diff --git a/CHANGELOG.d/fix_bundle-function-declarations.md b/CHANGELOG.d/fix_bundle-function-declarations.md
new file mode 100644
index 0000000000..ce613debd4
--- /dev/null
+++ b/CHANGELOG.d/fix_bundle-function-declarations.md
@@ -0,0 +1 @@
+* Do not remove bindings referenced in function declarations when bundling
diff --git a/src/Language/PureScript/Bundle.hs b/src/Language/PureScript/Bundle.hs
index 734c61da8c..0ab9e79589 100644
--- a/src/Language/PureScript/Bundle.hs
+++ b/src/Language/PureScript/Bundle.hs
@@ -474,6 +474,10 @@ matchMember stmt
   , JSIdentifier _ name <- var
   , JSVarInit _ decl <- varInit
   = Just (Internal, name, decl)
+  -- function foo(...args) { body }
+  | JSFunction a0 jsIdent a1 args a2 body _ <- stmt
+  , JSIdentName _ name <- jsIdent
+  = pure (Internal, name, JSFunctionExpression a0 jsIdent a1 args a2 body)
   -- exports.foo = expr; exports["foo"] = expr;
   | JSAssignStatement e (JSAssign _) decl _ <- stmt
   , Just name <- exportsAccessor e
diff --git a/tests/purs/bundle/FunctionDeclaration.js b/tests/purs/bundle/FunctionDeclaration.js
new file mode 100644
index 0000000000..6d7bfdc1e0
--- /dev/null
+++ b/tests/purs/bundle/FunctionDeclaration.js
@@ -0,0 +1,19 @@
+"use strict";
+
+var foo = 0;
+
+function bar(foo) {
+  return foo;
+}
+
+var baz = "Done";
+
+function qux() {
+  return bar(baz);
+}
+
+exports.qux = qux;
+
+var fs = require('fs');
+var source = fs.readFileSync(__filename, 'utf-8');
+exports.fooIsEliminated = !/^ *var foo/m.test(source);
diff --git a/tests/purs/bundle/FunctionDeclaration.purs b/tests/purs/bundle/FunctionDeclaration.purs
new file mode 100644
index 0000000000..5d9810c71b
--- /dev/null
+++ b/tests/purs/bundle/FunctionDeclaration.purs
@@ -0,0 +1,14 @@
+module Main (main) where
+
+import Prelude
+import Effect (Effect)
+import Effect.Console (log)
+import Test.Assert (assert')
+
+main :: Effect Unit
+main = do
+  assert' "foo" fooIsEliminated
+  qux >>= log
+
+foreign import qux :: Effect String
+foreign import fooIsEliminated :: Boolean