diff --git a/Changes b/Changes
index 16d2b4348..3244204f5 100644
--- a/Changes
+++ b/Changes
@@ -7,6 +7,9 @@ indicates the contributor was also the author of the fix; Thanks!
 
 ***  Add --top-module option to select between multiple tops. [Stefan Thiede]
 
+**** Fix SystemVerilog parameterized defines with `` expansion,
+     and fix extra whitespace inserted on substitution.  [Vladimir Matveyenko]
+
 **** Fix no-module include files on command line.  [Stefan Thiede]
 
 **** Fix dropping of backslash quoted-quote at end of $display.
diff --git a/src/V3PreLex.h b/src/V3PreLex.h
index 57cfb6e8b..3ec6d3843 100644
--- a/src/V3PreLex.h
+++ b/src/V3PreLex.h
@@ -133,9 +133,9 @@ class V3PreLex {
     void lineDirective(const char* text);
     void incLineno() { m_curFilelinep->incLineno(); }
     // Called by V3PreProc.cpp to inform lexer
-    void setStateDefArg();
-    void setStateDefValue();
-    void setStateIncFilename();
+    void pushStateDefArg();
+    void pushStateDefValue();
+    void pushStateIncFilename();
     void unputString(const char* textp);
 };
 
diff --git a/src/V3PreLex.l b/src/V3PreLex.l
index 8309b0e58..3fd0953c3 100644
--- a/src/V3PreLex.l
+++ b/src/V3PreLex.l
@@ -140,14 +140,25 @@ psl		[p]sl
 <ARGMODE><<EOF>>	{ yyerror("EOF in define argument list\n"); yyleng = 0; yyterminate(); }
 <ARGMODE>{crnl}		{ linenoInc(); yytext="\n"; yyleng=1; return(VP_WHITE); }
 <ARGMODE>{quote}	{ yy_push_state(STRMODE); yymore(); }
-<ARGMODE>[(]		{ V3PreLex::s_currentLexp->m_parenLevel++; appendDefValue(yytext,yyleng); }
-<ARGMODE>[,)]		{ if (V3PreLex::s_currentLexp->m_parenLevel>1) {
+<ARGMODE>[(]		{ V3PreLex::s_currentLexp->m_parenLevel++;
+			  if (V3PreLex::s_currentLexp->m_parenLevel>1) {
 			      appendDefValue(yytext,yyleng);
-			      if (yytext[0]==')') V3PreLex::s_currentLexp->m_parenLevel--;
 			  } else {
-			      unput(yytext[0]); yy_pop_state(); return (VP_DEFARG);
+			      return (VP_TEXT);
  			}}
-<ARGMODE>[^\/\*\n\r\\(,)\"]+	|
+<ARGMODE>[)]		{ V3PreLex::s_currentLexp->m_parenLevel--;
+			  if (V3PreLex::s_currentLexp->m_parenLevel>0) {
+			      appendDefValue(yytext,yyleng);
+			  } else {
+			      yy_pop_state(); return (VP_DEFARG);
+ 			}}
+<ARGMODE>[,]		{ if (V3PreLex::s_currentLexp->m_parenLevel>1) {
+			      appendDefValue(yytext,yyleng);
+			  } else {
+			      yy_pop_state(); return (VP_DEFARG);
+ 			}}
+<ARGMODE>"`"{symb}	{ return (VP_DEFREF); }  /* defref in defref */
+<ARGMODE>[^\/\*\n\r\\(,)\"`]+	|
 <ARGMODE>.		{ appendDefValue(yytext,yyleng); }
 
 	/* One line comments. */
@@ -199,21 +210,21 @@ psl		[p]sl
 <INITIAL,PSLMULM,PSLONEM>.	{ return (VP_TEXT); }
 %%
 
-void V3PreLex::setStateDefArg() {
+void V3PreLex::pushStateDefArg() {
     // Enter define substitution argument state
     yy_push_state(ARGMODE);
-    m_parenLevel = 1;
+    m_parenLevel = 0;
     m_defValue = "";
 }
 
-void V3PreLex::setStateDefValue() {
+void V3PreLex::pushStateDefValue() {
     // Enter define value state
     yy_push_state(DEFMODE);
     m_parenLevel = 0;
     m_defValue = "";
 }
 
