diff --git a/compiler/src/dotty/tools/dotc/core/quoted/PickledQuotes.scala b/compiler/src/dotty/tools/dotc/core/quoted/PickledQuotes.scala
index 527c15414365..98096d13d86b 100644
--- a/compiler/src/dotty/tools/dotc/core/quoted/PickledQuotes.scala
+++ b/compiler/src/dotty/tools/dotc/core/quoted/PickledQuotes.scala
@@ -131,6 +131,9 @@ object PickledQuotes {
     val x1 = SyntheticValDef(NameKinds.UniqueName.fresh("x".toTermName), x)
     def x1Ref() = ref(x1.symbol)
     def rec(f: Tree): Tree = f match {
+      case Inlined(call, bindings, expansion) =>
+        // this case must go before closureDef to avoid dropping the inline node
+        cpy.Inlined(f)(call, bindings, rec(expansion))
       case closureDef(ddef) =>
         val paramSym = ddef.vparamss.head.head.symbol
         new TreeTypeMap(
@@ -140,8 +143,6 @@ object PickledQuotes {
         ).transform(ddef.rhs)
       case Block(stats, expr) =>
         seq(stats, rec(expr))
-      case Inlined(call, bindings, expansion) =>
-        Inlined(call, bindings, rec(expansion))
       case _ =>
         f.select(nme.apply).appliedTo(x1Ref())
     }
diff --git a/compiler/src/dotty/tools/dotc/transform/PostTyper.scala b/compiler/src/dotty/tools/dotc/transform/PostTyper.scala
index 355bf11bc3d1..58d1e893252c 100644
--- a/compiler/src/dotty/tools/dotc/transform/PostTyper.scala
+++ b/compiler/src/dotty/tools/dotc/transform/PostTyper.scala
@@ -4,7 +4,9 @@ package transform
 import dotty.tools.dotc.ast.{Trees, tpd, untpd}
 import scala.collection.mutable
 import core._
-import typer.{Checking, VarianceChecker}
+import dotty.tools.dotc.typer.Checking
+import dotty.tools.dotc.typer.Inliner
+import dotty.tools.dotc.typer.VarianceChecker
 import Types._, Contexts._, Names._, Flags._, DenotTransformers._, Phases._
 import SymDenotations._, StdNames._, Annotations._, Trees._, Scopes._
 import Decorators._
@@ -237,17 +239,7 @@ class PostTyper extends MacroTransform with IdentityDenotTransformer { thisPhase
               super.transform(tree1)
           }
         case Inlined(call, bindings, expansion) if !call.isEmpty =>
-          // Leave only a call trace consisting of
-          //  - a reference to the top-level class from which the call was inlined,
-          //  - the call's position
-          // in the call field of an Inlined node.
-          // The trace has enough info to completely reconstruct positions.
-          // The minimization is done for two reasons:
-          //  1. To save space (calls might contain large inline arguments, which would otherwise
-          //     be duplicated
-          //  2. To enable correct pickling (calls can share symbols with the inlined code, which
-          //     would trigger an assertion when pickling).
