diff --git a/examples/factorial/factorial.q b/examples/factorial/factorial.q
new file mode 100644
index 0000000..f198ec1
--- /dev/null
+++ b/examples/factorial/factorial.q
@@ -0,0 +1,11 @@
+main() {
+	syscall(60, factorial(5))
+}
+
+factorial(x) {
+	if x <= 1 {
+		return 1
+	}
+
+	return x * factorial(x - 1)
+}
\ No newline at end of file
diff --git a/src/build/core/Compare.go b/src/build/core/Compare.go
index 2e2f29b..4aab1b6 100644
--- a/src/build/core/Compare.go
+++ b/src/build/core/Compare.go
@@ -14,9 +14,9 @@ func (f *Function) Compare(comparison *expression.Expression) error {
 
 	if left.IsLeaf() && left.Token.Kind == token.Identifier {
 		name := left.Token.Text()
-		variable, exists := f.variables[name]
+		variable := f.Variable(name)
 
-		if !exists {
+		if variable == nil {
 			return errors.New(&errors.UnknownIdentifier{Name: name}, f.File, left.Token.Position)
 		}
 
diff --git a/src/build/core/CompileAssign.go b/src/build/core/CompileAssign.go
index ce46a34..460ef05 100644
--- a/src/build/core/CompileAssign.go
+++ b/src/build/core/CompileAssign.go
@@ -8,9 +8,9 @@ import (
 // CompileAssign compiles an assign statement.
 func (f *Function) CompileAssign(node *ast.Assign) error {
 	name := node.Name.Text()
-	variable, exists := f.variables[name]
+	variable := f.Variable(name)
 
-	if !exists {
+	if variable == nil {
 		return errors.New(&errors.UnknownIdentifier{Name: name}, f.File, node.Name.Position)
 	}
 
diff --git a/src/build/core/CompileDefinition.go b/src/build/core/CompileDefinition.go
index c23ac56..894dd64 100644
--- a/src/build/core/CompileDefinition.go
+++ b/src/build/core/CompileDefinition.go
@@ -44,7 +44,7 @@ func (f *Function) AddVariable(variable *Variable) {
 		f.Comment("%s = %s (%s, %d uses)", variable.Name, variable.Value, variable.Register, variable.Alive)
 	}
 
-	f.variables[variable.Name] = variable
+	f.Scope()[variable.Name] = variable
 	f.cpu.Reserve(variable.Register)
 	f.cpu.Use(variable.Register)
 }
@@ -67,13 +67,13 @@ func (f *Function) useVariable(variable *Variable) {
 
 // identifierExists returns true if the identifier has been defined.
 func (f *Function) identifierExists(name string) bool {
-	_, exists := f.variables[name]
+	variable := f.Variable(name)
 
-	if exists {
+	if variable != nil {
 		return true
 	}
 
-	_, exists = f.functions[name]
+	_, exists := f.functions[name]
 	return exists
 }
 
diff --git a/src/build/core/CompileIf.go b/src/build/core/CompileIf.go
index 7721bf6..3146cc4 100644
--- a/src/build/core/CompileIf.go
+++ b/src/build/core/CompileIf.go
@@ -16,8 +16,11 @@ func (f *Function) CompileIf(branch *ast.If) error {
 		return err
 	}
 
-	f.AddLabel(success)
-	defer f.AddLabel(fail)
 	f.count.branch++
-	return f.CompileAST(branch.Body)
+	f.AddLabel(success)
+	f.pushScope()
+	err = f.CompileAST(branch.Body)
+	f.popScope()
+	f.AddLabel(fail)
+	return err
 }
diff --git a/src/build/core/ExecuteLeaf.go b/src/build/core/ExecuteLeaf.go
index c08866d..3b0c5f6 100644
--- a/src/build/core/ExecuteLeaf.go
+++ b/src/build/core/ExecuteLeaf.go
@@ -13,9 +13,9 @@ func (f *Function) ExecuteLeaf(operation token.Token, register cpu.Register, ope
 	switch operand.Kind {
 	case token.Identifier:
 		name := operand.Text()
-		variable, exists := f.variables[name]
+		variable := f.Variable(name)
 
