diff --git a/src/Lean/Compiler/LCNF/Simp.lean b/src/Lean/Compiler/LCNF/Simp.lean
index 98bb8867c9..af8353d7bf 100644
--- a/src/Lean/Compiler/LCNF/Simp.lean
+++ b/src/Lean/Compiler/LCNF/Simp.lean
@@ -311,6 +311,8 @@ structure InlineCandidateInfo where
   params  : Array Param
   /-- Value (lambda expression) of the function to be inlined. -/
   value   : Code
+  f       : Expr
+  args    : Array Expr
 
 /-- The arity (aka number of parameters) of the function to be inlined. -/
 def InlineCandidateInfo.arity : InlineCandidateInfo → Nat
@@ -320,31 +322,40 @@ def InlineCandidateInfo.arity : InlineCandidateInfo → Nat
 Return `some info` if `e` should be inlined.
 -/
 def inlineCandidate? (e : Expr) : SimpM (Option InlineCandidateInfo) := do
+  let mut e := e
+  let mut mustInline := false
+  if e.isAppOfArity ``inline 2 then
+    e ← findExpr e.appArg!
+    mustInline := true
   let numArgs := e.getAppNumArgs
   let f := e.getAppFn
   if let .const declName us ← findExpr f then
-    unless hasInlineAttribute (← getEnv) declName do return none
+    unless mustInline || hasInlineAttribute (← getEnv) declName do return none
     -- TODO: check whether function is recursive or not.
     -- We can skip the test and store function inline so far.
     let some decl ← getStage1Decl? declName | return none
     let arity := decl.getArity
     let inlinePartial := (← read).config.inlinePartial
-    if !inlinePartial && numArgs < arity then return none
+    if !mustInline && !inlinePartial && numArgs < arity then return none
     let params := decl.instantiateParamsLevelParams us
     let value := decl.instantiateValueLevelParams us
     incInline
     return some {
       isLocal := false
+      f       := e.getAppFn
+      args    := e.getAppArgs
       params, value
     }
   else if let some decl ← findFunDecl? f then
     unless numArgs > 0 do return none -- It is not worth to inline a local function that does not take any arguments
-    unless (← shouldInlineLocal decl) do return none
+    unless mustInline || (← shouldInlineLocal decl) do return none
     -- Remark: we inline local function declarations even if they are partial applied
     incInlineLocal
     modify fun s => { s with inlineLocal := s.inlineLocal + 1 }
     return some {
       isLocal := true
+      f       := e.getAppFn
+      args    := e.getAppArgs
       params  := decl.params
       value   := decl.value
     }
@@ -392,15 +403,15 @@ def betaReduce (params : Array Param) (code : Code) (args : Array Expr) (mustInl
   return code
 
 /--
-Create a new local function declaration when `args.size < info.params.size`.
+Create a new local function declaration when `info.args.size < info.params.size`.
 We use this function to inline/specialize a partial application of a local function.
 -/
-def specializePartialApp (info : InlineCandidateInfo) (args : Array Expr) : SimpM FunDecl := do
+def specializePartialApp (info : InlineCandidateInfo) : SimpM FunDecl := do
   let mut subst := {}
-  for param in info.params, arg in args do
+  for param in info.params, arg in info.args do
     subst := subst.insert param.fvarId arg
   let mut paramsNew := #[]
-  for param in info.params[args.size:] do
+  for param in info.params[info.args.size:] do
     let type ← replaceExprFVars param.type subst
     let paramNew ← mkAuxParam type
     paramsNew := paramsNew.push paramNew
@@ -410,27 +421,23 @@ def specializePartialApp (info : InlineCandidateInfo) (args : Array Expr) : Simp
   mkAuxFunDecl paramsNew code
 
 /--
-If `e` is an application that can be inlined, inline it.
+If the value of the given let-declaration is an application that can be inlined, inline it.
 
-`k?` is the optional "continuation" for `e`, and it may contain loose bound variables
-that need to instantiated with `xs`. That is, if `k? = some k`, then `k.instantiateRev xs`
-is an expression without loose bound variables.
+`k` is the "continuation" for the let declaration.
 -/
 partial def inlineApp? (letDecl : LetDecl) (k : Code) : SimpM (Option Code) := do
   if k matches .unreach .. then return some k
-  let e := letDecl.value
-  let some info ← inlineCandidate? e | return none
+  let some info ← inlineCandidate? letDecl.value | return none
   markSimplified
-  let args := e.getAppArgs
-  let numArgs := args.size
-  trace[Compiler.simp.inline] "inlining {e}"
+  let numArgs := info.args.size
+  trace[Compiler.simp.inline] "inlining {letDecl.value}"
   let fvarId := letDecl.fvarId
   if numArgs < info.arity then
-    let funDecl ← specializePartialApp info args
+    let funDecl ← specializePartialApp info
     addSubst letDecl.fvarId (.fvar funDecl.fvarId)
     return some (.fun funDecl k)
   else
-    let code ← betaReduce info.params info.value args[:info.arity]
+    let code ← betaReduce info.params info.value info.args[:info.arity]
     if k.isReturnOf fvarId && numArgs == info.arity then
       /- Easy case, the continuation `k` is just returning the result of the application. -/
       return code
@@ -442,7 +449,7 @@ partial def inlineApp? (letDecl : LetDecl) (k : Code) : SimpM (Option Code) := d
       code.bind fun fvarId' => do
         /- fvarId' is the result of the computation -/
         if numArgs > info.arity then
-          let decl ← mkAuxLetDecl (mkAppN (.fvar fvarId') args[info.arity:])
+          let decl ← mkAuxLetDecl (mkAppN (.fvar fvarId') info.args[info.arity:])
           let k ← replaceFVar k fvarId decl.fvarId
           return .let decl k
         else
@@ -452,9 +459,9 @@ partial def inlineApp? (letDecl : LetDecl) (k : Code) : SimpM (Option Code) := d
       `code` has multiple exit points, and the continuation is non-trivial
       Thus, we create an auxiliary join point.
       -/
-      let jpParam ← mkAuxParam (← inferType (mkAppN e.getAppFn args[:info.arity]))
+      let jpParam ← mkAuxParam (← inferType (mkAppN info.f info.args[:info.arity]))
       let jpValue ← if numArgs > info.arity then
-        let decl ← mkAuxLetDecl (mkAppN (.fvar jpParam.fvarId) args[info.arity:])
+        let decl ← mkAuxLetDecl (mkAppN (.fvar jpParam.fvarId) info.args[info.arity:])
         let k ← replaceFVar k fvarId decl.fvarId
         pure <| .let decl k
       else
diff --git a/tests/lean/run/inlineApp.lean b/tests/lean/run/inlineApp.lean
new file mode 100644
index 0000000000..edc720fbdb
--- /dev/null
+++ b/tests/lean/run/inlineApp.lean
@@ -0,0 +1,16 @@
+import Lean
+
+def f (x : Nat) :=
+  (x - 1) + x * 2 + x*x
+
+def h (x : Nat) :=
+  inline <| f (x + x)
+
+#eval Lean.Compiler.compile #[``h]
+
+open Lean Compiler LCNF in
+@[cpass] def simpInline : PassInstaller :=
+  Testing.assertDoesNotContainConstAfter `simp `simpInlinesInline ``inline "simp did not inline `inline`"
+
+set_option trace.Compiler.result true
+#eval Lean.Compiler.compile #[``h]