diff --git a/flang/lib/Parser/prescan.h b/flang/lib/Parser/prescan.h
--- a/flang/lib/Parser/prescan.h
+++ b/flang/lib/Parser/prescan.h
@@ -166,6 +166,7 @@
   const char *IsPreprocessorDirectiveLine(const char *) const;
   const char *FixedFormContinuationLine(bool mightNeedSpace);
   const char *FreeFormContinuationLine(bool ampersand);
+  bool IsImplicitContinuation() const;
   bool FixedFormContinuation(bool mightNeedSpace);
   bool FreeFormContinuation();
   bool Continuation(bool mightNeedFixedFormSpace);
diff --git a/flang/lib/Parser/prescan.cpp b/flang/lib/Parser/prescan.cpp
--- a/flang/lib/Parser/prescan.cpp
+++ b/flang/lib/Parser/prescan.cpp
@@ -887,10 +887,8 @@
         return nextLine_ + 6;
       }
     }
-    if (delimiterNesting_ > 0) {
-      if (!IsFixedFormCommentChar(col1)) {
-        return nextLine_;
-      }
+    if (IsImplicitContinuation()) {
+      return nextLine_;
     }
   }
   return nullptr; // not a continuation line
@@ -927,7 +925,7 @@
       return p + 1;
     } else if (*p == '!' || *p == '\n' || *p == '#') {
       return nullptr;
-    } else if (ampersand || delimiterNesting_ > 0) {
+    } else if (ampersand || IsImplicitContinuation()) {
       if (p > nextLine_) {
         --p;
       } else {
@@ -981,6 +979,14 @@
   return false;
 }
 
+// Implicit line continuation allows a preprocessor macro call with
+// arguments to span multiple lines.
+bool Prescanner::IsImplicitContinuation() const {
+  return !inPreprocessorDirective_ && !inCharLiteral_ &&
+      delimiterNesting_ > 0 && nextLine_ < limit_ &&
+      ClassifyLine(nextLine_).kind == LineClassification::Kind::Source;
+}
+
 bool Prescanner::Continuation(bool mightNeedFixedFormSpace) {
   if (*at_ == '\n' || *at_ == '&') {
     if (inFixedForm_) {
diff --git a/flang/test/Parser/continuation-in-if.f b/flang/test/Parser/continuation-in-if.f
new file mode 100644
--- /dev/null
+++ b/flang/test/Parser/continuation-in-if.f
@@ -0,0 +1,9 @@
+! RUN: %f18 -funparse %s 2>&1 | FileCheck %s
+! CHECK: CALL foo("N","N")
+#ifdef transpose
+      call foo('T',
+#else
+      call foo('N',
+#endif
+     $     'N')
+      end