-void V3PreLex::setStateIncFilename() {
+void V3PreLex::pushStateIncFilename() {
     // Enter include <> filename state
     yy_push_state(INCMODE);
     yymore();
diff --git a/src/V3PreProc.cpp b/src/V3PreProc.cpp
index a2130a850..6eb6bbc5b 100644
--- a/src/V3PreProc.cpp
+++ b/src/V3PreProc.cpp
@@ -61,6 +61,28 @@ public:
     string params() const { return m_params; }
 };
 
+//*************************************************************************
+
+class V3DefineRef {
+    // One for each pending define substitution
+    string	m_name;		// Define last name being defined
+    string	m_params;	// Define parameter list for next expansion
+    string	m_nextarg;	// String being built for next argument
+    int		m_parenLevel;	// Parenthesis counting inside def args
+    
+    vector<string> m_args;	// List of define arguments
+public:
+    string name() const { return m_name; }
+    string params() const { return m_params; }
+    string nextarg() const { return m_nextarg; }
+    void nextarg(const string& value) { m_nextarg = value; }
+    int parenLevel() const { return m_parenLevel; }
+    vector<string>& args() { return m_args; }
+    V3DefineRef(const string& name, const string& params, int pl)
+	: m_name(name), m_params(params), m_parenLevel(pl) {}
+    ~V3DefineRef() {}
+};
+
 //*************************************************************************
 // Data for a preprocessor instantiation.
 
@@ -88,14 +110,12 @@ struct V3PreProcImp : public V3PreProc {
     bool	m_rawAtBol;	///< Last rawToken left us at beginning of line
 
     // For defines
-    string	m_defName;	// Define last name being defined
-    string	m_defParams;	// Define parameter list for next expansion
+    stack<V3DefineRef> m_defRefs; // Pending definine substitution
     stack<bool> m_ifdefStack;	// Stack of true/false emitting evaluations
-    vector<string> m_defArgs;	// List of define arguments
     unsigned	m_defDepth;	// How many `defines deep
 
     // Defines list
-    DefinesMap	m_defines;		// Map of defines
+    DefinesMap	m_defines;	// Map of defines
 
     // For getline()
     string	m_lineChars;	// Characters left for next line
@@ -113,7 +133,7 @@ struct V3PreProcImp : public V3PreProc {
 private:
     // Internal methods
     void eof();
-    string defineSubst();
+    string defineSubst(V3DefineRef* refp);
     void addLineComment(int enter_exit_level);
 
     bool defExists(const string& name);
@@ -122,6 +142,7 @@ private:
     FileLine* defFileline(const string& name);
 
     bool commentTokenMatch(string& cmdr, const char* strg);
+    string trimWhitespace(const string& strg);
 
     void parsingOn() {
 	m_off--;
@@ -149,7 +170,6 @@ public:
     V3PreProcImp(FileLine* fl) : V3PreProc(fl) {
 	m_lexp = NULL;	 // Closed.
 	m_state = ps_TOP;
-	m_defName = "";
 	m_off = 0;
 	m_lineChars = "";
 	m_lastSym = "";
@@ -348,7 +368,15 @@ const char* V3PreProcImp::tokenName(int tok) {
     } 
 }
 
-string V3PreProcImp::defineSubst() {
+string V3PreProcImp::trimWhitespace(const string& strg) {
+    string out = strg;
+    while (out.length()>0 && isspace(out[0])) {
+	out.erase(0,1);
+    }
+    return out;
+}
+
+string V3PreProcImp::defineSubst(V3DefineRef* refp) {
     // Substitute out defines in a argumented define reference.
     // We could push the define text back into the lexer, but that's slow
     // and would make recursive definitions and parameter handling nasty.
@@ -356,25 +384,27 @@ string V3PreProcImp::defineSubst() {
     // Note we parse the definition parameters and value here.  If a
     // parameterized define is used many, many times, we could cache the
     // parsed result.
-    UINFO(4,"defineSubstIn  `"<<m_defName<<" "<<m_defParams<<endl);
-    for (unsigned i=0; i<m_defArgs.size(); i++) {
-	UINFO(4,"defineArg["<<i<<"] = "<<m_defArgs[i]<<endl);
+    UINFO(4,"defineSubstIn  `"<<refp->name()<<" "<<refp->params()<<endl);
+    for (unsigned i=0; i<refp->args().size(); i++) {
+	UINFO(4,"defineArg["<<i<<"] = "<<refp->args()[i]<<endl);
     }
     // Grab value
-    string value = defValue(m_defName);
-    UINFO(4,"defineValue    `"<<value<<endl);
+    string value = defValue(refp->name());
+    UINFO(4,"defineValue    '"<<value<<"'"<<endl);
 
