diff --git a/src/CHANGELOG b/src/CHANGELOG
index 313bb9813..e014619cb 100644
--- a/src/CHANGELOG
+++ b/src/CHANGELOG
@@ -241,6 +241,16 @@ ECL 0.9i
    code for multiple value calls and other structures such as unwind-protect
    forms.
 
+ - The functions created by MACROLET must be compiled taking into account other
+   enclosing MACROLET and SYMBOL-MACRO definitions. This allows one to write
+   something like
+	(defun a ()
+	  (symbol-macro ((x 1))
+	    (macrolet ((m () x))
+	      (m))))
+	(a) => 1
+   This has been achieved by merging the C and bytecodes compiler environments.
+
 * Documentation:
 
  - The HTML manuals now use CSS for a more appealing look.
diff --git a/src/c/compiler.d b/src/c/compiler.d
index d0c20f2d8..7f218bbc1 100644
--- a/src/c/compiler.d
+++ b/src/c/compiler.d
@@ -416,14 +416,17 @@ c_new_env(struct cl_compiler_env *new_c_env, cl_object env)
 	ENV->coalesce = TRUE;
 	ENV->macros = Cnil;
 	ENV->lexical_level = 0;
+	ENV->constants = Cnil;
 	if (Null(env)) {
-		ENV->constants = Cnil;
+		ENV->macros = Cnil;
 		ENV->variables = Cnil;
 	} else {
 		ENV->variables = CAR(env);
 		ENV->macros = CDR(env);
 		for (env = ENV->variables; !Null(env); env = CDR(env)) {
 			cl_object record = CAR(env);
+			if (ATOM(record))
+				continue;
 			if (SYMBOLP(CAR(record)) && CADR(record) != @'si::symbol-macro') {
 				continue;
 			} else {
@@ -438,11 +441,13 @@ static cl_object
 c_tag_ref(cl_object the_tag, cl_object the_type)
 {
 	cl_fixnum n = 0;
-	cl_object l;
+	cl_object l, record, type, name;
 	for (l = ENV->variables; CONSP(l); l = CDR(l)) {
-		cl_object record = CAR(l);
-		cl_object type = CAR(record);
-		cl_object name = CADR(record);
+		record = CAR(l);
+		if (ATOM(record))
+			continue;
+		type = CAR(record);
+		name = CADR(record);
 		if (type == @':tag') {
 			if (type == the_type && !Null(assql(the_tag, name)))
 				return CONS(MAKE_FIXNUM(n),
@@ -466,11 +471,13 @@ static cl_fixnum
 c_var_ref(cl_object var, int allow_symbol_macro, bool ensure_defined)
 {
 	cl_fixnum n = 0;
-	cl_object l;
+	cl_object l, record, special, name;
 	for (l = ENV->variables; CONSP(l); l = CDR(l)) {
-		cl_object record = CAR(l);
-		cl_object name = CAR(record);
-		cl_object special = CADR(record);
+		record = CAR(l);
+		if (ATOM(record))
+			continue;
+		name = CAR(record);
+		special = CADR(record);
 		if (name == @':block' || name == @':tag' || name == @':function')
 			n++;
 		else if (name != var) {
diff --git a/src/cmp/cmpenv.lsp b/src/cmp/cmpenv.lsp
index a0675da2b..334006def 100644
--- a/src/cmp/cmpenv.lsp
+++ b/src/cmp/cmpenv.lsp
@@ -461,7 +461,7 @@
 
 (defun cmp-env-register-symbol-macro (name form &optional (env *cmp-env*))
   (push (list name 'si::symbol-macro #'(lambda (whole env) form))
-	(cmp-env-functions env)))
+	(cmp-env-variables env)))
 
 (defun cmp-env-register-block (blk &optional (env *cmp-env*))
   (push (list :block (blk-name blk) blk)
diff --git a/src/cmp/cmpflet.lsp b/src/cmp/cmpflet.lsp
index fe3c31da3..5011a0a74 100644
--- a/src/cmp/cmpflet.lsp
+++ b/src/cmp/cmpflet.lsp
@@ -196,13 +196,15 @@
 
 (defun c1macrolet (args)
   (check-args-number 'MACROLET args 1)
-  (let ((*cmp-env* (cmp-env-copy)))
+  (let ((old-cmp-env *cmp-env*)
+	(*cmp-env* (cmp-env-copy)))	
     (dolist (def (car args))
       (let ((name (first def)))
 	(cmpck (or (endp def) (not (symbolp name)) (endp (cdr def)))
 	       "The macro definition ~s is illegal." def)
-	(cmp-env-register-macro name
-		    (si::eval-with-env (sys::expand-defmacro name (second def) (cddr def))))))
+	(let* ((form (si::expand-defmacro name (second def) (cddr def)))
+	       (fun (si::eval-with-env form old-cmp-env nil t)))
+	  (cmp-env-register-macro name fun))))
     (c1locally (cdr args))))
 
 (defun c1symbol-macrolet (args)
diff --git a/src/cmp/cmputil.lsp b/src/cmp/cmputil.lsp
index bcee1cfa2..28e6cb67d 100644
--- a/src/cmp/cmputil.lsp
+++ b/src/cmp/cmputil.lsp
@@ -139,14 +139,14 @@
                  ~%;;; You are recommended to compile again.~%"
 	      form))))
 
-(defun cmp-macroexpand (form &optional (env (cons nil (cdr *cmp-env*))))
+(defun cmp-macroexpand (form &optional (env *cmp-env*))
   (with-cmp-protection (macroexpand form env)
     (let ((*print-case* :upcase))
       (print-current-form)
       (format t "~&;;; The macro form ~S was not expanded successfully.~
                  ~%;;; You are recommended to compile again.~%" form))))
 
-(defun cmp-expand-macro (fd form &optional (env (cons nil (cdr *cmp-env*))))
+(defun cmp-expand-macro (fd form &optional (env *cmp-env*))
   (with-cmp-protection
     (let ((new-form (funcall *macroexpand-hook* fd form env)))
       (values new-form (not (eql new-form form))))