diff --git a/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/FunctionCall.hs b/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/FunctionCall.hs
index 04040d4b12..33c59e53e0 100644
--- a/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/FunctionCall.hs
+++ b/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/FunctionCall.hs
@@ -7,10 +7,11 @@ import Data.HashMap.Strict qualified as HashMap
 import Juvix.Compiler.Internal.Extra
 import Juvix.Compiler.Internal.Translation.FromInternal.Analysis.Termination.Data
 import Juvix.Prelude
+import Safe (headMay)
 
 viewCall ::
   forall r.
-  (Members '[Reader SizeInfo] r) =>
+  (Members '[Reader SizeInfoMap] r) =>
   Expression ->
   Sem r (Maybe FunCall)
 viewCall = \case
@@ -19,12 +20,15 @@ viewCall = \case
   ExpressionApplication (Application f x impl)
     | isImplicitOrInstance impl -> viewCall f -- implicit arguments are ignored
     | otherwise -> do
-        c <- viewCall f
-        x' <- callArg
-        return $ over callArgs (`snoc` x') <$> c
+        mc <- viewCall f
+        case mc of
+          Just c -> do
+            x' <- callArg (c ^. callRef)
+            return $ Just $ over callArgs (`snoc` x') c
+          Nothing -> return Nothing
     where
-      callArg :: Sem r (CallRow, Expression)
-      callArg = do
+      callArg :: FunctionRef -> Sem r (CallRow, Expression)
+      callArg fref = do
         lt <- (^. callRow) <$> lessThan
         eq <- (^. callRow) <$> equalTo
         return (CallRow (lt `mplus` eq), x)
@@ -33,7 +37,7 @@ viewCall = \case
           lessThan = case viewExpressionAsPattern x of
             Nothing -> return (CallRow Nothing)
             Just x' -> do
-              s <- asks (findIndex (elem x') . (^. sizeSmaller))
+              s <- asks (findIndex (elem x') . (^. sizeSmaller) . findSizeInfo)
               return $ case s of
                 Nothing -> CallRow Nothing
                 Just s' -> CallRow (Just (s', RLe))
@@ -41,11 +45,37 @@ viewCall = \case
           equalTo =
             case viewExpressionAsPattern x of
               Just x' -> do
-                s <- asks (elemIndex x' . (^. sizeEqual))
+                s <- asks (elemIndex x' . (^. sizeEqual) . findSizeInfo)
                 return $ case s of
                   Nothing -> CallRow Nothing
                   Just s' -> CallRow (Just (s', REq))
               Nothing -> return (CallRow Nothing)
+          findSizeInfo :: SizeInfoMap -> SizeInfo
+          findSizeInfo infos =
+            {-
+            If the call is not to any nested function being defined, then we
+            associate it with the most nested function. Without this,
+            termination for mutually recursive functions doesn't work.
+
+            Consider:
+            ```
+            isEven (x : Nat) : Bool :=
+              let
+                isEven' : Nat -> Bool
+                  | zero := true
+                  | (suc n) := isOdd' n;
+                isOdd' : Nat -> Bool
+                  | zero := false
+                  | (suc n) := isEven' n;
+               in isEven' x;
+            ```
+            The call `isEven' n` inside `isOdd'` needs to be associated with
+            `isOdd'`, not with `isEven`, and not just forgotten.
+            -}
+            fromMaybe (maybe emptySizeInfo snd . headMay $ infos ^. sizeInfoMap)
+              . (lookup fref)
+              . (^. sizeInfoMap)
+              $ infos
   _ -> return Nothing
   where
     singletonCall :: FunctionRef -> FunCall
diff --git a/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Checker.hs b/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Checker.hs
index 08d56beb80..9923e223fa 100644
--- a/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Checker.hs
+++ b/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Checker.hs
@@ -59,6 +59,7 @@ instance Scannable Expression where
   buildCallMap =
     run
       . execState emptyCallMap
+      . runReader emptySizeInfoMap
       . scanTopExpression
 