     map<string,string> argValueByName;
     {   // Parse argument list into map
 	unsigned numArgs=0;
 	string argName;
-	for (const char* cp=m_defParams.c_str(); *cp; cp++) {
+	for (const char* cp=refp->params().c_str(); *cp; cp++) {
 	    if (*cp=='(') {
 	    } else if (argName=="" && isspace(*cp)) {
 	    } else if (isspace(*cp) || *cp==')' || *cp==',') {
 		if (argName!="") {
-		    if (m_defArgs.size() >= numArgs) {
-			argValueByName[argName] = m_defArgs[numArgs];
+		    if (refp->args().size() > numArgs) {
+			// A call `def( a ) must be equivelent to `def(a ), so trimWhitespace
+			// Note other sims don't trim trailing whitespace, so we don't either.
+			argValueByName[argName] = trimWhitespace(refp->args()[numArgs]);
 		    }
 		    numArgs++;
 		    //cout << "  arg "<<argName<<endl;
@@ -385,13 +415,13 @@ string V3PreProcImp::defineSubst() {
 		argName += *cp;
 	    }
 	}
-	if (m_defArgs.size() != numArgs) {
-	    fileline()->v3error("Define passed wrong number of arguments: "+m_defName+"\n");
-	    return " `"+m_defName+" ";
+	if (refp->args().size() != numArgs) {
+	    fileline()->v3error("Define passed wrong number of arguments: "+refp->name()+"\n");
+	    return " `"+refp->name()+" ";
 	}
     }
 
-    string out = " ";
+    string out = "";
     {   // Parse substitution define using arguments
 	string argName;
 	string prev;
@@ -447,8 +477,7 @@ string V3PreProcImp::defineSubst() {
 	}
     }
 
-    out += " ";
-    UINFO(4,"defineSubstOut "<<out<<endl);
+    UINFO(4,"defineSubstOut '"<<out<<"'"<<endl);
     return out;
 }
 
@@ -565,8 +594,9 @@ int V3PreProcImp::getRawToken() {
 	    string::size_type pos;
 	    while ((pos=buf.find("\n")) != string::npos) { buf.replace(pos, 1, "\\n"); }
 	    while ((pos=buf.find("\r")) != string::npos) { buf.replace(pos, 1, "\\r"); }
-	    fprintf (stderr, "%d: RAW %d %d:  %-10s: %s\n",
-		     fileline()->lineno(), m_off, m_state, tokenName(tok), buf.c_str());
+	    fprintf (stderr, "%d: RAW %s s%d dr%d:  %-10s: %s\n",
+		     fileline()->lineno(), m_off?"of":"on", m_state, m_defRefs.size(),
+		     tokenName(tok), buf.c_str());
 	}
     
