diff --git a/lib/SILGen/SILGenConcurrency.cpp b/lib/SILGen/SILGenConcurrency.cpp
index ca0f92fa3f823..f303895fff701 100644
--- a/lib/SILGen/SILGenConcurrency.cpp
+++ b/lib/SILGen/SILGenConcurrency.cpp
@@ -75,7 +75,7 @@ setExpectedExecutorForParameterIsolation(SILGenFunction &SGF,
   // argument.
   if (actorIsolation.getKind() == ActorIsolation::CallerIsolationInheriting) {
     auto *isolatedArg = SGF.F.maybeGetIsolatedArgument();
-    assert(isolatedArg &&
+    ASSERT(isolatedArg &&
            "Caller Isolation Inheriting without isolated parameter");
     ManagedValue isolatedMV;
     if (isolatedArg->getOwnershipKind() == OwnershipKind::Guaranteed) {
diff --git a/lib/SILGen/SILGenExpr.cpp b/lib/SILGen/SILGenExpr.cpp
index 56c9c2ec0cdee..f33cc526bd2d8 100644
--- a/lib/SILGen/SILGenExpr.cpp
+++ b/lib/SILGen/SILGenExpr.cpp
@@ -7287,19 +7287,34 @@ RValue RValueEmitter::visitMacroExpansionExpr(MacroExpansionExpr *E,
 
 RValue RValueEmitter::visitCurrentContextIsolationExpr(
     CurrentContextIsolationExpr *E, SGFContext C) {
-  // If we are in an actor initializer that is isolated to self, the
-  // current isolation is flow-sensitive; use that instead of the
-  // synthesized expression.
-  if (auto ctor = dyn_cast_or_null<ConstructorDecl>(
-          SGF.F.getDeclRef().getDecl())) {
-    auto isolation = getActorIsolation(ctor);
-    if (ctor->isDesignatedInit() &&
+  auto afd =
+    dyn_cast_or_null<AbstractFunctionDecl>(SGF.F.getDeclRef().getDecl());
+  if (afd) {
+    auto isolation = getActorIsolation(afd);
+    auto ctor = dyn_cast_or_null<ConstructorDecl>(afd);
+    if (ctor && ctor->isDesignatedInit() &&
         isolation == ActorIsolation::ActorInstance &&
         isolation.getActorInstance() == ctor->getImplicitSelfDecl()) {
+      // If we are in an actor initializer that is isolated to self, the
+      // current isolation is flow-sensitive; use that instead of the
+      // synthesized expression.
       auto isolationValue =
         SGF.emitFlowSensitiveSelfIsolation(E, isolation);
       return RValue(SGF, E, isolationValue);
     }
+
+    if (isolation == ActorIsolation::CallerIsolationInheriting) {
+      auto *isolatedArg = SGF.F.maybeGetIsolatedArgument();
+      assert(isolatedArg &&
+             "Caller Isolation Inheriting without isolated parameter");
+      ManagedValue isolatedMV;
+      if (isolatedArg->getOwnershipKind() == OwnershipKind::Guaranteed) {
+        isolatedMV = ManagedValue::forBorrowedRValue(isolatedArg);
+      } else {
+        isolatedMV = ManagedValue::forUnmanagedOwnedValue(isolatedArg);
+      }
+      return RValue(SGF, E, isolatedMV);
+    }
   }
 
   return visit(E->getActor(), C);
diff --git a/lib/Sema/TypeCheckConcurrency.cpp b/lib/Sema/TypeCheckConcurrency.cpp
index 22ec5ab814e78..ef0ca26bbce2a 100644
--- a/lib/Sema/TypeCheckConcurrency.cpp
+++ b/lib/Sema/TypeCheckConcurrency.cpp
@@ -4393,10 +4393,15 @@ namespace {
 
       case ActorIsolation::Unspecified:
       case ActorIsolation::Nonisolated:
-      case ActorIsolation::CallerIsolationInheriting:
       case ActorIsolation::NonisolatedUnsafe:
         actorExpr = new (ctx) NilLiteralExpr(loc, /*implicit=*/false);
         break;
+      case ActorIsolation::CallerIsolationInheriting:
+        // For caller isolation this expression will be replaced in SILGen
+        // because we're adding an implicit isolated parameter that #isolated
+        // must resolve to, but cannot do so during AST expansion quite yet.
+        actorExpr = new (ctx) NilLiteralExpr(loc, /*implicit=*/false);
+        break;
       }
 
