+
+  return value
+}
+
 export function asColor(modifier, options = {}, { tailwindConfig = {} } = {}) {
   if (options.values?.[modifier] !== undefined) {
-    return options.values?.[modifier]
+    return parseColorFormat(options.values?.[modifier])
   }
 
   let [color, alpha] = splitAlpha(modifier)
@@ -110,6 +120,8 @@ export function asColor(modifier, options = {}, { tailwindConfig = {} } = {}) {
       return undefined
     }
 
+    normalizedColor = parseColorFormat(normalizedColor)
+
     if (isArbitraryValue(alpha)) {
       return withAlphaValue(normalizedColor, alpha.slice(1, -1))
     }
diff --git a/src/util/resolveConfig.js b/src/util/resolveConfig.js
index f4808cf687f5..5472da08876f 100644
--- a/src/util/resolveConfig.js
+++ b/src/util/resolveConfig.js
@@ -8,7 +8,9 @@ import { toPath } from './toPath'
 import { normalizeConfig } from './normalizeConfig'
 import isPlainObject from './isPlainObject'
 import { cloneDeep } from './cloneDeep'
+import { parseColorFormat } from './pluginUtils'
 import { withAlphaValue } from './withAlphaVariable'
+import toColorValue from './toColorValue'
 
 function isFunction(input) {
   return typeof input === 'function'
@@ -67,36 +69,6 @@ const configUtils = {
         {}
       )
   },
-  rgb(property) {
-    if (!property.startsWith('--')) {
-      throw new Error(
-        'The rgb() helper requires a custom property name to be passed as the first argument.'
-      )
-    }
-
-    return ({ opacityValue }) => {
-      if (opacityValue === undefined || opacityValue === 1) {
-        return `rgb(var(${property}) / 1.0)`
-      }
-
-      return `rgb(var(${property}) / ${opacityValue})`
-    }
-  },
-  hsl(property) {
-    if (!property.startsWith('--')) {
-      throw new Error(
-        'The hsl() helper requires a custom property name to be passed as the first argument.'
-      )
-    }
-
-    return ({ opacityValue }) => {
-      if (opacityValue === undefined || opacityValue === 1) {
-        return `hsl(var(${property}) / 1)`
-      }
-
-      return `hsl(var(${property}) / ${opacityValue})`
-    }
-  },
 }
 
 function value(valueToResolve, ...args) {
@@ -215,7 +187,9 @@ function resolveFunctionKeys(object) {
 
       if (val !== undefined) {
         if (path.alpha !== undefined) {
-          return withAlphaValue(val, path.alpha)
+          let normalized = parseColorFormat(val)
+
+          return withAlphaValue(normalized, path.alpha, toColorValue(normalized))
         }
 
         if (isPlainObject(val)) {
@@ -229,8 +203,6 @@ function resolveFunctionKeys(object) {
     return defaultValue
   }
 
-  // colors.red.500/50
-
   Object.assign(resolvePath, {
     theme: resolvePath,
     ...configUtils,
diff --git a/src/util/withAlphaVariable.js b/src/util/withAlphaVariable.js
index 00ed2be9740e..15aedb73b66d 100644
--- a/src/util/withAlphaVariable.js
+++ b/src/util/withAlphaVariable.js
@@ -5,7 +5,7 @@ export function withAlphaValue(color, alphaValue, defaultValue) {
     return color({ opacityValue: alphaValue })
   }
 
-  let parsed = parseColor(color)
+  let parsed = parseColor(color, { loose: true })
 
   if (parsed === null) {
     return defaultValue
diff --git a/tests/evaluateTailwindFunctions.test.js b/tests/evaluateTailwindFunctions.test.js
index ecadb6edcb51..d14e95e85ce3 100644
--- a/tests/evaluateTailwindFunctions.test.js
+++ b/tests/evaluateTailwindFunctions.test.js
@@ -982,11 +982,11 @@ test('Theme function can extract alpha values for colors (7)', () => {
 
   return runFull(input, {
     theme: {
-      colors: ({ rgb }) => ({
+      colors: {
         blue: {
-          500: rgb('--foo'),
+          500: 'rgb(var(--foo) / <alpha-value>)',
         },
-      }),
+      },
     },
   }).then((result) => {
     expect(result.css).toMatchCss(output)
@@ -1009,11 +1009,11 @@ test('Theme function can extract alpha values for colors (8)', () => {
 
   return runFull(input, {
     theme: {
-      colors: ({ rgb }) => ({
+      colors: {
         blue: {
-          500: rgb('--foo'),
+          500: 'rgb(var(--foo) / <alpha-value>)',
         },
-      }),
+      },
 
       opacity: {
         myalpha: '50%',
diff --git a/tests/opacity.test.js b/tests/opacity.test.js
index 18b43ec01a00..38ea4ab44142 100644
--- a/tests/opacity.test.js
+++ b/tests/opacity.test.js
@@ -96,7 +96,7 @@ test('colors defined as functions work when opacity plugins are disabled', () =>
   })
 })
 
-it('can use rgb helper when defining custom properties for colors (opacity plugins enabled)', () => {
+it('can use <alpha-value> defining custom properties for colors (opacity plugins enabled)', () => {
   let config = {
     content: [
       {
@@ -117,9 +117,9 @@ it('can use rgb helper when defining custom properties for colors (opacity plugi
       },
     ],
     theme: {
-      colors: ({ rgb }) => ({
-        primary: rgb('--color-primary'),
-      }),
+      colors: {
+        primary: 'rgb(var(--color-primary) / <alpha-value>)',
+      },
     },
   }
 