 	// On EOF, try to pop to upper level includes, as needed.
@@ -651,7 +681,7 @@ int V3PreProcImp::getToken() {
 		else if (m_stateFor==VP_DEFINE) {
 		    // m_lastSym already set.
 		    m_state = ps_DEFVALUE;
-		    m_lexp->setStateDefValue();
+		    m_lexp->pushStateDefValue();
 		}
 		else fileline()->v3fatalSrc("Bad case\n");
 		goto next_tok;
@@ -698,7 +728,7 @@ int V3PreProcImp::getToken() {
 			   && isspace(m_lexp->m_defValue[m_lexp->m_defValue.length()-1-trailspace])) trailspace++;
 		    if (trailspace) m_lexp->m_defValue.erase(m_lexp->m_defValue.length()-trailspace,trailspace);
 		    // Define it
-		    UINFO(4,"Define "<<m_lastSym<<" = "<<m_lexp->m_defValue<<endl);
+		    UINFO(4,"Define "<<m_lastSym<<" = '"<<m_lexp->m_defValue<<"'"<<endl);
 		    define(fileline(), m_lastSym, m_lexp->m_defValue, params);
 		}
 	    } else {
@@ -712,40 +742,57 @@ int V3PreProcImp::getToken() {
 	}
 	case ps_DEFPAREN: {
 	    if (tok==VP_TEXT && yyleng==1 && yytext[0]=='(') {
-		m_defArgs.clear();
 		m_state = ps_DEFARG;
-		m_lexp->setStateDefArg();
 		goto next_tok;
 	    } else {
 		m_state = ps_TOP;
-		fileline()->v3error("Expecting ( to begin argument list for define reference `"<<m_defName);
+		if (m_defRefs.empty()) v3fatalSrc("Shouldn't be in DEFPAREN w/o active defref");
+		V3DefineRef* refp = &(m_defRefs.top());
+		fileline()->v3error("Expecting ( to begin argument list for define reference `"<<refp->name());
 		goto next_tok;
 	    }
 	}
 	case ps_DEFARG: {
-	    if (tok==VP_DEFARG) {
-		UINFO(4,"   Defarg "<<m_defName<<" arg="<<m_lexp->m_defValue<<endl);
-		goto next_tok;  // Next is a , or )
-	    } else if (tok==VP_TEXT && yyleng==1 && yytext[0]==',') {
-		m_defArgs.push_back(m_lexp->m_defValue);
+	    if (m_defRefs.empty()) v3fatalSrc("Shouldn't be in DEFARG w/o active defref");
+	    V3DefineRef* refp = &(m_defRefs.top());
+	    refp->nextarg(refp->nextarg()+m_lexp->m_defValue); m_lexp->m_defValue="";
+	    if (tok==VP_DEFARG && yyleng==1 && yytext[0]==',') {
+		refp->args().push_back(refp->nextarg());
 		m_state = ps_DEFARG;
-		m_lexp->setStateDefArg();
+		m_lexp->pushStateDefArg();
+		refp->nextarg("");
 		goto next_tok;
-	    } else if (tok==VP_TEXT && yyleng==1 && yytext[0]==')') {
-		m_defArgs.push_back(m_lexp->m_defValue);
-		string out = defineSubst();
-		m_lexp->m_parenLevel = 0;
+	    } else if (tok==VP_DEFARG && yyleng==1 && yytext[0]==')') {
+		refp->args().push_back(refp->nextarg());
+		string out = defineSubst(refp);
+		// Substitute in and prepare for next action
+		// Similar code in non-parenthesized define (Search for END_OF_DEFARG)
+		m_defRefs.pop();
 		m_lexp->unputString(out.c_str());
-		// Prepare for next action
-		m_defArgs.clear();
-		m_state = ps_TOP;
+		if (m_defRefs.empty()) {
+		    m_state = ps_TOP;
+		    m_lexp->m_parenLevel = 0;
+		}
+		else {  // Finished a defref inside a upper defref
+		    refp = &(m_defRefs.top());  // We popped, so new top
+		    m_lexp->m_parenLevel = refp->parenLevel();
+		    m_state = ps_DEFARG;
+		}
+		goto next_tok;
+	    } else if (tok==VP_DEFREF) {
+		// Expand it, then state will come back here
+		// Value of building argument is data before the lower defref
+		// we'll append it when we push the argument.
+		break;
+	    } else if (tok==VP_SYMBOL || tok==VP_STRING || VP_TEXT || VP_WHITE || VP_PSL) {
+		string rtn; rtn.assign(yytext,yyleng);
+		refp->nextarg(refp->nextarg()+rtn);
 		goto next_tok;
 	    } else {
 		fileline()->v3error("Expecting ) or , to end argument list for define reference. Found: "<<tokenName(tok));
 		m_state = ps_TOP;
 		goto next_tok;
 	    }
-	    goto next_tok;
 	}
 	case ps_INCNAME: {
 	    if (tok==VP_STRING) {
@@ -763,7 +810,7 @@ int V3PreProcImp::getToken() {
 	    else if (tok==VP_TEXT && yyleng==1 && yytext[0]=='<') {
 		// include <filename>
 		m_state = ps_INCNAME;  // Still
-		m_lexp->setStateIncFilename();
+		m_lexp->pushStateIncFilename();
 		goto next_tok;
 	    }
 	    else if (tok==VP_DEFREF) {
@@ -844,18 +891,17 @@ int V3PreProcImp::getToken() {
 		else {
 		    string params = defParams(name);
