diff --git a/src/bytecode.ts b/src/bytecode.ts
index db39eda..ae8b190 100644
--- a/src/bytecode.ts
+++ b/src/bytecode.ts
@@ -23,6 +23,74 @@ export type Constant =
 //   42       -> number constant (e.g., PUSH 42)
 //   "str"    -> string constant (e.g., PUSH "hello")
 //   'str'    -> string constant (e.g., PUSH 'hello')
+//
+// Function definitions:
+//   MAKE_FUNCTION (x y) #7           -> basic function
+//   MAKE_FUNCTION (x y=42) #7        -> with defaults
+//   MAKE_FUNCTION (x ...rest) #7     -> variadic
+//   MAKE_FUNCTION (x @named) #7      -> kwargs
+//
+
+function parseFunctionParams(paramStr: string, constants: Constant[]): {
+  params: string[]
+  defaults: Record<string, number>
+  variadic: boolean
+  named: boolean
+} {
+  const params: string[] = []
+  const defaults: Record<string, number> = {}
+  let variadic = false
+  let kwargs = false
+
+  // Remove parens and split by whitespace
+  const paramList = paramStr.slice(1, -1).trim()
+  if (!paramList) {
+    return { params, defaults, variadic, named: kwargs }
+  }
+
+  const parts = paramList.split(/\s+/)
+
+  for (const part of parts) {
+    // Check for named args (@name)
+    if (part.startsWith('@')) {
+      kwargs = true
+      params.push(part.slice(1))
+
+    } else if (part.startsWith('...')) {
+      // Check for variadic (...name)
+      variadic = true
+      params.push(part.slice(3))
+
+    } else if (part.includes('=')) {
+      // Check for default value (name=value)
+      const [name, defaultValue] = part.split('=').map(s => s.trim())
+      params.push(name!)
+
+      // Parse default value and add to constants
+      if (/^-?\d+(\.\d+)?$/.test(defaultValue!)) {
+        constants.push(toValue(parseFloat(defaultValue!)))
+      } else if (/^['\"].*['\"]$/.test(defaultValue!)) {
+        constants.push(toValue(defaultValue!.slice(1, -1)))
+      } else if (defaultValue === 'true') {
+        constants.push(toValue(true))
+      } else if (defaultValue === 'false') {
+        constants.push(toValue(false))
+      } else if (defaultValue === 'null') {
+        constants.push(toValue(null))
+      } else {
+        throw new Error(`Invalid default value: ${defaultValue}`)
+      }
+
+      defaults[name!] = constants.length - 1
+
+    } else {
+      params.push(part)
+    }
+  }
+
+  return { params, defaults, variadic, named: kwargs }
+}
+
 export function toBytecode(str: string): Bytecode /* throws */ {
   const lines = str.trim().split("\n")
 
@@ -47,7 +115,33 @@ export function toBytecode(str: string): Bytecode /* throws */ {
     if (rest.length > 0) {
       const operand = rest.join(' ')
 
-      if (operand.startsWith('#')) {
+      // Special handling for MAKE_FUNCTION with paren syntax
+      if (opCode === OpCode.MAKE_FUNCTION && operand.startsWith('(')) {
+        // Parse: MAKE_FUNCTION (params) #body
+        const match = operand.match(/^(\(.*?\))\s+(#\d+)$/)
+        if (!match) {
+          throw new Error(`Invalid MAKE_FUNCTION syntax: ${operand}`)
+        }
+
+        const paramStr = match[1]!
+        const bodyStr = match[2]!
+        const body = parseInt(bodyStr.slice(1))
+
+        const { params, defaults, variadic, named: kwargs } = parseFunctionParams(paramStr, bytecode.constants)
+
+        // Add function definition to constants
+        bytecode.constants.push({
+          type: 'function_def',
+          params,
+          defaults,
+          body,
+          variadic,
+          kwargs
+        })
+
+        operandValue = bytecode.constants.length - 1
+      }
+      else if (operand.startsWith('#')) {
         // immediate number
         operandValue = parseInt(operand.slice(1))
 
diff --git a/tests/bytecode.test.ts b/tests/bytecode.test.ts
index 1ebbe3a..bf81867 100644
--- a/tests/bytecode.test.ts
+++ b/tests/bytecode.test.ts
@@ -1,6 +1,7 @@
 import { test, expect } from "bun:test"
 import { toBytecode } from "#bytecode"
 import { OpCode } from "#opcode"
+import { VM } from "#vm"
 
 test("string compilation", () => {
   const str = `
@@ -21,3 +22,111 @@ test("string compilation", () => {
   })
 })
 
+
+test("MAKE_FUNCTION - basic function", async () => {
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION () #3
+    CALL #0
+    HALT
+    PUSH 42
+    RETURN
+  `)
+
+  const vm = new VM(bytecode)
+  const result = await vm.run()
+  expect(result).toEqual({ type: 'number', value: 42 })
+})
+
+test("MAKE_FUNCTION - function with parameters", async () => {
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION (x y) #5
+    PUSH 10
+    PUSH 20
+    CALL #2
+    HALT
+    LOAD x
+    LOAD y
+    ADD
+    RETURN
+  `)
+
+  const vm = new VM(bytecode)
+  const result = await vm.run()
+  expect(result).toEqual({ type: 'number', value: 30 })
+})
+
+test("MAKE_FUNCTION - function with default parameters", async () => {
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION (x y=100) #4
+    PUSH 10
+    CALL #1
+    HALT
+    LOAD x
+    LOAD y
+    ADD
+    RETURN
+  `)
+
+  const vm = new VM(bytecode)
+  const result = await vm.run()
+  expect(result).toEqual({ type: 'number', value: 110 })
+})
+
+test("MAKE_FUNCTION - tail recursive countdown", async () => {
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION (n) #6
+    STORE countdown
+    LOAD countdown
+    PUSH 5
+    CALL #1
+    HALT
+    LOAD n
+    PUSH 0
+    EQ
+    JUMP_IF_FALSE #2
+    PUSH "done"
+    RETURN
+    LOAD countdown
+    LOAD n
+    PUSH 1
+    SUB
+    TAIL_CALL #1
+  `)
+
+  const vm = new VM(bytecode)
+  const result = await vm.run()
+  expect(result).toEqual({ type: 'string', value: 'done' })
+})
+
+test("MAKE_FUNCTION - multiple default values", async () => {
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION (a=1 b=2 c=3) #3
+    CALL #0
+    HALT
+    LOAD a
+    LOAD b
+    LOAD c
+    ADD
+    ADD
+    RETURN
+  `)
+
+  const vm = new VM(bytecode)
+  const result = await vm.run()
+  expect(result).toEqual({ type: 'number', value: 6 })
+})
+
+test("MAKE_FUNCTION - default with string", async () => {
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION (name="World") #3
+    CALL #0
+    HALT
+    LOAD name
+    RETURN
+  `)
+
+  const vm = new VM(bytecode)
+  const result = await vm.run()
+  expect(result).toEqual({ type: 'string', value: 'World' })
+})
+