diff --git a/src/compiler.ts b/src/compiler.ts
index 58a02ac35e..31f84f065a 100644
--- a/src/compiler.ts
+++ b/src/compiler.ts
@@ -2825,14 +2825,6 @@ export class Compiler extends DiagnosticEmitter {
 
     var valueExpression = statement.value;
     if (valueExpression) {
-      if (returnType == Type.void) {
-        this.error(
-          DiagnosticCode.Type_0_is_not_assignable_to_type_1,
-          valueExpression.range, this.currentType.toString(), returnType.toString()
-        );
-        this.currentType = Type.void;
-        return module.unreachable();
-      }
       let constraints = Constraints.CONV_IMPLICIT;
       if (flow.actualFunction.is(CommonFlags.MODULE_EXPORT)) constraints |= Constraints.MUST_WRAP;
 
@@ -2857,15 +2849,27 @@ export class Compiler extends DiagnosticEmitter {
 
     // Handle inline return
     if (flow.isInline) {
-      return isLastInBody && expr != 0
-        ? expr
-        : module.br(assert(flow.inlineReturnLabel), 0, expr);
+      return !expr
+        ? isLastInBody
+          ? module.nop()
+          : module.br(assert(flow.inlineReturnLabel))
+        : isLastInBody
+          ? expr
+          : this.currentType == Type.void
+            ? module.block(null, [ expr, module.br(assert(flow.inlineReturnLabel)) ])
+            : module.br(assert(flow.inlineReturnLabel), 0, expr);
     }
 
     // Otherwise emit a normal return
-    return isLastInBody && expr != 0
-      ? expr
-      : module.return(expr);
+    return !expr
+      ? isLastInBody
+        ? module.nop()
+        : module.return()
+      : isLastInBody
+        ? expr
+        : this.currentType == Type.void
+          ? module.block(null, [ expr, module.return() ])
+          : module.return(expr);
   }
 