-		if !exists {
+		if variable == nil {
 			return errors.New(&errors.UnknownIdentifier{Name: name}, f.File, operand.Position)
 		}
 
diff --git a/src/build/core/Function.go b/src/build/core/Function.go
index 961f5d7..157d6ea 100644
--- a/src/build/core/Function.go
+++ b/src/build/core/Function.go
@@ -36,8 +36,8 @@ func NewFunction(name string, file *fs.File, body token.List) *Function {
 				Syscall: x64.SyscallRegisters,
 				Output:  x64.ReturnValueRegisters,
 			},
-			variables: map[string]*Variable{},
-			finished:  make(chan struct{}),
+			scopes:   []Scope{{}},
+			finished: make(chan struct{}),
 		},
 	}
 }
diff --git a/src/build/core/SaveRegister.go b/src/build/core/SaveRegister.go
index 30e3c33..2b0b914 100644
--- a/src/build/core/SaveRegister.go
+++ b/src/build/core/SaveRegister.go
@@ -18,14 +18,7 @@ func (f *Function) SaveRegister(register cpu.Register) {
 		}
 	}
 
-	var variable *Variable
-
-	for _, v := range f.variables {
-		if v.Register == register {
-			variable = v
-			break
-		}
-	}
+	variable := f.VariableInRegister(register)
 
 	if variable == nil || variable.Alive == 0 {
 		return
diff --git a/src/build/core/Scope.go b/src/build/core/Scope.go
new file mode 100644
index 0000000..dcf3b3c
--- /dev/null
+++ b/src/build/core/Scope.go
@@ -0,0 +1,31 @@
+package core
+
+// Scope represents a map of variables.
+type Scope map[string]*Variable
+
+// Scope returns the current scope.
+func (s *state) Scope() Scope {
+	return s.scopes[len(s.scopes)-1]
+}
+
+// pushScope pushes a new scope to the top of the stack.
+func (s *state) pushScope() {
+	lastScope := s.scopes[len(s.scopes)-1]
+	newScope := make(Scope, len(lastScope))
+
+	for k, v := range lastScope {
+		newScope[k] = &Variable{
+			Value:    v.Value,
+			Name:     v.Name,
+			Register: v.Register,
+			Alive:    v.Alive,
+		}
+	}
+
+	s.scopes = append(s.scopes, newScope)
+}
+
+// popScope removes the scope at the top of the stack.
+func (s *state) popScope() {
+	s.scopes = s.scopes[:len(s.scopes)-1]
+}
diff --git a/src/build/core/TokenToRegister.go b/src/build/core/TokenToRegister.go
index d437cec..1d3640c 100644
--- a/src/build/core/TokenToRegister.go
+++ b/src/build/core/TokenToRegister.go
@@ -16,9 +16,9 @@ func (f *Function) TokenToRegister(t token.Token, register cpu.Register) error {
 	switch t.Kind {
 	case token.Identifier:
 		name := t.Text()
-		variable, exists := f.variables[name]
+		variable := f.Variable(name)
 
-		if !exists {
+		if variable == nil {
 			return errors.New(&errors.UnknownIdentifier{Name: name}, f.File, t.Position)
 		}
 
diff --git a/src/build/core/Variable.go b/src/build/core/Variable.go
index 4557945..88e0109 100644
--- a/src/build/core/Variable.go
+++ b/src/build/core/Variable.go
@@ -12,3 +12,19 @@ type Variable struct {
 	Register cpu.Register
 	Alive    int
 }
+
+// Variable returns the variable with the given name or `nil` if it doesn't exist.
+func (s *state) Variable(name string) *Variable {
+	return s.Scope()[name]
+}
+
+// VariableInRegister returns the variable that occupies the given register or `nil` if none occupy the register.
+func (s *state) VariableInRegister(register cpu.Register) *Variable {
+	for _, v := range s.Scope() {
+		if v.Register == register {
+			return v
+		}
+	}
+
+	return nil
+}
diff --git a/src/build/core/state.go b/src/build/core/state.go
index 9269971..b155573 100644
--- a/src/build/core/state.go
+++ b/src/build/core/state.go
@@ -12,7 +12,7 @@ import (
 // state is the data structure we embed in each function to preserve compilation state.
 type state struct {
 	err             error
-	variables       map[string]*Variable
+	scopes          []Scope
 	functions       map[string]*Function
 	registerHistory []uint64
 	finished        chan struct{}
diff --git a/tests/examples_test.go b/tests/examples_test.go
index f390eb2..d9f19f4 100644
--- a/tests/examples_test.go
+++ b/tests/examples_test.go
@@ -11,6 +11,7 @@ var examples = []struct {
 	ExpectedExitCode int
 }{
 	{"hello", "Hello", 0},
+	{"factorial", "", 120},
 	{"fibonacci", "", 55},
 }