 runTerminationState :: TerminationState -> Sem (Termination ': r) a -> Sem r (TerminationState, a)
@@ -122,21 +123,21 @@ scanInductive i = do
 scanMutualStatement :: (Members '[State CallMap] r) => MutualStatement -> Sem r ()
 scanMutualStatement = \case
   StatementInductive i -> scanInductive i
-  StatementFunction i -> scanFunctionDef i
+  StatementFunction i -> runReader emptySizeInfoMap $ scanFunctionDef i
   StatementAxiom a -> scanAxiom a
 
 scanAxiom :: (Members '[State CallMap] r) => AxiomDef -> Sem r ()
 scanAxiom = scanTopExpression . (^. axiomType)
 
 scanFunctionDef ::
-  (Members '[State CallMap] r) =>
+  (Members '[State CallMap, Reader SizeInfoMap] r) =>
   FunctionDef ->
   Sem r ()
 scanFunctionDef f@FunctionDef {..} = do
   registerFunctionDef f
   runReader (Just _funDefName) $ do
     scanTypeSignature _funDefType
-    scanFunctionBody _funDefBody
+    scanFunctionBody _funDefName _funDefBody
     scanDefaultArgs _funDefArgsInfo
 
 scanDefaultArgs ::
@@ -153,38 +154,41 @@ scanTypeSignature ::
   (Members '[State CallMap, Reader (Maybe FunctionRef)] r) =>
   Expression ->
   Sem r ()
-scanTypeSignature = runReader emptySizeInfo . scanExpression
+scanTypeSignature = runReader emptySizeInfoMap . scanExpression
 
 scanFunctionBody ::
   forall r.
-  (Members '[State CallMap, Reader (Maybe FunctionRef)] r) =>
+  (Members '[State CallMap, Reader SizeInfoMap, Reader (Maybe FunctionRef)] r) =>
+  FunctionName ->
   Expression ->
   Sem r ()
-scanFunctionBody topbody = go [] topbody
+scanFunctionBody funName topbody = go [] topbody
   where
     go :: [PatternArg] -> Expression -> Sem r ()
     go revArgs body = case body of
       ExpressionLambda Lambda {..} -> mapM_ goClause _lambdaClauses
-      _ -> runReader (mkSizeInfo (reverse revArgs)) (scanExpression body)
+      _ ->
+        local
+          (over sizeInfoMap ((funName, mkSizeInfo (reverse revArgs)) :))
+          (scanExpression body)
       where
         goClause :: LambdaClause -> Sem r ()
         goClause (LambdaClause pats clBody) = go (reverse (toList pats) ++ revArgs) clBody
 
 scanLet ::
-  (Members '[State CallMap, Reader (Maybe FunctionRef), Reader SizeInfo] r) =>
+  (Members '[State CallMap, Reader (Maybe FunctionRef), Reader SizeInfoMap] r) =>
   Let ->
   Sem r ()
 scanLet l = do
   mapM_ scanLetClause (l ^. letClauses)
   scanExpression (l ^. letExpression)
 
--- NOTE that we forget about the arguments of the hosting function
-scanLetClause :: (Members '[State CallMap] r) => LetClause -> Sem r ()
+scanLetClause :: (Members '[State CallMap, Reader SizeInfoMap] r) => LetClause -> Sem r ()
 scanLetClause = \case
   LetFunDef d -> scanFunctionDef d
   LetMutualBlock m -> scanMutualBlockLet m
 
-scanMutualBlockLet :: (Members '[State CallMap] r) => MutualBlockLet -> Sem r ()
+scanMutualBlockLet :: (Members '[State CallMap, Reader SizeInfoMap] r) => MutualBlockLet -> Sem r ()
 scanMutualBlockLet MutualBlockLet {..} = mapM_ scanFunctionDef _mutualLet
 
 scanTopExpression ::
@@ -192,18 +196,26 @@ scanTopExpression ::
   Expression ->
   Sem r ()
 scanTopExpression =
-  runReader (Nothing @FunctionRef)
-    . runReader emptySizeInfo
+  runReader emptySizeInfoMap
+    . runReader (Nothing @FunctionRef)
     . scanExpression
 
