diff --git a/.changeset/red-walls-allow.md b/.changeset/red-walls-allow.md
new file mode 100644
index 0000000..5fdf1d5
--- /dev/null
+++ b/.changeset/red-walls-allow.md
@@ -0,0 +1,5 @@
+---
+'xstate-codegen': patch
+---
+
+Add support for babel macros used in machine code.
diff --git a/packages/xstate-compiled/examples/withMacros.machine.ts b/packages/xstate-compiled/examples/withMacros.machine.ts
new file mode 100644
index 0000000..247d5f3
--- /dev/null
+++ b/packages/xstate-compiled/examples/withMacros.machine.ts
@@ -0,0 +1,35 @@
+import env from 'penv.macro';
+import { Machine } from '@xstate/compiled';
+
+type LightEvent = { type: 'TIMER' } | { type: 'POWER_OUTAGE' };
+
+interface LightContext {
+  elapsed: number;
+}
+
+const withMacros = Machine<LightContext, LightEvent, 'withMacros'>({
+  initial: 'green',
+  context: { elapsed: 0 },
+  on: {
+    POWER_OUTAGE: {
+      target: '.red',
+    },
+  },
+  states: {
+    green: {
+      on: {
+        TIMER: env({ development: 'red' }, 'yellow'),
+      },
+    },
+    yellow: {
+      on: {
+        TIMER: 'red',
+      },
+    },
+    red: {
+      on: {
+        TIMER: 'green',
+      },
+    },
+  },
+});
diff --git a/packages/xstate-compiled/package.json b/packages/xstate-compiled/package.json
index 04827c5..980ca51 100644
--- a/packages/xstate-compiled/package.json
+++ b/packages/xstate-compiled/package.json
@@ -36,6 +36,7 @@
     "@types/node": "^14.0.14",
     "@types/rimraf": "^3.0.0",
     "@xstate/react": "^0.8.1",
+    "penv.macro": "^0.4.0",
     "nodemon": "2.0.4",
     "typescript": "^3.9.7"
   },
diff --git a/packages/xstate-compiled/src/extractMachines.ts b/packages/xstate-compiled/src/extractMachines.ts
index 44f618c..e988b75 100644
--- a/packages/xstate-compiled/src/extractMachines.ts
+++ b/packages/xstate-compiled/src/extractMachines.ts
@@ -257,6 +257,7 @@ export const extractMachines = async (
         babelHelpers: 'bundled',
         extensions,
         plugins: [
+          'babel-plugin-macros',
           '@babel/plugin-transform-typescript',
           '@babel/plugin-proposal-optional-chaining',
           '@babel/plugin-proposal-nullish-coalescing-operator',
diff --git a/yarn.lock b/yarn.lock
index 1be2be8..1763eac 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -221,7 +221,7 @@
   dependencies:
     regenerator-runtime "^0.13.4"
 
-"@babel/runtime@^7.7.2":
+"@babel/runtime@^7.5.0", "@babel/runtime@^7.7.2":
   version "7.11.2"
   resolved "https://registry.yarnpkg.com/@babel/runtime/-/runtime-7.11.2.tgz#f549c13c754cc40b87644b9fa9f09a6a95fe0736"
   integrity sha512-TeWkU52so0mPtDcaCTxNBI/IHiz0pZgr8VEFqXFtZWpYD08ZB6FaSwVAS8MKRQAP3bYKiVjwysOJgMFY28o6Tw==
@@ -2998,6 +2998,13 @@ path-type@^4.0.0:
   resolved "https://registry.yarnpkg.com/path-type/-/path-type-4.0.0.tgz#84ed01c0a7ba380afe09d90a8c180dcd9d03043b"
   integrity sha512-gDKb8aZMDeD/tZWs9P6+q0J9Mwkdl6xMV8TjnGP3qJVJ06bdMgkbBlLU8IdfOsIsFz2BW1rNVT3XuNEl8zPAvw==
 
+penv.macro@^0.4.0:
+  version "0.4.0"
+  resolved "https://registry.yarnpkg.com/penv.macro/-/penv.macro-0.4.0.tgz#06e810a8234a07cb09f7a4c0819d8f88ec7d159a"
+  integrity sha512-rvqR3AreOAkii3ZPAiH+V4nNSk9W5bUAaT5+D9YK2dPzPmGZcFjuVyfBYmbkm979fR6gVoEfnvGMGTk4CFPskQ==
+  dependencies:
+    "@babel/runtime" "^7.5.0"
+
 picomatch@^2.0.4, picomatch@^2.0.5, picomatch@^2.2.1, picomatch@^2.2.2:
   version "2.2.2"
   resolved "https://registry.yarnpkg.com/picomatch/-/picomatch-2.2.2.tgz#21f333e9b6b8eaff02468f5146ea406d345f4dad"