diff --git a/lib/compile/index.js b/lib/compile/index.js
index 37952dc..d097ed9 100644
--- a/lib/compile/index.js
+++ b/lib/compile/index.js
@@ -149,27 +149,32 @@ function compile(schema, root, localRefs, baseId) {
     return 'pattern' + index;
   }
 
-  function useCustomRule(rule, schema, parentSchema) {
-    var compile = rule.definition.compile;
+  function useCustomRule(rule, schema, parentSchema, it) {
+    var compile = rule.definition.compile
+      , inline = rule.definition.inline;
 
     var key = rule.keyword;
-    if (compile) {
+    if (compile || inline) {
       key += '::' + stableStringify(schema);
-      if (compile.length > 1) key += '::' + stableStringify(parentSchema);
+      var usesParentSchema = (compile && compile.length > 1)
+                          || (inline && inline.length > 2)
+                          || rule.definition.parentSchema;
+      if (usesParentSchema) key += '::' + stableStringify(parentSchema);
     }
 
     var index = customRulesHash[key];
     if (index === undefined) {
       var validate = compile
                       ? compile.call(self, schema, parentSchema)
-                      : rule.definition.validate;
+                      : inline
+                        ? inline.call(self, it, schema, parentSchema)
+                        : rule.definition.validate;
       index = customRulesHash[key] = customRules.length;
       customRules[index] = validate;
     }
 
     return {
       code: 'customRule' + index,
-      compiled: !!compile,
       validate: customRules[index]
     };
   }
diff --git a/lib/compile/macro.js b/lib/compile/macro.js
index 100eebb..d94abe9 100644
--- a/lib/compile/macro.js
+++ b/lib/compile/macro.js
@@ -34,7 +34,7 @@ function expandMacros() {
       schemaCopy = util.copy(schema);
 
     var success = true;
-    out: // try to merge schemas
+    out: // try to merge schemas without merging keywords
     for (i=0; i<expSchemas.length; i++) {
       var sch = expSchemas[i];
       for (key in sch) {
diff --git a/lib/dot/custom.def b/lib/dot/custom.def
index 1d0060f..c6cd52e 100644
--- a/lib/dot/custom.def
+++ b/lib/dot/custom.def
@@ -1,37 +1,66 @@
 {{
   var $schema = it.schema[$rule.keyword]
-    , $ruleValidate = it.useCustomRule($rule, $schema, it.schema)
+    , $ruleValidate = it.useCustomRule($rule, $schema, it.schema, it)
     , $ruleErrs = $ruleValidate.code + '.errors'
     , $schemaPath = it.schemaPath + '.' + $rule.keyword;
 }}
-{{=$ruleErrs}} = null;
+
+{{? !$rule.definition.inline }}
+  {{=$ruleErrs}} = null;
+{{?}}
 
 {{## def.callRuleValidate:
-  {{ var argsLen; }}
-  {{=$ruleValidate.code}}.call(self
-    {{? !$ruleValidate.compiled }}
-      , validate.schema{{=$schemaPath}}
-      , {{=$data}}
-      {{? $ruleValidate.validate.length > 2 }}
-        , validate.schema{{=it.schemaPath}}
-      {{?}}
+  {{? $rule.definition.inline }}
+    {{? $rule.definition.statements }}
+      valid{{=it.lvl}}
     {{??}}
-      , {{=$data}}
+      ({{= $ruleValidate.validate }})
     {{?}}
-  )
+  {{??}}
+    {{=$ruleValidate.code}}.call(self
+      {{? $rule.definition.compile }}
+        , {{=$data}}
+      {{??}}
+        , validate.schema{{=$schemaPath}}
+        , {{=$data}}
+        {{? $ruleValidate.validate.length > 2 }}
+          , validate.schema{{=it.schemaPath}}
+        {{?}}
+      {{?}}
+    )
+  {{?}}
 #}}
 
