diff --git a/lib/tags/macro.js b/lib/tags/macro.js
index 19b80771..44655e15 100644
--- a/lib/tags/macro.js
+++ b/lib/tags/macro.js
@@ -22,12 +22,11 @@ exports.compile = function (compiler, args, content, parents, options, blockName
   return '_ctx.' + fnName + ' = function (' + args.join('') + ') {\n' +
     '  var _output = "";\n' +
     '    __ctx = _utils.extend({}, _ctx),\n' +
-    '    _ctx = _utils.extend({}, __ctx);\n' +
     '  _utils.each(_ctx, function (v, k) {\n' +
     '    if (["' + args.join('","') + '"].indexOf(k) !== -1) { delete _ctx[k]; }\n' +
     '  });\n' +
     compiler(content, parents, options, blockName) + '\n' +
-    ' _ctx = __ctx;\n' +
+    ' _ctx = _utils.extend(_ctx, __ctx);\n' +
     '  return _output;\n' +
     '};\n' +
     '_ctx.' + fnName + '.safe = true;\n';
diff --git a/tests/tags/macro.test.js b/tests/tags/macro.test.js
index 5f16d2f0..1867b78f 100644
--- a/tests/tags/macro.test.js
+++ b/tests/tags/macro.test.js
@@ -31,4 +31,8 @@ describe('Tag: macro', function () {
   it('gh-457: local context is copied and overwritten within macro context', function () {
     expect(swig.render('{% set foo = 1 %}{% set baz = 3 %}{% macro bar(foo) %}{{ foo }}{{ baz }}{% endmacro %}{{ bar(2) }}{{ foo }}')).to.equal('231');
   });
+
+  it('gh-499: a macro can be set to a variable', function () {
+    expect(swig.render('{% macro burrito() %}burrito{% endmacro %}{% set foo = burrito() %}{{foo}}')).to.equal('burrito');
+  });
 });