 		    if (params=="0" || params=="") {  // Found, as simple substitution
-			// Pack spaces around the define value, as there must be token boundaries around it.
-			// It also makes it more obvious where defines got substituted.
-			string out = " "+defValue(name)+" ";
-			UINFO(4,"Defref `"<<name<<" => "<<out<<endl);
+			string out = defValue(name);
+			UINFO(4,"Defref `"<<name<<" => '"<<out<<"'"<<endl);
+			// Similar code in parenthesized define (Search for END_OF_DEFARG)
 			m_lexp->unputString(out.c_str());
 			goto next_tok;
 		    }
 		    else {  // Found, with parameters
 			UINFO(4,"Defref `"<<name<<" => parameterized"<<endl);
-			m_defName = name;
-			m_defParams = params;
+			m_defRefs.push(V3DefineRef(name, params, m_lexp->m_parenLevel));
 			m_state = ps_DEFPAREN;  m_stateFor = tok;
+			m_lexp->pushStateDefArg();
 			goto next_tok;
 		    }
 		}
diff --git a/test_regress/t/t_pp_display.pl b/test_regress/t/t_pp_display.pl
new file mode 100755
index 000000000..18d89e53f
--- /dev/null
+++ b/test_regress/t/t_pp_display.pl
@@ -0,0 +1,32 @@
+#!/usr/bin/perl
+if (!$::Driver) { use FindBin; exec("./driver.pl", @ARGV, $0); die; }
+# $Id: t_delay.pl 965 2007-10-31 20:29:07Z wsnyder $
+# DESCRIPTION: Verilator: Verilog Test driver/expect definition
+#
+# Copyright 2003 by Wilson Snyder. This program is free software; you can
+# redistribute it and/or modify it under the terms of either the GNU
+# General Public License or the Perl Artistic License.
+
+compile (
+	 );
+
+execute (
+	 check_finished=>1,
+	 expect=>quotemeta(
+'pre thrupre thrumid thrupost post: "right side"
+left side: "right side"
+left side : "right side "
+left_side : "left_side "
+na : "left_side "
+prep ( midp1 left_side midp2 ( outp ) ) : "left_side "
+na: "nana"
+left_side left_side : "left_side left_side "
+: ""
+left side: "right side"
+left side  : "right side  "
+twoline: "first   second"
+*-* All Finished *-*
+'));
+
+ok(1);
+1;
diff --git a/test_regress/t/t_pp_display.v b/test_regress/t/t_pp_display.v
new file mode 100644
index 000000000..8ff1627ce
--- /dev/null
+++ b/test_regress/t/t_pp_display.v
@@ -0,0 +1,56 @@
+// $Id: t_delay.v 965 2007-10-31 20:29:07Z wsnyder $
+// DESCRIPTION: Verilator: Verilog Test module
+//
+// This file ONLY is placed into the Public Domain, for any use,
+// without warranty, 2008 by Wilson Snyder.
+
+module t;
+   wire d1 = 1'b1;
+   wire d2 = 1'b1;
+   wire d3 = 1'b1;
+   wire o1,o2,o3;
+   add1 add1 (d1,o1);
+   add2 add2 (d2,o2);
+
+`define ls left_side
+`define rs left_side
+`define noarg  na
+`define thru(x) x
+`define thruthru `ls `rs	// Doesn't expand
+`define msg(x,y) `"x: `\`"y`\`"`"
+   initial begin
+      //$display(`msg( \`, \`));  // Illegal
+      $display(`msg(pre `thru(thrupre `thru(thrumid) thrupost) post,right side));
+      $display(`msg(left side,right side));
+      $display(`msg( left side , right side ));
+      $display(`msg( `ls , `rs ));
+      $display(`msg( `noarg , `rs ));
+      $display(`msg( prep ( midp1 `ls midp2 ( outp ) ) , `rs ));
+      $display(`msg(`noarg,`noarg`noarg));
+      $display(`msg( `thruthru , `thruthru ));   // Results vary between simulators
+      $display(`msg(`thru(),));  // Empty
+      $display(`msg(`thru(left side),`thru(right side)));
+      $display(`msg( `thru( left side ) , `thru( right side ) ));
+
+`define twoline first \
+ second
+      $display(`msg(twoline, `twoline));
+
+      //$display(`msg(left side, \ right side \ ));  // Not sure \{space} is legal.
+      $write("*-* All Finished *-*\n");
+      $finish;
+   end
+endmodule
+
+`define ADD_UP(a,c)          \
+wire  tmp_``a = a; \
+wire  tmp_``c = tmp_``a + 1; \
+assign c = tmp_``c ;
+
+module add1 ( input wire d1, output wire o1);
+ `ADD_UP(d1,o1)   // expansion is OK
+endmodule
+module add2 ( input wire d2, output wire o2);
+ `ADD_UP( d2 , o2 )  // expansion is bad
+endmodule
+// `ADD_UP( \d3 , \o3 )  // This really is illegal
diff --git a/test_regress/t/t_preproc.out b/test_regress/t/t_preproc.out
index 8a8b4ba1e..22ccea938 100644
--- a/test_regress/t/t_preproc.out
+++ b/test_regress/t/t_preproc.out
@@ -15,7 +15,7 @@
 