-          val callTrace = Ident(call.symbol.topLevelClass.typeRef).withPos(call.pos)
+          val callTrace = Inliner.inlineCallTrace(call.symbol, call.pos)
           cpy.Inlined(tree)(callTrace, transformSub(bindings), transform(expansion)(inlineContext(call)))
         case tree: Template =>
           withNoCheckNews(tree.parents.flatMap(newPart)) {
diff --git a/compiler/src/dotty/tools/dotc/transform/Splicer.scala b/compiler/src/dotty/tools/dotc/transform/Splicer.scala
index e1cc8fa34062..2c9e4ed7a788 100644
--- a/compiler/src/dotty/tools/dotc/transform/Splicer.scala
+++ b/compiler/src/dotty/tools/dotc/transform/Splicer.scala
@@ -41,8 +41,8 @@ object Splicer {
       val interpreter = new Interpreter(pos, classLoader)
       try {
         // Some parts of the macro are evaluated during the unpickling performed in quotedExprToTree
-        val interpreted = interpreter.interpret[scala.quoted.Expr[Any]](tree)
-        interpreted.fold(tree)(x => PickledQuotes.quotedExprToTree(x))
+        val interpretedExpr = interpreter.interpret[scala.quoted.Expr[Any]](tree)
+        interpretedExpr.fold(tree)(x => PickledQuotes.quotedExprToTree(x))
       }
       catch {
         case ex: scala.quoted.QuoteError =>
diff --git a/compiler/src/dotty/tools/dotc/transform/Staging.scala b/compiler/src/dotty/tools/dotc/transform/Staging.scala
index 0d027fb135df..6a04d9bc01fa 100644
--- a/compiler/src/dotty/tools/dotc/transform/Staging.scala
+++ b/compiler/src/dotty/tools/dotc/transform/Staging.scala
@@ -15,6 +15,7 @@ import typer.Implicits.SearchFailureType
 import scala.collection.mutable
 import dotty.tools.dotc.core.StdNames._
 import dotty.tools.dotc.core.quoted._
+import dotty.tools.dotc.typer.Inliner
 import dotty.tools.dotc.util.SourcePosition
 
 
@@ -381,7 +382,12 @@ class Staging extends MacroTransformWithImplicits {
           capturers(body.symbol)(body)
         case _=>
           val (body1, splices) = nested(isQuote = true).split(body)
-          if (level == 0 && !ctx.inInlineMethod) pickledQuote(body1, splices, body.tpe, isType).withPos(quote.pos)
+          if (level == 0 && !ctx.inInlineMethod) {
+            val body2 =
+              if (body1.isType) body1
+              else Inlined(Inliner.inlineCallTrace(ctx.owner, quote.pos), Nil, body1)
+            pickledQuote(body2, splices, body.tpe, isType).withPos(quote.pos)
+          }
           else {
             // In top-level splice in an inline def. Keep the tree as it is, it will be transformed at inline site.
             body
@@ -432,7 +438,13 @@ class Staging extends MacroTransformWithImplicits {
       else if (level == 1) {
         val (body1, quotes) = nested(isQuote = false).split(splice.qualifier)
         val tpe = outer.embedded.getHoleType(splice)
-        makeHole(body1, quotes, tpe).withPos(splice.pos)
+        val hole = makeHole(body1, quotes, tpe).withPos(splice.pos)
+        // We do not place add the inline marker for trees that where lifted as they come from the same file as their
+        // enclosing quote. Any intemediate splice will add it's own Inlined node and cancel it before splicig the lifted tree.
+        // Note that lifted trees are not necessarily expressions and that Inlined nodes are expected to be expressions. 
+        // For example we can have a lifted tree containing the LHS of an assignment (see tests/run-with-compiler/quote-var.scala).
+        if (splice.isType || outer.embedded.isLiftedSymbol(splice.qualifier.symbol)) hole
+        else Inlined(EmptyTree, Nil, hole)
       }
       else if (enclosingInlineds.nonEmpty) { // level 0 in an inlined call
         val spliceCtx = ctx.outer // drop the last `inlineContext`
@@ -664,7 +676,12 @@ object Staging {
       map.get(splice.qualifier.symbol).map(_.tpe.widen).getOrElse(splice.tpe)
     }
 
+    def isLiftedSymbol(sym: Symbol)(implicit ctx: Context): Boolean = map.contains(sym)
+
     /** Get the list of embedded trees */
     def getTrees: List[tpd.Tree] = trees.toList
+
+    override def toString: String = s"Embedded($trees, $map)"
+
   }
 }
diff --git a/compiler/src/dotty/tools/dotc/typer/Inliner.scala b/compiler/src/dotty/tools/dotc/typer/Inliner.scala
index 1aef548cd2ae..a2a98ea942c2 100644
--- a/compiler/src/dotty/tools/dotc/typer/Inliner.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Inliner.scala
@@ -149,6 +149,15 @@ object Inliner {
       (new Reposition).transformInline(inlined)
     }
   }
+
+  /** Leave only a call trace consisting of
+   *  - a reference to the top-level class from which the call was inlined,
+   *  - the call's position
+   *  in the call field of an Inlined node.
