diff --git a/clang-tools-extra/clangd/SemanticHighlighting.cpp b/clang-tools-extra/clangd/SemanticHighlighting.cpp
--- a/clang-tools-extra/clangd/SemanticHighlighting.cpp
+++ b/clang-tools-extra/clangd/SemanticHighlighting.cpp
@@ -160,9 +160,15 @@
   }
 
   void addToken(SourceLocation Loc, HighlightingKind Kind) {
-    if (Loc.isMacroID())
-      // FIXME: skip tokens inside macros for now.
-      return;
+    if(Loc.isMacroID()) {
+      // If the location is not an argument it might be from a macro of the form
+      // "#define VAR var". In that case this would highlight "var" in the macro
+      // definition and if VAR is used for functions and variables there would
+      // be conflicts and duplicates. So skip those for now.
+      if (!SM.isMacroArgExpansion(Loc))
+        return;
+      Loc = SM.getSpellingLoc(Loc);
+    }
 
     auto R = getTokenRange(SM, Ctx.getLangOpts(), Loc);
     if (!R) {
diff --git a/clang-tools-extra/clangd/unittests/SemanticHighlightingTests.cpp b/clang-tools-extra/clangd/unittests/SemanticHighlightingTests.cpp
--- a/clang-tools-extra/clangd/unittests/SemanticHighlightingTests.cpp
+++ b/clang-tools-extra/clangd/unittests/SemanticHighlightingTests.cpp
@@ -166,6 +166,42 @@
         $Variable[[AA]].$Field[[E]].$Field[[C]];
         $Class[[A]]::$Variable[[S]] = 90;
       }
+    )cpp",
+    R"cpp(
+      #define DEF_CLASS(T) class T {};
+      DEF_CLASS($Class[[A]])
+
+      #define MACRO_CONCAT(X, V, T) T foo##X = V
+      #define DEF_VAR(X, V) int X = V
+      #define DEF_VAR_T(T, X, V) T X = V
+      #define DEF_VAR_REV(V, X) DEF_VAR(X, V)
+      #define CPY(X) X
+      #define DEF_VAR_TYPE(X, Y) X Y
+      #define SOME_NAME variable
+      #define SOME_NAME_SET variable2 = 123
+      #define INC_VAR(X) X += 2
+      void $Function[[foo]]() {
+        DEF_VAR($Variable[[X]],  123);
+        DEF_VAR_REV(908, $Variable[[XY]]);
+        int CPY( $Variable[[XX]] );
+        DEF_VAR_TYPE($Class[[A]], $Variable[[AA]]);
+        double SOME_NAME;
+        int SOME_NAME_SET;
+        $Variable[[variable]] = 20.1;
+        MACRO_CONCAT(var, 2, float);
+        DEF_VAR_T($Class[[A]], CPY(CPY($Variable[[Nested]])),
+              CPY($Class[[A]]()));
+        INC_VAR($Variable[[variable]]);
+      }
+      void SOME_NAME();
+      DEF_VAR($Variable[[XYZ]], 567);
+      DEF_VAR_REV(756, $Variable[[AB]]);
+
+      #define CALL_FN(F) F();
+      #define DEF_FN(F) void F ()
+      DEF_FN($Function[[g]]) {
+        CALL_FN($Function[[foo]]);
+      }
     )cpp"};
   for (const auto &TestCase : TestCases) {
     checkHighlightings(TestCase);