diff --git a/core/modules/parsers/wikiparser/rules/macrodef.js b/core/modules/parsers/wikiparser/rules/macrodef.js
index daf854cab..cc76ca7ec 100644
--- a/core/modules/parsers/wikiparser/rules/macrodef.js
+++ b/core/modules/parsers/wikiparser/rules/macrodef.js
@@ -84,7 +84,8 @@ exports.parse = function() {
 			value: {type: "string", value: text}
 		},
 		children: [],
-		params: params
+		params: params,
+		isMacroDefinition: true
 	}];
 };
 
diff --git a/core/modules/widgets/importvariables.js b/core/modules/widgets/importvariables.js
index 774f8c7aa..cdb351f8d 100644
--- a/core/modules/widgets/importvariables.js
+++ b/core/modules/widgets/importvariables.js
@@ -63,7 +63,8 @@ ImportVariablesWidget.prototype.execute = function(tiddlerList) {
 				addWidgetNode({
 					type: "set",
 					attributes: parseTreeNode.attributes,
-					params: parseTreeNode.params
+					params: parseTreeNode.params,
+					isMacroDefinition: parseTreeNode.isMacroDefinition
 				});
 				parseTreeNode = parseTreeNode.children[0];
 			}
diff --git a/core/modules/widgets/setvariable.js b/core/modules/widgets/setvariable.js
index a72337cf3..40dbadf16 100755
--- a/core/modules/widgets/setvariable.js
+++ b/core/modules/widgets/setvariable.js
@@ -48,7 +48,7 @@ SetWidget.prototype.execute = function() {
 	this.setValue = this.getAttribute("value");
 	this.setEmptyValue = this.getAttribute("emptyValue");
 	// Set context variable
-	this.setVariable(this.setName,this.getValue(),this.parseTreeNode.params);
+	this.setVariable(this.setName,this.getValue(),this.parseTreeNode.params,!!this.parseTreeNode.isMacroDefinition);
 	// Construct the child widgets
 	this.makeChildWidgets();
 };
diff --git a/core/modules/widgets/widget.js b/core/modules/widgets/widget.js
index a55d8adf3..1004c4b5a 100755
--- a/core/modules/widgets/widget.js
+++ b/core/modules/widgets/widget.js
@@ -71,9 +71,10 @@ Set the value of a context variable
 name: name of the variable
 value: value of the variable
 params: array of {name:, default:} for each parameter
+isMacroDefinition: true if the variable is set via a \define macro pragma (and hence should have variable substitution performed)
 */
-Widget.prototype.setVariable = function(name,value,params) {
-	this.variables[name] = {value: value, params: params};
+Widget.prototype.setVariable = function(name,value,params,isMacroDefinition) {
+	this.variables[name] = {value: value, params: params, isMacroDefinition: !!isMacroDefinition};
 };
 
 /*
@@ -102,7 +103,11 @@ Widget.prototype.getVariableInfo = function(name,options) {
 		$tw.utils.each(params,function(param) {
 			value = $tw.utils.replaceString(value,new RegExp("\\$" + $tw.utils.escapeRegExp(param.name) + "\\$","mg"),param.value);
 		});
-		value = this.substituteVariableReferences(value);
+		// Only substitute variable references if this variable was defined with the \define pragma
+if(value.slice(0,4) ==="{{$(") {debugger;}
+		if(variable.isMacroDefinition) {
+			value = this.substituteVariableReferences(value);			
+		}
 		return {
 			text: value,
 			params: params