   private compileSwitchStatement(
diff --git a/tests/compiler/return.json b/tests/compiler/return.json
new file mode 100644
index 0000000000..1bdd02b1be
--- /dev/null
+++ b/tests/compiler/return.json
@@ -0,0 +1,4 @@
+{
+  "asc_flags": [
+  ]
+}
diff --git a/tests/compiler/return.optimized.wat b/tests/compiler/return.optimized.wat
new file mode 100644
index 0000000000..64eb14b70d
--- /dev/null
+++ b/tests/compiler/return.optimized.wat
@@ -0,0 +1,82 @@
+(module
+ (type $none_=>_none (func))
+ (type $i32_=>_none (func (param i32)))
+ (type $i32_i32_i32_i32_=>_none (func (param i32 i32 i32 i32)))
+ (type $i32_i32_=>_none (func (param i32 i32)))
+ (import "env" "abort" (func $~lib/builtins/abort (param i32 i32 i32 i32)))
+ (global $~lib/memory/__stack_pointer (mut i32) (i32.const 17452))
+ (memory $0 1)
+ (data (i32.const 1036) "\1c")
+ (data (i32.const 1048) "\03\00\00\00\08\00\00\00\01")
+ (table $0 2 funcref)
+ (elem $0 (i32.const 1) $start:return~anonymous|0)
+ (export "testVoidReturn" (func $return/testVoidReturn))
+ (export "memory" (memory $0))
+ (export "testVoidReturnFunction" (func $export:return/testVoidReturnFunction))
+ (start $~start)
+ (func $start:return~anonymous|0
+  nop
+ )
+ (func $return/testVoidReturn (param $0 i32)
+  nop
+ )
+ (func $~start
+  (local $0 i32)
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.sub
+  global.set $~lib/memory/__stack_pointer
+  global.get $~lib/memory/__stack_pointer
+  i32.const 1068
+  i32.lt_s
+  if
+   i32.const 17472
+   i32.const 17520
+   i32.const 1
+   i32.const 1
+   call $~lib/builtins/abort
+   unreachable
+  end
+  global.get $~lib/memory/__stack_pointer
+  local.tee $0
+  i32.const 0
+  i32.store
+  local.get $0
+  i32.const 1056
+  i32.store
+  i32.const 1056
+  i32.load
+  call_indirect $0 (type $none_=>_none)
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.add
+  global.set $~lib/memory/__stack_pointer
+ )
+ (func $export:return/testVoidReturnFunction (param $0 i32) (param $1 i32)
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.sub
+  global.set $~lib/memory/__stack_pointer
+  global.get $~lib/memory/__stack_pointer
+  i32.const 1068
+  i32.lt_s
+  if
+   i32.const 17472
+   i32.const 17520
+   i32.const 1
+   i32.const 1
+   call $~lib/builtins/abort
+   unreachable
+  end
+  global.get $~lib/memory/__stack_pointer
+  local.get $1
+  i32.store
+  local.get $1
+  i32.load
+  call_indirect $0 (type $none_=>_none)
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.add
+  global.set $~lib/memory/__stack_pointer
+ )
+)
diff --git a/tests/compiler/return.ts b/tests/compiler/return.ts
new file mode 100644
index 0000000000..3d1818e903
--- /dev/null
+++ b/tests/compiler/return.ts
@@ -0,0 +1,16 @@
+function nop(): void {}
+
+export function testVoidReturn(cond: bool): void {
+  if (cond) {
+    return nop();
+  }
+  return nop();
+}
+
+export function testVoidReturnFunction(cond: bool, fn: () => void): void {
+  if (cond) {
+    return fn();
+  }
+  return fn();
+}
+testVoidReturnFunction(true, () => nop());
diff --git a/tests/compiler/return.untouched.wat b/tests/compiler/return.untouched.wat
new file mode 100644
index 0000000000..74d0fb1a0b
--- /dev/null
+++ b/tests/compiler/return.untouched.wat
@@ -0,0 +1,105 @@
+(module
+ (type $none_=>_none (func))
+ (type $i32_i32_=>_none (func (param i32 i32)))
+ (type $i32_=>_none (func (param i32)))
+ (type $i32_i32_i32_i32_=>_none (func (param i32 i32 i32 i32)))
+ (import "env" "abort" (func $~lib/builtins/abort (param i32 i32 i32 i32)))
+ (global $~argumentsLength (mut i32) (i32.const 0))
+ (global $~lib/memory/__data_end i32 (i32.const 44))
+ (global $~lib/memory/__stack_pointer (mut i32) (i32.const 16428))
+ (global $~lib/memory/__heap_base i32 (i32.const 16428))
+ (memory $0 1)
+ (data (i32.const 12) "\1c\00\00\00\00\00\00\00\00\00\00\00\03\00\00\00\08\00\00\00\01\00\00\00\00\00\00\00\00\00\00\00")
+ (table $0 2 funcref)
+ (elem $0 (i32.const 1) $start:return~anonymous|0)
+ (export "testVoidReturn" (func $return/testVoidReturn))
+ (export "memory" (memory $0))
+ (export "testVoidReturnFunction" (func $export:return/testVoidReturnFunction))
+ (start $~start)
+ (func $return/nop
+  nop
+ )
+ (func $start:return~anonymous|0
+  call $return/nop
+ )
+ (func $return/testVoidReturnFunction (param $0 i32) (param $1 i32)
+  local.get $0
+  if
+   i32.const 0
+   global.set $~argumentsLength
+   local.get $1
+   i32.load
+   call_indirect $0 (type $none_=>_none)
+   return
+  end
+  i32.const 0
+  global.set $~argumentsLength
+  local.get $1
+  i32.load
+  call_indirect $0 (type $none_=>_none)
+ )
+ (func $return/testVoidReturn (param $0 i32)
+  local.get $0
+  if
+   call $return/nop
+   return
+  end
+  call $return/nop
+ )
+ (func $~start
+  call $start:return
+ )
+ (func $~stack_check
+  global.get $~lib/memory/__stack_pointer
+  global.get $~lib/memory/__data_end
+  i32.lt_s
+  if
+   i32.const 16448
+   i32.const 16496
+   i32.const 1
+   i32.const 1
+   call $~lib/builtins/abort
+   unreachable
+  end
+ )
+ (func $start:return
+  (local $0 i32)
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.sub
+  global.set $~lib/memory/__stack_pointer
+  call $~stack_check
+  global.get $~lib/memory/__stack_pointer
+  i32.const 0
+  i32.store
+  i32.const 1
+  i32.const 32
+  local.set $0
+  global.get $~lib/memory/__stack_pointer
+  local.get $0
+  i32.store
+  local.get $0
+  call $return/testVoidReturnFunction
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.add
+  global.set $~lib/memory/__stack_pointer
+ )
+ (func $export:return/testVoidReturnFunction (param $0 i32) (param $1 i32)
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.sub
+  global.set $~lib/memory/__stack_pointer
+  call $~stack_check
+  global.get $~lib/memory/__stack_pointer
+  local.get $1
+  i32.store
+  local.get $0
+  local.get $1
+  call $return/testVoidReturnFunction
+  global.get $~lib/memory/__stack_pointer
+  i32.const 4
+  i32.add
+  global.set $~lib/memory/__stack_pointer
+ )
+)