 scanExpression ::
-  (Members '[State CallMap, Reader (Maybe FunctionRef), Reader SizeInfo] r) =>
+  (Members '[State CallMap, Reader (Maybe FunctionRef), Reader SizeInfoMap] r) =>
   Expression ->
   Sem r ()
 scanExpression e =
   viewCall e >>= \case
     Just c -> do
-      whenJustM (ask @(Maybe FunctionRef)) (\caller -> runReader caller (registerCall c))
+      -- Are we recursively calling a function being defined?
+      recCall <- asks (elem (c ^. callRef) . map fst . (^. sizeInfoMap))
+      if
+          | recCall ->
+              runReader (c ^. callRef) (registerCall c)
+          | otherwise ->
+              whenJustM
+                (ask @(Maybe FunctionRef))
+                (\caller -> runReader caller (registerCall c))
       mapM_ (scanExpression . snd) (c ^. callArgs)
     Nothing -> case e of
       ExpressionApplication a -> directExpressions_ scanExpression a
diff --git a/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Data/SizeInfo.hs b/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Data/SizeInfo.hs
index 0bd7bae97e..1a736d56f4 100644
--- a/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Data/SizeInfo.hs
+++ b/src/Juvix/Compiler/Internal/Translation/FromInternal/Analysis/Termination/Data/SizeInfo.hs
@@ -12,6 +12,12 @@ data SizeInfo = SizeInfo
 
 makeLenses ''SizeInfo
 
+newtype SizeInfoMap = SizeInfoMap
+  { _sizeInfoMap :: [(FunctionName, SizeInfo)]
+  }
+
+makeLenses ''SizeInfoMap
+
 emptySizeInfo :: SizeInfo
 emptySizeInfo =
   SizeInfo
@@ -19,6 +25,9 @@ emptySizeInfo =
       _sizeSmaller = mempty
     }
 
+emptySizeInfoMap :: SizeInfoMap
+emptySizeInfoMap = SizeInfoMap []
+
 mkSizeInfo :: [PatternArg] -> SizeInfo
 mkSizeInfo args = SizeInfo {..}
   where
diff --git a/test/Termination/Positive.hs b/test/Termination/Positive.hs
index f1fc4ca5ce..b8194d0055 100644
--- a/test/Termination/Positive.hs
+++ b/test/Termination/Positive.hs
@@ -67,7 +67,15 @@ tests =
     PosTest
       "Ignore instance arguments"
       $(mkRelDir ".")
-      $(mkRelFile "issue2414.juvix")
+      $(mkRelFile "issue2414.juvix"),
+    PosTest
+      "Nested local definitions"
+      $(mkRelDir ".")
+      $(mkRelFile "Nested1.juvix"),
+    PosTest
+      "Named arguments"
+      $(mkRelDir ".")
+      $(mkRelFile "Nested2.juvix")
   ]
 
 testsWithKeyword :: [PosTest]
diff --git a/tests/positive/Termination/Nested1.juvix b/tests/positive/Termination/Nested1.juvix
new file mode 100644
index 0000000000..4c3bab7b18
--- /dev/null
+++ b/tests/positive/Termination/Nested1.juvix
@@ -0,0 +1,11 @@
+module Nested1;
+
+import Stdlib.Data.List open;
+
+go {A B} (f : A -> B) : List A -> List B
+  | nil := nil
+  | (elem :: next) :=
+    let
+      var1 := f elem;
+      var2 := go f next;
+    in var1 :: var2;
diff --git a/tests/positive/Termination/Nested2.juvix b/tests/positive/Termination/Nested2.juvix
new file mode 100644
index 0000000000..bfbe1f3fd8
--- /dev/null
+++ b/tests/positive/Termination/Nested2.juvix
@@ -0,0 +1,16 @@
+module Nested2;
+
+type MyList A :=
+  | myNil
+  | myCons@{
+      elem : A;
+      next : MyList A;
+    };
+
+go {A B} (f : A -> B) : MyList A -> MyList B
+  | myNil := myNil
+  | myCons@{elem; next} :=
+    myCons@{
+      elem := f elem;
+      next := go f next;
+    };