@@ -192,9 +192,9 @@ it('can use rgb helper when defining custom properties for colors (opacity plugi
       },
     ],
     theme: {
-      colors: ({ rgb }) => ({
-        primary: rgb('--color-primary'),
-      }),
+      colors: {
+        primary: 'rgb(var(--color-primary) / <alpha-value>)',
+      },
     },
     corePlugins: {
       backgroundOpacity: false,
@@ -269,9 +269,9 @@ it('can use hsl helper when defining custom properties for colors (opacity plugi
       },
     ],
     theme: {
-      colors: ({ hsl }) => ({
-        primary: hsl('--color-primary'),
-      }),
+      colors: {
+        primary: 'hsl(var(--color-primary) / <alpha-value>)',
+      },
     },
   }
 
@@ -344,9 +344,9 @@ it('can use hsl helper when defining custom properties for colors (opacity plugi
       },
     ],
     theme: {
-      colors: ({ hsl }) => ({
-        primary: hsl('--color-primary'),
-      }),
+      colors: {
+        primary: 'hsl(var(--color-primary) / <alpha-value>)',
+      },
     },
     corePlugins: {
       backgroundOpacity: false,
@@ -400,34 +400,6 @@ it('can use hsl helper when defining custom properties for colors (opacity plugi
   })
 })
 
-it('the rgb helper throws when not passing custom properties', () => {
-  let config = {
-    theme: {
-      colors: ({ rgb }) => ({
-        primary: rgb('anything else'),
-      }),
-    },
-  }
-
-  return expect(run('@tailwind utilities', config)).rejects.toThrow(
-    'The rgb() helper requires a custom property name to be passed as the first argument.'
-  )
-})
-
-it('the hsl helper throws when not passing custom properties', () => {
-  let config = {
-    theme: {
-      colors: ({ hsl }) => ({
-        primary: hsl('anything else'),
-      }),
-    },
-  }
-
-  return expect(run('@tailwind utilities', config)).rejects.toThrow(
-    'The hsl() helper requires a custom property name to be passed as the first argument.'
-  )
-})
-
 test('Theme function in JS can apply alpha values to colors (1)', () => {
   let input = css`
     @tailwind utilities;
@@ -611,11 +583,11 @@ test('Theme function in JS can apply alpha values to colors (7)', () => {
     content: [{ raw: html`text-foo` }],
     corePlugins: { textOpacity: false },
     theme: {
-      colors: ({ rgb }) => ({
+      colors: {
         blue: {
-          500: rgb('--foo'),
+          500: 'rgb(var(--foo) / <alpha-value>)',
         },
-      }),
+      },
       extend: {
         textColor: ({ theme }) => ({
           foo: theme('colors.blue.500 / var(--my-alpha)'),
@@ -659,3 +631,100 @@ test('Theme function prefers existing values in config', () => {
     expect(result.warnings().length).toBe(0)
   })
 })
+
+it('should be possible to use an <alpha-value> as part of the color definition', () => {
+  let config = {
+    content: [
+      {
+        raw: html` <div class="bg-primary"></div> `,
+      },
+    ],
+    corePlugins: ['backgroundColor', 'backgroundOpacity'],
+    theme: {
+      colors: {
+        primary: 'rgb(var(--color-primary) / <alpha-value>)',
+      },
+    },
+  }
+
+  return run('@tailwind utilities', config).then((result) => {
+    expect(result.css).toMatchCss(css`
+      .bg-primary {
+        --tw-bg-opacity: 1;
+        background-color: rgb(var(--color-primary) / var(--tw-bg-opacity));
+      }
+    `)
+  })
+})
+
+it('should be possible to use an <alpha-value> as part of the color definition with an opacity modifiers', () => {
+  let config = {
+    content: [
+      {
+        raw: html` <div class="bg-primary/50"></div> `,
+      },
+    ],
+    corePlugins: ['backgroundColor', 'backgroundOpacity'],
+    theme: {
+      colors: {
+        primary: 'rgb(var(--color-primary) / <alpha-value>)',
+      },
+    },
+  }
+
+  return run('@tailwind utilities', config).then((result) => {
+    expect(result.css).toMatchCss(css`
+      .bg-primary\/50 {
+        background-color: rgb(var(--color-primary) / 0.5);
+      }
+    `)
+  })
+})
+
+it('should be possible to use an <alpha-value> as part of the color definition with an opacity modifiers', () => {
+  let config = {
+    content: [
+      {
+        raw: html` <div class="bg-primary"></div> `,
+      },
+    ],
+    corePlugins: ['backgroundColor'],
+    theme: {
+      colors: {
+        primary: 'rgb(var(--color-primary) / <alpha-value>)',
+      },
+    },
+  }
+
+  return run('@tailwind utilities', config).then((result) => {
+    expect(result.css).toMatchCss(css`
+      .bg-primary {
+        background-color: rgb(var(--color-primary) / 1);
+      }
+    `)
+  })
+})
+
+it('should be possible to use <alpha-value> inside arbitrary values', () => {
+  let config = {
+    content: [
+      {
+        raw: html` <div class="bg-[rgb(var(--color-primary)/<alpha-value>)]/50"></div> `,
+      },
+    ],
+    corePlugins: ['backgroundColor', 'backgroundOpacity'],
+    theme: {
+      colors: {
+        primary: 'rgb(var(--color-primary) / <alpha-value>)',
+      },
+    },
+  }
+
+  return run('@tailwind utilities', config).then((result) => {
+    expect(result.css).toMatchCss(css`
+      .bg-\[rgb\(var\(--color-primary\)\/\<alpha-value\>\)\]\/50 {
+        background-color: rgb(var(--color-primary) / 0.5);
+      }
+    `)
+  })
+})