diff --git a/presets/c64/image-c64.multi.lz4 b/presets/c64/image-c64.multi.lz4
new file mode 100644
index 00000000..309957c0
Binary files /dev/null and b/presets/c64/image-c64.multi.lz4 differ
diff --git a/presets/c64/testlz4.c b/presets/c64/testlz4.c
new file mode 100644
index 00000000..50a0e704
--- /dev/null
+++ b/presets/c64/testlz4.c
@@ -0,0 +1,49 @@
+
+// sid config so we don't use stack above $8000
+
+//#resource "c64-sid.cfg"
+#define CFGFILE c64-sid.cfg
+
+#include "common.h"
+//#link "common.c"
+
+#include "mcbitmap.h"
+//#link "mcbitmap.c"
+
+#include <lz4.h>
+
+// include the LZ4 binary data -> image_c64_multi_lz4[]
+
+//#incbin "image-c64.multi.lz4"
+
+/*
+CharData equ .
+ScreenData equ CharData+8000
+ColorData equ ScreenData+1000
+XtraData equ ColorData+1000
+*/
+
+void main() {
+  char* const uncomp = (char*)0xb000;
+  char bgcolor;
+  
+  // setup VIC for multicolor bitmap
+  // colormap = $c000-$c7ff
+  // bitmap = $e000-$ffff
+  setup_bitmap_multi();
+  // enable HIMEM so we can write to $c000-$ffff
+  ENABLE_HIMEM();
+  // decompress into $8000-$a711
+  decompress_lz4(image_c64_multi_lz4+11, uncomp, 10002);
+  // read background color
+  bgcolor = uncomp[10000];
+  // copy data to destination areas
+  memcpy((void*)MCB_BITMAP, uncomp, 8000);
+  memcpy(COLOR_RAM, uncomp+9000, 1000);
+  memcpy((void*)MCB_COLORS, uncomp+8000, 1000);
+  DISABLE_HIMEM();
+  // set background color
+  VIC.bgcolor0 = bgcolor;
+  // wait for key
+  cgetc();
+}
diff --git a/src/common/util.ts b/src/common/util.ts
index d2687958..db372cf6 100644
--- a/src/common/util.ts
+++ b/src/common/util.ts
@@ -424,6 +424,9 @@ export function clamp(minv:number, maxv:number, v:number) {
 }
 
 export function safeident(s : string) : string {
+  // if starts with non-alpha character, prefix with '_'
+  if (s.length == 0) return '';
+  if (!s.match(/^[a-zA-Z_]/)) s = '_' + s;
   return s.replace(/\W+/g, "_");
 }
 
diff --git a/src/ide/project.ts b/src/ide/project.ts
index 83b42ab0..c9451257 100644
--- a/src/ide/project.ts
+++ b/src/ide/project.ts
@@ -200,9 +200,9 @@ export class CodeProject {
         this.pushAllFiles(files, m[2]);
       }
       // for .c -- //#resource "file" (or ;resource or #resource)
-      let re3 = /^\s*([;']|[/][/])#resource\s+"(.+?)"/gm;
+      let re3 = /^\s*([;']|[/][/])#(resource|incbin)\s+"(.+?)"/gm;
       while (m = re3.exec(text)) {
-        this.pushAllFiles(files, m[2]);
+        this.pushAllFiles(files, m[3]);
       }
       // for XASM only (USE include.ext)
       // for merlin32 (ASM include.ext)
diff --git a/src/platform/c64.ts b/src/platform/c64.ts
index 0c4e5505..65847938 100644
--- a/src/platform/c64.ts
+++ b/src/platform/c64.ts
@@ -23,6 +23,7 @@ const C64_PRESETS = [
   {id:'test_multispritelib.c', name:'Sprite Multiplexing Library'},
   {id:'scrolling_text.c', name:'Big Scrolling Text'},
   {id:'mcbitmap.c', name:'Multicolor Bitmap Mode'},
+  {id:'testlz4.c', name:'LZ4 Bitmap Compression'},
   //{id:'mandel.c', name:'Mandelbrot Fractal'},
   {id:'musicplayer.c', name:'Music Player'},
   //{id:'sidtune.dasm', name:'Tiny SID Tune (ASM)'},
diff --git a/src/worker/tools/cc65.ts b/src/worker/tools/cc65.ts
index 460aa5fd..383225ae 100644
--- a/src/worker/tools/cc65.ts
+++ b/src/worker/tools/cc65.ts
@@ -1,5 +1,5 @@
 
-import { getFilenamePrefix, getRootBasePlatform } from "../../common/util";
+import { convertDataToUint8Array, getFilenamePrefix, getRootBasePlatform, safeident } from "../../common/util";
 import { CodeListingMap, WorkerError } from "../../common/workertypes";
 import { re_crlf, BuildStepResult, anyTargetChanged, execMain, gatherFiles, msvcErrorMatcher, populateEntry, populateExtraFiles, populateFiles, print_fn, putWorkFile, setupFS, staleFiles, BuildStep, emglobal, loadNative, moduleInstFn, fixParamsWithDefines, store, makeErrorMatcher, getWorkFileAsString } from "../workermain";
 import { EmscriptenModule } from "../workermain"
@@ -272,6 +272,27 @@ export function linkLD65(step: BuildStep): BuildStepResult {
     }
 }
 
+function processIncbin(code: string) {
+    let re3 = /^\s*([;']|[/][/])#incbin\s+"(.+?)"/gm;
+    // find #incbin "filename.bin" and replace with C array declaration
+    return code.replace(re3, (m, m1, m2) => {
+        let filename = m2;
+        let filedata = store.getFileData(filename);
+        let bytes = convertDataToUint8Array(filedata);
+        if (!bytes) throw new Error('#incbin: file not found: "' + filename + '"');
+        let out = '';
+        let ident = safeident(filename);
+        console.log('#incbin', filename, ident, bytes.length);
+        out += 'const unsigned char ' + ident + '[' + bytes.length + '] = {';
+        for (let i = 0; i < bytes.length; i++) {
+            out += bytes[i].toString() + ',';
+        }
+        out += '};';
+        console.log('incbin', out);
+        return out;
+    });
+}
+
 export function compileCC65(step: BuildStep): BuildStepResult {
     loadNative("cc65");
     var params = step.params;
@@ -303,7 +324,15 @@ export function compileCC65(step: BuildStep): BuildStepResult {
         });
         var FS = CC65.FS;
         setupFS(FS, '65-' + getRootBasePlatform(step.platform));
-        populateFiles(step, FS);
+        populateFiles(step, FS, {
+            mainFilePath: step.path,
+            processFn: (path, code) => {
+                if (typeof code === 'string') {
+                    code = processIncbin(code);
+                }
+                return code;
+            }
+        });
         fixParamsWithDefines(step.path, params);
         var args = [
             '-I', '/share/include',