 At file t/t_preproc_inc2.v  line 4
  
-  
+ 
 `line 6 "t/t_preproc_inc2.v" 0
 `line 1 "t/t_preproc_inc3.v" 1
 `line 2 "inc3_a_filename_from_line_directive" 0
@@ -41,7 +41,7 @@ At file t/t_preproc_inc2.v  line 4
 
 `line 18 "inc3_a_filename_from_line_directive" 2
 `line 6 "t/t_preproc_inc2.v" 0
- 
+
 `line 7 "t/t_preproc_inc2.v" 2
 `line 9 "t/t_preproc.v" 0
 
@@ -78,8 +78,8 @@ text.
 
  
  
- foo  bar 
- foobar2 
+foo  bar
+foobar2
 
  
 
@@ -91,7 +91,7 @@ text.
 
 
 
- first part    		second part    		third part 
+first part    		second part    		third part
 Line_Preproc_Check 49
 
 
@@ -100,37 +100,46 @@ Line_Preproc_Check 49
 
  
  
-  deep   deep  
+deep deep
 
  
  
 "Inside: `nosubst"
- "`nosubst" 		  
+"`nosubst"		  
 
  
- x y LLZZ x y 
-  p q LLZZ p q     r   s  LLZZ  r   s   LLZZ  p q LLZZ p q     r   s  LLZZ  r   s   
+x y LLZZ x y
+p q LLZZ p q r  s  LLZZ r  s  LLZZ p q LLZZ p q r  s  LLZZ r  s 
 
 
 
- firstline	 	comma","line LLZZ firstline	 	comma","line 
+firstline	 comma","line LLZZ firstline	 comma","line
 
  
-  x   y LLZZ "a"  y 
+x  y LLZZ "a" y
 
  
- (a,b) (a,b)
+(a,b)(a,b)
 
  
-$display( "left side: \" right side\"" )
+$display("left side: \"right side\"")
 
  
- bar_suffix   
+bar_suffix  
 
  
 
- $c("Zap(\"",bug1,"\");"); ;
- $c("Zap(\"","bug2","\");"); ;
+$c("Zap(\"",bug1,"\");");;
+$c("Zap(\"","bug2","\");");;
+
+
+ 
+
+
+
+
+wire  tmp_d1 = d1;  wire  tmp_o1 = tmp_d1 + 1;  assign o1 = tmp_o1 ;   
+wire  tmp_d2  = d2 ;  wire  tmp_o2  = tmp_d2  + 1;  assign o2  = tmp_o2  ;  
 
 
 
@@ -139,7 +148,7 @@ $display( "left side: \" right side\"" )
  
    
 
-`line 95 "t/t_preproc.v" 0
+`line 104 "t/t_preproc.v" 0
 
-Line_Preproc_Check 96
-`line 97 "t/t_preproc.v" 2
+Line_Preproc_Check 105
+`line 106 "t/t_preproc.v" 2
diff --git a/test_regress/t/t_preproc.v b/test_regress/t/t_preproc.v
index 04ceeca3c..19af7a196 100644
--- a/test_regress/t/t_preproc.v
+++ b/test_regress/t/t_preproc.v
@@ -86,6 +86,15 @@ $display(`msg(left side, right side))
 `zap(bug1);
 `zap("bug2");
 
+// rt.cpan.org bug34429
+`define ADD_UP(a,c)          \
+wire  tmp_``a = a; \
+wire  tmp_``c = tmp_``a + 1; \
+assign c = tmp_``c ;
+
+`ADD_UP(d1,o1)   // expansion is OK
+`ADD_UP( d2 , o2 )  // expansion is bad
+
 //===========================================================================
 // Ifdef
 
diff --git a/test_regress/t/t_preproc_psl_on.out b/test_regress/t/t_preproc_psl_on.out
index 3f935baf2..0f2ad24a7 100644
--- a/test_regress/t/t_preproc_psl_on.out
+++ b/test_regress/t/t_preproc_psl_on.out
@@ -63,7 +63,7 @@ Hello in t_preproc_psl.v
 
 
  
-    psl  assert always  cyc !=10;
+    psl  assert always cyc!=10;
 
  
   `psl