diff --git a/compiler/CompileContext.js b/compiler/CompileContext.js
index 5599ff95d..ca9d662d5 100644
--- a/compiler/CompileContext.js
+++ b/compiler/CompileContext.js
@@ -52,9 +52,11 @@ class CompileContext {
         this.taglibLookup = taglibLookup.buildLookup(this.dirname);
         this.data = {};
 
+        this._vars = {};
+        this._uniqueVars = new UniqueVars();
         this._staticVars = {};
         this._staticCode = null;
-        this._uniqueVars = new UniqueVars();
+        this._uniqueStaticVars = new UniqueVars();
         this._srcCharProps = null;
         this._flags = {};
         this._errors = [];
@@ -124,8 +126,18 @@ class CompileContext {
     }
 
 
-    addStaticVar(name, init) {
+    addVar(name, init) {
         var actualVarName = this._uniqueVars.addVar(name, init);
+        this._vars[actualVarName] = init;
+        return this.builder.identifier(actualVarName);
+    }
+
+    getVars() {
+        return this._vars;
+    }
+
+    addStaticVar(name, init) {
+        var actualVarName = this._uniqueStaticVars.addVar(name, init);
         this._staticVars[actualVarName] = init;
         return this.builder.identifier(actualVarName);
     }
diff --git a/compiler/ast/TemplateRoot.js b/compiler/ast/TemplateRoot.js
index 0584fe4f6..10d3a88d8 100644
--- a/compiler/ast/TemplateRoot.js
+++ b/compiler/ast/TemplateRoot.js
@@ -18,6 +18,8 @@ class TemplateRoot extends Node {
     }
 
     generateCode(codegen) {
+        var context = codegen.context;
+
         var body = this.body;
         codegen.addStaticVar('str', '__helpers.s');
         codegen.addStaticVar('empty', '__helpers.e');
@@ -27,11 +29,15 @@ class TemplateRoot extends Node {
         var builder = codegen.builder;
         var program = builder.program;
         var functionDeclaration = builder.functionDeclaration;
-        var vars = builder.vars;
+
         var returnStatement = builder.returnStatement;
         var slot = builder.slot;
 
         var staticsSlot = slot();
+        var varsSlot = slot();
+        varsSlot.noOutput = true;
+
+        body = [ varsSlot ].concat(body.items);
 
         var outputNode = program([
             functionDeclaration('create', ['__helpers'], [
@@ -45,10 +51,10 @@ class TemplateRoot extends Node {
 
         codegen.generateCode(outputNode);
 
-        var staticVars = codegen.getStaticVars();
-        var staticCodeArray = codegen.getStaticCode();
+        var staticVars = context.getStaticVars();
+        var staticCodeArray = context.getStaticCode();
 
-        var staticContent = [vars(createVarsArray(staticVars))];
+        var staticContent = [builder.vars(createVarsArray(staticVars))];
         if (staticCodeArray) {
             staticCodeArray.forEach((code) => {
                 staticContent.push(code);
@@ -56,6 +62,9 @@ class TemplateRoot extends Node {
         }
 
         staticsSlot.setContent(staticContent);
+
+        var vars = context.getVars();
+        varsSlot.setContent(builder.vars(createVarsArray(vars)));
     }
 
     toJSON(prettyPrinter) {
diff --git a/test/fixtures/codegen/autotest/context-addVar/expected.js b/test/fixtures/codegen/autotest/context-addVar/expected.js
new file mode 100644
index 000000000..77a4735e2
--- /dev/null
+++ b/test/fixtures/codegen/autotest/context-addVar/expected.js
@@ -0,0 +1,14 @@
+function create(__helpers) {
+  var str = __helpers.s,
+      empty = __helpers.e,
+      notEmpty = __helpers.ne,
+      escapeXml = __helpers.x;
+
+  return function render(data, out) {
+    var foo = "Hello World";
+
+    out.w("<div></div>");
+  };
+}
+
+(module.exports = require("marko").c(__filename)).c(create);
diff --git a/test/fixtures/codegen/autotest/context-addVar/index.js b/test/fixtures/codegen/autotest/context-addVar/index.js
new file mode 100644
index 000000000..1ea58bc5d
--- /dev/null
+++ b/test/fixtures/codegen/autotest/context-addVar/index.js
@@ -0,0 +1,14 @@
+'use strict';
+
+module.exports = function(builder, codegen) {
+
+    var templateRoot = builder.templateRoot([
+        builder.htmlElement(
+            'div',
+            [])
+    ]);
+
+    codegen.context.addVar('foo', builder.literal('Hello World'));
+
+    return templateRoot;
+};
\ No newline at end of file