diff --git a/lib/scope.js b/lib/scope.js
index 20d9d730..ace25894 100644
--- a/lib/scope.js
+++ b/lib/scope.js
@@ -194,6 +194,11 @@ AST_Toplevel.DEFMETHOD("figure_out_scope", function(options){
         }
         if (node instanceof AST_SymbolRef) {
             var name = node.name;
+            if (name == "eval" && tw.parent() instanceof AST_Call) {
+                for (var s = node.scope; s && !s.uses_eval; s = s.parent_scope) {
+                    s.uses_eval = true;
+                }
+            }
             var sym = node.scope.find_variable(name);
             if (!sym) {
                 var g;
@@ -206,10 +211,6 @@ AST_Toplevel.DEFMETHOD("figure_out_scope", function(options){
                     globals.set(name, g);
                 }
                 node.thedef = g;
-                if (name == "eval" && tw.parent() instanceof AST_Call) {
-                    for (var s = node.scope; s && !s.uses_eval; s = s.parent_scope)
-                        s.uses_eval = true;
-                }
                 if (func && name == "arguments") {
                     func.uses_arguments = true;
                 }
diff --git a/test/compress/issue-976.js b/test/compress/issue-976.js
new file mode 100644
index 00000000..dea30705
--- /dev/null
+++ b/test/compress/issue-976.js
@@ -0,0 +1,88 @@
+eval_collapse_vars: {
+    options = {
+        collapse_vars:true, sequences:false, properties:true, dead_code:true, conditionals:true,
+        comparisons:true, evaluate:true, booleans:true, loops:true, unused:true, hoist_funs:true,
+        keep_fargs:true, if_return:true, join_vars:true, cascade:true, side_effects:true
+    };
+    input: {
+        function f1() {
+            var e = 7;
+            var s = "abcdef";
+            var i = 2;
+            var eval = console.log.bind(console);
+            var x = s.charAt(i++);
+            var y = s.charAt(i++);
+            var z = s.charAt(i++);
+            eval(x, y, z, e);
+        }
+        function p1() { var a = foo(), b = bar(), eval = baz(); return a + b + eval; }
+        function p2() { var a = foo(), b = bar(), eval = baz; return a + b + eval(); }
+        (function f2(eval) {
+            var a = 2;
+            console.log(a - 5);
+            eval("console.log(a);");
+        })(eval);
+    }
+    expect: {
+        function f1() {
+            var e = 7,
+                s = "abcdef",
+                i = 2,
+                eval = console.log.bind(console),
+                x = s.charAt(i++),
+                y = s.charAt(i++),
+                z = s.charAt(i++);
+            eval(x, y, z, e);
+        }
+        function p1() { return foo() + bar() + baz(); }
+        function p2() { var a = foo(), b = bar(), eval = baz; return a + b + eval(); }
+        (function f2(eval) {
+            var a = 2;
+            console.log(a - 5);
+            eval("console.log(a);");
+        })(eval);
+    }
+}
+
+eval_unused: {
+    options = { unused: true, keep_fargs: false };
+    input: {
+        function f1(a, eval, c, d, e) {
+            return a('c') + eval;
+        }
+        function f2(a, b, c, d, e) {
+            return a + eval('c');
+        }
+        function f3(a, eval, c, d, e) {
+            return a + eval('c');
+        }
+    }
+    expect: {
+        function f1(a, eval) {
+            return a('c') + eval;
+        }
+        function f2(a, b, c, d, e) {
+            return a + eval('c');
+        }
+        function f3(a, eval, c, d, e) {
+            return a + eval('c');
+        }
+    }
+}
+
+eval_mangle: {
+    mangle = {
+    };
+    input: {
+        function f1(a, eval, c, d, e) {
+            return a('c') + eval;
+        }
+        function f2(a, b, c, d, e) {
+            return a + eval('c');
+        }
+        function f3(a, eval, c, d, e) {
+            return a + eval('c');
+        }
+    }
+    expect_exact: 'function f1(n,c,e,a,o){return n("c")+c}function f2(a,b,c,d,e){return a+eval("c")}function f3(a,eval,c,d,e){return a+eval("c")}'
+}