 
diff --git a/test/Concurrency/Runtime/isolated_macro_in_nonisolated_nonsending_func.swift b/test/Concurrency/Runtime/isolated_macro_in_nonisolated_nonsending_func.swift
new file mode 100644
index 0000000000000..2e27408655b37
--- /dev/null
+++ b/test/Concurrency/Runtime/isolated_macro_in_nonisolated_nonsending_func.swift
@@ -0,0 +1,72 @@
+// RUN: %target-run-simple-swift( -Xfrontend -disable-availability-checking -parse-as-library) | %FileCheck %s --dump-input=always
+
+// REQUIRES: concurrency
+// REQUIRES: executable_test
+// REQUIRES: concurrency_runtime
+
+// rdar://78109470
+// UNSUPPORTED: back_deployment_runtime
+// UNSUPPORTED: freestanding
+
+import _Concurrency
+import StdlibUnittest
+
+@main struct Main {
+  static func main() async {
+    await explicitIsolatedParam()
+    // CHECK: go - explicitIsolatedParam
+    // CHECK: outerIsolation = #isolation = Optional(Swift.MainActor)
+    // CHECK: Task{} #isolation = nil
+    // CHECK: Task{ [outerIsolation] } outerIsolation = Optional(Swift.MainActor), #iso = Optional(Swift.MainActor)
+    // CHECK: done - explicitIsolatedParam
+
+    print()
+    await nonisolatedNonsending()
+    // CHECK: go - nonisolatedNonsending
+    // CHECK: outerIsolation = #isolation = Optional(Swift.MainActor)
+    // CHECK: Task{} #isolation = nil
+    // CHECK: Task{ [outerIsolation] } outerIsolation = Optional(Swift.MainActor), #iso = nil
+    // CHECK: done - nonisolatedNonsending
+  }
+}
+
+func explicitIsolatedParam(isolation: isolated (any Actor)? = #isolation) async {
+  print("go - \(#function)")
+  MainActor.assertIsolated()
+
+  let outerIsolation = #isolation
+  print("outerIsolation = #isolation = \(String(describing: outerIsolation))")
+
+  await Task {
+    let iso = #isolation
+    print("Task{} #isolation = \(String(describing: iso))")
+  }.value
+
+  await Task {
+    let iso = #isolation
+    print("Task{ [outerIsolation] } outerIsolation = \(String(describing: isolation)), #iso = \(String(describing: iso))")
+  }.value
+
+  print("done - \(#function)")
+}
+
+
+nonisolated(nonsending) func nonisolatedNonsending() async {
+  print("go - \(#function)")
+  MainActor.assertIsolated()
+
+  let outerIsolation = #isolation
+  print("outerIsolation = #isolation = \(String(describing: outerIsolation))")
+
+  await Task {
+    let iso = #isolation
+    print("Task{} #isolation = \(String(describing: iso))")
+  }.value
+
+  await Task {
+    let iso = #isolation
+    print("Task{ [outerIsolation] } outerIsolation = \(String(describing: outerIsolation)), #iso = \(String(describing: iso))")
+  }.value
+
+  print("done - \(#function)")
+}
diff --git a/test/Concurrency/isolated_nonsending_isolation_macro_sil.swift b/test/Concurrency/isolated_nonsending_isolation_macro_sil.swift
new file mode 100644
index 0000000000000..718706d5dc8e1
--- /dev/null
+++ b/test/Concurrency/isolated_nonsending_isolation_macro_sil.swift
@@ -0,0 +1,25 @@
+// RUN: %target-swift-frontend -parse-as-library -emit-sil %s | %FileCheck %s
+
+// REQUIRES: concurrency
+
+nonisolated(nonsending) func nonisolatedNonsending() async {
+  let iso = #isolation
+  take(iso: iso)
+}
+
+func take(iso: (any Actor)?) {}
+
+// CHECK-LABEL: // nonisolatedNonsending()
+// CHECK-NEXT: // Isolation: caller_isolation_inheriting
+// CHECK-NEXT: sil hidden @$s39isolated_nonsending_isolation_macro_sil21nonisolatedNonsendingyyYaF : $@convention(thin) @async (@sil_isolated @sil_implicit_leading_param @guaranteed Optional<any Actor>) -> () {
+// CHECK:      bb0(%0 : $Optional<any Actor>):
+// CHECK-NEXT:   hop_to_executor %0 // id: %1
+// CHECK-NEXT:   retain_value %0 // id: %2
+// CHECK-NEXT:   debug_value %0, let, name "iso" // id: %3
+// CHECK-NEXT:   // function_ref take(iso:)
+// CHECK-NEXT:   %4 = function_ref @$s39isolated_nonsending_isolation_macro_sil4take3isoyScA_pSg_tF : $@convention(thin) (@guaranteed Optional<any Actor>) -> () // user: %5
+// CHECK-NEXT:   %5 = apply %4(%0) : $@convention(thin) (@guaranteed Optional<any Actor>) -> ()
+// CHECK-NEXT:   release_value %0 // id: %6
+// CHECK-NEXT:   %7 = tuple () // user: %8
+// CHECK-NEXT:   return %7 // id: %8
+// CHECK-NEXT: } // end sil function '$s39isolated_nonsending_isolation_macro_sil21nonisolatedNonsendingyyYaF'
\ No newline at end of file