-  if (!{{# def.callRuleValidate }}) {
+{{## def.extendErrors:
+  {{ var $i = 'i' + $lvl; }}
+  for (var {{=$i}}=0; {{=$i}}<{{=$ruleErrs}}.length; {{=$i}}++) {
+    {{ var $ruleErr = 'ruleErr' + $lvl; }}
+    var {{=$ruleErr}} = {{=$ruleErrs}}[{{=$i}}];
+    {{=$ruleErr}}.dataPath = (dataPath || '') + {{= it.errorPath }};
+    {{? it.opts.verbose || it.opts.i18n }}
+      {{=$ruleErr}}.schema = validate.schema{{=$schemaPath}};
+    {{?}}
+    {{? it.opts.verbose }}
+      {{=$ruleErr}}.data = {{=$data}};
+    {{?}}
+  }
+#}}
+
+{{? $rule.definition.inline && $rule.definition.statements }}
+  {{= $ruleValidate.validate }}
+{{?}}
+
+if (!{{# def.callRuleValidate }}) {
+  {{? $rule.definition.inline }}
+    {{# def.error:'custom' }}
+  {{??}}
     if (Array.isArray({{=$ruleErrs}})) {
+      {{# def.extendErrors }}
       if (vErrors === null) vErrors = {{=$ruleErrs}};
       else vErrors.concat({{=$ruleErrs}});
       errors = vErrors.length;
     } else {
       {{# def.error:'custom' }}
     }
-{{? $breakOnError }}
-    return false;
-  } else {
-{{??}}
-  }
-{{?}}
+  {{?}}
+} {{? $breakOnError }} else { {{?}}
diff --git a/spec/custom.spec.js b/spec/custom.spec.js
index dfbfe0e..30b3906 100644
--- a/spec/custom.spec.js
+++ b/spec/custom.spec.js
@@ -2,7 +2,8 @@
 
 var getAjvInstances = require('./ajv_instances')
   , should = require('chai').should()
-  , equal = require('../lib/compile/equal');
+  , equal = require('../lib/compile/equal')
+  , doT = require('dot');
 
 
 describe('Custom keywords', function () {
@@ -18,6 +19,7 @@ describe('Custom keywords', function () {
     ajv = instances[0];
   });
 
+
   describe('custom rules', function() {
     var compileCount = 0;
 
@@ -152,6 +154,7 @@ describe('Custom keywords', function () {
     }
   });
 
+
   describe('macro rules', function() {
     it('should add and validate rule with "macro" keyword', function() {
       testAddEvenKeyword({ macro: macroEven });
@@ -427,6 +430,19 @@ describe('Custom keywords', function () {
       });
     });
 
+    it('should throw exception is macro expansion is an invalid schema', function() {
+      ajv.addKeyword('invalid', { macro: macroInvalid });
+      var schema = { "invalid": true };
+
+      should.throw(function() {
+        var validate = ajv.compile(schema);
+      });
+
+      function macroInvalid(schema) {
+        return { "type": "invalid" };
+      }
+    });
+
     function macroEven(schema) {
       if (schema === true) return { "multipleOf": 2 };
       if (schema === false) return { "not": { "multipleOf": 2 } };
@@ -450,6 +466,52 @@ describe('Custom keywords', function () {
     }
   });
 
+
+  describe('inline rules', function() {
+    it('should add and validate rule with "inline" code keyword', function() {
+      testAddEvenKeyword({ type: 'number', inline: inlineEven });
+    });
+
+    it('should pass parent schema to "inline" keyword', function() {
+      testRangeKeyword({ type: 'number', inline: inlineRange, statements: true });
+    });
+
+    it('should define "inline" keyword as template', function() {
+      var inlineRangeTemplate = doT.compile("\
+{{ \
+  var $data = 'data' + (it.dataLevel || '') \
+    , $min = it.schema.range[0] \
+    , $max = it.schema.range[1] \
+    , $gt = it.schema.exclusiveRange ? '>' : '>=' \
+    , $lt = it.schema.exclusiveRange ? '<' : '<='; \
+}} \
+var valid{{=it.lvl}} = {{=$data}} {{=$gt}} {{=$min}} && {{=$data}} {{=$lt}} {{=$max}}; \
+");
+
+      testRangeKeyword({
+        type: 'number',
+        inline: inlineRangeTemplate,
+        parentSchema: true,
+        statements: true
+      });
+    });
+
+    function inlineEven(it, schema) {
+      var op = schema ? '===' : '!==';
+      return 'data' + (it.dataLevel || '') + ' % 2 ' + op + ' 0';
+    }
+
+    function inlineRange(it, schema, parentSchema) {
+      var min = schema[0]
+        , max = schema[1]
+        , data = 'data' + (it.dataLevel || '')
+        , gt = parentSchema.exclusiveRange ? ' > ' : ' >= '
+        , lt = parentSchema.exclusiveRange ? ' < ' : ' <= ';
+      return 'var valid' + it.lvl + ' = ' + data + gt + min + ' && ' + data + lt + max + ';';
+    }
+  });
+
+
   function testAddEvenKeyword(definition) {
     instances.forEach(function (ajv) {
       ajv.addKeyword('even', definition);
@@ -518,6 +580,7 @@ describe('Custom keywords', function () {
     validate.errors .should.have.length(numErrors || 1);
   }
 
+
   describe('addKeyword method', function() {
     var TEST_TYPES = [ undefined, 'number', 'string', 'boolean', ['number', 'string']];