diff --git a/CHANGELOG.md b/CHANGELOG.md
index ea7a1ef5..c468a520 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -18,6 +18,7 @@
 - Better checking of absolute IRIs.
 - Terms that begin with a ':' are not considered absolute or compact IRIs.
 - Don't use terms with `"@prefix": false` or expanded term definitions to construct compact IRIs.
+- "@type" may be used as a term definition only if "@container": "@set".
 
 ### Removed
 - **BREAKING**: Remove callback API support. This includes removing support
diff --git a/lib/compact.js b/lib/compact.js
index 66369c18..501bd938 100644
--- a/lib/compact.js
+++ b/lib/compact.js
@@ -24,7 +24,8 @@ const {
   expandIri: _expandIri,
   getContextValue: _getContextValue,
   isKeyword: _isKeyword,
-  process: _processContext
+  process: _processContext,
+  processingMode: _processingMode
 } = require('./context');
 
 const {
@@ -220,7 +221,15 @@ api.compact = async ({
         // use keyword alias and add value
         const alias = api.compactIri(
           {activeCtx, iri: expandedProperty, relativeTo: {vocab: true}});
-        const isArray = _isArray(compactedValue) && expandedValue.length === 0;
+        const container = _getContextValue(
+          activeCtx, alias, '@container') || [];
+
+        // treat as array for @type if @container includes @set
+        const typeAsSet = isType &&
+          container.includes('@set') &&
+          _processingMode(activeCtx, 1.1);
+        const isArray =
+          typeAsSet || (_isArray(compactedValue) && expandedValue.length === 0);
         _addValue(rval, alias, compactedValue, {propertyIsArray: isArray});
         continue;
       }
diff --git a/lib/context.js b/lib/context.js
index bb33d82f..1d69a916 100644
--- a/lib/context.js
+++ b/lib/context.js
@@ -315,14 +315,30 @@ api.createTermDefinition = (
   // now defining term
   defined.set(term, false);
 
-  if(api.isKeyword(term)) {
+  // get context term value
+  let value;
+  if(localCtx.hasOwnProperty(term)) {
+    value = localCtx[term];
+  }
+
+  if(term === '@type' &&
+     _isObject(value) &&
+     value['@container'] === '@set' &&
+     api.processingMode(activeCtx, 1.1)) {
+
+    const validKeys = ['@container', '@id', '@protected'];
+    if(Object.keys(value).some(k => !validKeys.includes(k))) {
+      throw new JsonLdError(
+        'Invalid JSON-LD syntax; keywords cannot be overridden.',
+        'jsonld.SyntaxError',
+        {code: 'keyword redefinition', context: localCtx, term});
+    }
+  } else if(api.isKeyword(term)) {
     throw new JsonLdError(
       'Invalid JSON-LD syntax; keywords cannot be overridden.',
       'jsonld.SyntaxError',
       {code: 'keyword redefinition', context: localCtx, term});
-  }
-
-  if(term === '') {
+  } else if(term === '') {
     throw new JsonLdError(
       'Invalid JSON-LD syntax; a term cannot be an empty string.',
       'jsonld.SyntaxError',
@@ -337,12 +353,6 @@ api.createTermDefinition = (
     activeCtx.mappings.delete(term);
   }
 
-  // get context term value
-  let value;
-  if(localCtx.hasOwnProperty(term)) {
-    value = localCtx[term];
-  }
-
   // clear context entry
   if(value === null || (_isObject(value) && value['@id'] === null)) {
     activeCtx.mappings.set(term, null);
@@ -468,6 +478,9 @@ api.createTermDefinition = (
         // term is an absolute IRI
         mapping['@id'] = term;
       }
+    } else if(term == '@type') {
+      // Special case, were we've previously determined that container is @set
+      mapping['@id'] = term;
     } else {
       // non-IRIs *must* define @ids if @vocab is not available
       if(!('@vocab' in activeCtx)) {
diff --git a/tests/test-common.js b/tests/test-common.js
index 2129378c..eeea0989 100644
--- a/tests/test-common.js
+++ b/tests/test-common.js
@@ -32,9 +32,6 @@ const TEST_TYPES = {
       specVersion: ['json-ld-1.0'],
       // FIXME
       idRegex: [
-        // type set
-        /compact-manifest.jsonld#t0104$/,
-        /compact-manifest.jsonld#t0105$/,
         // @type: @none
         /compact-manifest.jsonld#ttn01$/,
         /compact-manifest.jsonld#ttn02$/,