diff --git a/lib/6to5/transformation/modules/system.js b/lib/6to5/transformation/modules/system.js
index e0bd3ef35f..9d14b5cfcc 100644
--- a/lib/6to5/transformation/modules/system.js
+++ b/lib/6to5/transformation/modules/system.js
@@ -15,8 +15,13 @@ function SystemFormatter(file) {
 
 util.inherits(SystemFormatter, AMDFormatter);
 
-SystemFormatter.prototype._exportsWildcard = function (objectIdentifier) {
-  var leftIdentifier = t.identifier("i");
+SystemFormatter.prototype._addImportSource = function (node, exportNode) {
+  node._importSource = exportNode.source && exportNode.source.value;
+  return node;
+};
+
+SystemFormatter.prototype._exportsWildcard = function (objectIdentifier, node) {
+  var leftIdentifier = this.file.generateUidIdentifier("key");
   var valIdentifier  = t.memberExpression(objectIdentifier, leftIdentifier, true);
 
   var left = t.variableDeclaration("var", [
@@ -29,11 +34,12 @@ SystemFormatter.prototype._exportsWildcard = function (objectIdentifier) {
     this.buildExportCall(leftIdentifier, valIdentifier)
   ]);
 
-  return t.forInStatement(left, right, block);
+  return this._addImportSource(t.forInStatement(left, right, block), node);
 };
 
-SystemFormatter.prototype._exportsAssign = function (id, init) {
-  return this.buildExportCall(t.literal(id.name), init, true);
+SystemFormatter.prototype._exportsAssign = function (id, init, node) {
+  var call = this.buildExportCall(t.literal(id.name), init, true);
+  return this._addImportSource(call, node);
 };
 
 SystemFormatter.prototype.remapExportAssignment = function (node) {
@@ -49,28 +55,53 @@ SystemFormatter.prototype.buildExportCall = function (id, init, isStatement) {
   }
 };
 
-SystemFormatter.prototype.buildRunnerSetters = function () {
-  return t.arrayExpression(_.map(this.ids, function (uid) {
-    var moduleIdentifier = t.identifier("m");
+SystemFormatter.prototype.importSpecifier = function (specifier, node, nodes) {
+  AMDFormatter.prototype.importSpecifier.apply(this, arguments);
+  this._addImportSource(_.last(nodes), node);
+};
 
-    return t.functionExpression(null, [moduleIdentifier], t.blockStatement([
-      t.assignmentExpression("=", uid, moduleIdentifier)
-    ]));
+SystemFormatter.prototype.buildRunnerSetters = function (block, hoistDeclarators) {
+  return t.arrayExpression(_.map(this.ids, function (uid, source) {
+    var nodes = [];
+
+    traverse(block, {
+      enter: function (node) {
+        if (node._importSource === source) {
+          if (t.isVariableDeclaration(node)) {
+            _.each(node.declarations, function (declar) {
+              hoistDeclarators.push(t.variableDeclarator(declar.id));
+              nodes.push(t.expressionStatement(
+                t.assignmentExpression("=", declar.id, declar.init)
+              ));
+            });
+          } else {
+            nodes.push(node);
+          }
+
+          this.remove();
+        }
+      }
+    });
+
+    return t.functionExpression(null, [uid], t.blockStatement(nodes));
   }));
 };
 
 SystemFormatter.prototype.transform = function (ast) {
   var program = ast.program;
 
+  var hoistDeclarators = [];
   var moduleName = this.getModuleName();
   var moduleNameLiteral = t.literal(moduleName);
 
+  var block = t.blockStatement(program.body);
+
   var runner = util.template("system", {
     MODULE_NAME: moduleNameLiteral,
     MODULE_DEPENDENCIES: t.arrayExpression(this.buildDependencyLiterals()),
     EXPORT_IDENTIFIER: this.exportIdentifier,
-    SETTERS: this.buildRunnerSetters(),
-    EXECUTE: t.functionExpression(null, [], t.blockStatement(program.body))
+    SETTERS: this.buildRunnerSetters(block, hoistDeclarators),
+    EXECUTE: t.functionExpression(null, [], block)
   }, true);
 
   var handlerBody = runner.expression.arguments[2].body.body;
@@ -78,8 +109,55 @@ SystemFormatter.prototype.transform = function (ast) {
 
   var returnStatement = handlerBody.pop();
 
