diff --git a/src/asar/main.cpp b/src/asar/main.cpp
index ad318f41..0e499801 100644
--- a/src/asar/main.cpp
+++ b/src/asar/main.cpp
@@ -503,7 +503,9 @@ void assembleline(const char * fname, int linenum, const char * line)
 	single_line_for_tracker = 1;
 	try
 	{
-		string tmp=replace_macro_args(line);
+		string tmp;
+		if(inmacro) tmp = replace_macro_args(line);
+		else tmp = line;
 		clean(tmp);
 		string out;
 		if (numif==numtrue) resolvedefines(out, tmp);
diff --git a/tests/macrolabels.asm b/tests/macrolabels.asm
index 2dbb27ed..ba8e576b 100644
--- a/tests/macrolabels.asm
+++ b/tests/macrolabels.asm
@@ -14,6 +14,7 @@
 ;`1D 80 00
 ;`04 80 00
 ;`04 80 00
+;`3C 61 3E
 
 org $008000
 	Main:
@@ -49,4 +50,7 @@ org $008000
 		dl Main_Sub
 		dl InMacro
 		dl Main_InMacroSub		; Note that this is not InMacro_InMacroSub
-		
\ No newline at end of file
+
+		; not exactly a test for macro labels, but close enough
+		db "<a>" ; macro argument outside macro - should be left unexpanded
+