+   *  The trace has enough info to completely reconstruct positions.
+   */
+  def inlineCallTrace(callSym: Symbol, pos: Position)(implicit ctx: Context): Tree =
+    Ident(callSym.topLevelClass.typeRef).withPos(pos)
 }
 
 /** Produces an inlined version of `call` via its `inlined` method.
diff --git a/tests/run-with-compiler/quote-fun-app-1.check b/tests/run-with-compiler/quote-fun-app-1.check
new file mode 100644
index 000000000000..6fe5c7f6a8f8
--- /dev/null
+++ b/tests/run-with-compiler/quote-fun-app-1.check
@@ -0,0 +1,2 @@
+42
+43
diff --git a/tests/run-with-compiler/quote-fun-app-1.scala b/tests/run-with-compiler/quote-fun-app-1.scala
new file mode 100644
index 000000000000..cd61c6d95b65
--- /dev/null
+++ b/tests/run-with-compiler/quote-fun-app-1.scala
@@ -0,0 +1,17 @@
+import scala.quoted._
+
+import scala.quoted.Toolbox.Default._
+
+object Test {
+
+  def main(args: Array[String]): Unit = {
+    val f = f1.run
+    println(f(42))
+    println(f(43))
+  }
+
+  def f1: Expr[Int => Int] = '{ n => ~f2('(n)) }
+  def f2: Expr[Int => Int] = '{ n => ~f3('(n)) }
+  def f3: Expr[Int => Int] = '{ n => ~f4('(n)) }
+  def f4: Expr[Int => Int] = '{ n => n }
+}
diff --git a/tests/run-with-compiler/quote-unrolled-foreach.check b/tests/run-with-compiler/quote-unrolled-foreach.check
index 6b892dd442bf..a97a6f1d93fe 100644
--- a/tests/run-with-compiler/quote-unrolled-foreach.check
+++ b/tests/run-with-compiler/quote-unrolled-foreach.check
@@ -33,7 +33,6 @@
   var i: scala.Int = 0
   while (i.<(size)) {
     val element: scala.Int = arr.apply(i)
-
     ((i: scala.Int) => java.lang.System.out.println(i)).apply(element)
     i = i.+(1)
   }
@@ -86,7 +85,6 @@
   var i: scala.Int = 0
   while (i.<(size)) {
     val element: scala.Int = arr1.apply(i)
-
     ((x: scala.Int) => scala.Predef.println(x)).apply(element)
     i = i.+(1)
   }
diff --git a/tests/run-with-compiler/quote-var.check b/tests/run-with-compiler/quote-var.check
new file mode 100644
index 000000000000..cd470e619003
--- /dev/null
+++ b/tests/run-with-compiler/quote-var.check
@@ -0,0 +1 @@
+xyz
diff --git a/tests/run-with-compiler/quote-var.scala b/tests/run-with-compiler/quote-var.scala
new file mode 100644
index 000000000000..e19d5992c471
--- /dev/null
+++ b/tests/run-with-compiler/quote-var.scala
@@ -0,0 +1,38 @@
+import scala.quoted._
+
+object Test {
+
+  sealed trait Var {
+    def get: Expr[String]
+    def update(x: Expr[String]): Expr[Unit]
+  }
+
+  object Var {
+    def apply(init: Expr[String])(body: Var => Expr[String]): Expr[String] = '{
+      var x = ~init
+      ~body(
+        new Var {
+          def get: Expr[String] = '(x)
+          def update(e: Expr[String]): Expr[Unit] = '{ x = ~e }
+        }
+      )
+    }
+  }
+
+
+  def test1(): Expr[String] = Var('("abc")) { x =>
+    '{
+      ~x.update('("xyz"))
+      ~x.get
+    }
+  }
+
