diff --git a/test/val/bug263.c b/test/val/bug263.c
new file mode 100644
index 000000000..6f3f8f57e
--- /dev/null
+++ b/test/val/bug263.c
@@ -0,0 +1,49 @@
+
+/* issue #263 - cc65 miscompiles w/ a static variable and -O */
+
+#include <stdint.h>
+#include <stdio.h>
+
+int failures = 0;
+
+void __fastcall__ set_vram_update(unsigned char *ptr)
+{
+    printf("set_vram_update: %04x\n", ptr);
+    if (ptr != NULL) {
+        failures++;
+    }
+}
+
+unsigned char __fastcall__ ppu_wait_nmi(void)
+{
+    // we need to make sure somehow the akku is not zero before the break
+    return 0x1234;
+}
+
+unsigned char ctrl, ret, i;
+
+unsigned char gameloop (void)
+{
+    ctrl = 0;
+    ret = 0;
+    while(1) {
+        if (ctrl & 1) {
+            while (--i) {
+                ppu_wait_nmi();
+            }
+            break;
+        }
+        ctrl = 1;
+    }
+    // This will pass garbage, not NULL.
+    set_vram_update(NULL);
+    return ret;
+}
+
+int main(void)
+{
+    gameloop();
+    printf("failures: %d\n", failures);
+    return failures;
+}
+