+  def main(args: Array[String]): Unit = {
+    implicit val toolbox: scala.quoted.Toolbox = scala.quoted.Toolbox.make
+
+    println(test1().run)
+  }
+}
+
+
+
diff --git a/tests/run/i4947e.check b/tests/run/i4947e.check
new file mode 100644
index 000000000000..1e67df692f1e
--- /dev/null
+++ b/tests/run/i4947e.check
@@ -0,0 +1,8 @@
+assertImpl: Test$.main(Test_2.scala:7)
+true
+assertImpl: Test$.main(Test_2.scala:8)
+false
+assertImpl: Test$.main(Test_2.scala:9)
+hi: Test$.main(Test_2.scala:10)
+hi again: Test$.main(Test_2.scala:11)
+false
diff --git a/tests/run/i4947e/Macro_1.scala b/tests/run/i4947e/Macro_1.scala
new file mode 100644
index 000000000000..175a642be819
--- /dev/null
+++ b/tests/run/i4947e/Macro_1.scala
@@ -0,0 +1,11 @@
+import scala.quoted._
+
+object Macros {
+  def printStack(tag: String): Unit = {
+    println(tag + ": "+ new Exception().getStackTrace().apply(1))
+  }
+  def assertImpl(expr: Expr[Boolean]) = '{
+    printStack("assertImpl")
+    println(~expr)
+  }
+}
diff --git a/tests/run/i4947e/Test_2.scala b/tests/run/i4947e/Test_2.scala
new file mode 100644
index 000000000000..cc83cd4b4536
--- /dev/null
+++ b/tests/run/i4947e/Test_2.scala
@@ -0,0 +1,15 @@
+object Test {
+
+  inline def assert2(expr: => Boolean): Unit =  ~Macros.assertImpl('(expr))
+
+  def main(args: Array[String]): Unit = {
+    val x = 1
+    assert2(x != 0)
+    assert2(x == 0)
+    assert2 {
+      Macros.printStack("hi")
+      Macros.printStack("hi again")
+      x == 0
+    }
+  }
+}
diff --git a/tests/run/i4947f.check b/tests/run/i4947f.check
new file mode 100644
index 000000000000..1e67df692f1e
--- /dev/null
+++ b/tests/run/i4947f.check
@@ -0,0 +1,8 @@
+assertImpl: Test$.main(Test_2.scala:7)
+true
+assertImpl: Test$.main(Test_2.scala:8)
+false
+assertImpl: Test$.main(Test_2.scala:9)
+hi: Test$.main(Test_2.scala:10)
+hi again: Test$.main(Test_2.scala:11)
+false
diff --git a/tests/run/i4947f/Macro_1.scala b/tests/run/i4947f/Macro_1.scala
new file mode 100644
index 000000000000..c18b3c0a7eba
--- /dev/null
+++ b/tests/run/i4947f/Macro_1.scala
@@ -0,0 +1,14 @@
+import scala.quoted._
+
+object Macros {
+  def printStack(tag: String): Unit = {
+    println(tag + ": "+ new Exception().getStackTrace().apply(1))
+  }
+  def assertImpl(expr: Expr[Boolean]) = '{
+    printStack("assertImpl")
+    println(~expr)
+  }
+
+  inline def assert2(expr: => Boolean): Unit =  ~Macros.assertImpl('(expr))
+
+}
diff --git a/tests/run/i4947f/Test_2.scala b/tests/run/i4947f/Test_2.scala
new file mode 100644
index 000000000000..6a96b58b4d34
--- /dev/null
+++ b/tests/run/i4947f/Test_2.scala
@@ -0,0 +1,15 @@
+object Test {
+
+  import Macros._
+
+  def main(args: Array[String]): Unit = {
+    val x = 1
+    assert2(x != 0)
+    assert2(x == 0)
+    assert2 {
+      Macros.printStack("hi")
+      Macros.printStack("hi again")
+      x == 0
+    }
+  }
+}