+  // hoist up all variable declarations
+  traverse(block, {
+    enter: function (node, parent, scope) {
+      if (t.isFunction(node)) {
+        // nothing inside is accessible
+        return this.stop();
+      }
+
+      if (t.isVariableDeclaration(node)) {
+        if (node.kind !== "var" && !t.isProgram(parent)) { // let, const
+          // can't be accessed
+          return;
+        }
+
+        var nodes = [];
+
+        _.each(node.declarations, function (declar) {
+          hoistDeclarators.push(t.variableDeclarator(declar.id));
+          if (declar.init) {
+            // no initializer so we can just hoist it as-is
+            var assign = t.expressionStatement(t.assignmentExpression("=", declar.id, declar.init));
+            nodes.push(assign);
+          }
+        });
+
+        // for (var i in test)
+        // for (var i = 0;;)
+        if (t.isFor(parent)) {
+          if (parent.left === node) {
+            return node.declarations[0].id;
+          }
+
+          if (parent.init === node) {
+            return t.toSequenceExpression(nodes, scope);
+          }
+        }
+
+        return nodes;
+      }
+    }
+  });
+  if (hoistDeclarators.length) {
+    var hoistDeclar = t.variableDeclaration("var", hoistDeclarators);
+    hoistDeclar._blockHoist = true;
+    handlerBody.unshift(hoistDeclar);
+  }
+
   // hoist up function declarations for circular references
-  traverse(program, {
+  traverse(block, {
     enter: function (node) {
       if (t.isFunction(node)) this.stop();
 
@@ -90,12 +168,6 @@ SystemFormatter.prototype.transform = function (ast) {
     }
   });
 
-  if (!_.isEmpty(this.ids)) {
-    handlerBody.push(t.variableDeclaration("var", _.map(this.ids, function (uid) {
-      return t.variableDeclarator(uid);
-    })));
-  }
-
   handlerBody.push(returnStatement);
 
   program.body = [runner];
diff --git a/test/fixtures/transformation/es6-modules-system/exports-default/expected.js b/test/fixtures/transformation/es6-modules-system/exports-default/expected.js
index 6c2b8c396e..f35e77ee06 100644
--- a/test/fixtures/transformation/es6-modules-system/exports-default/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/exports-default/expected.js
@@ -1,4 +1,5 @@
 System.register([], function (_export) {
+  var Foo;
   _export("default", foo);
 
   function foo() {}
@@ -19,7 +20,7 @@ System.register([], function (_export) {
 
       _export("default", function () {});
 
-      var Foo = function Foo() {};
+      Foo = function Foo() {};
 
       _export("default", Foo);
     }
diff --git a/test/fixtures/transformation/es6-modules-system/exports-from/expected.js b/test/fixtures/transformation/es6-modules-system/exports-from/expected.js
index 47083a27f1..b653c04c75 100644
--- a/test/fixtures/transformation/es6-modules-system/exports-from/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/exports-from/expected.js
@@ -1,12 +1,10 @@
 System.register(["foo"], function (_export) {
-  var _foo;
   return {
-    setters: [function (m) {
-      _foo = m
-
-      for (var i in _foo) {
-        _export(i, _foo[i])
+    setters: [function (_foo) {
+      for (var _key in _foo) {
+        _export(_key, _foo[_key])
       }
+
       _export("foo", _foo.foo);
 
       _export("foo", _foo.foo);
@@ -20,7 +18,6 @@ System.register(["foo"], function (_export) {
       _export("default", _foo.foo);
 
       _export("bar", _foo.bar);
-
     }],
     execute: function () {
       "use strict";
diff --git a/test/fixtures/transformation/es6-modules-system/exports-variable/expected.js b/test/fixtures/transformation/es6-modules-system/exports-variable/expected.js
index 984e2fb108..60dbd28db2 100644
--- a/test/fixtures/transformation/es6-modules-system/exports-variable/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/exports-variable/expected.js
@@ -1,4 +1,5 @@
 System.register([], function (_export) {
+  var foo, foo2, foo3, foo4, foo5, foo6, foo8;
   _export("foo7", foo7);
 
   function foo7() {}
@@ -7,13 +8,13 @@ System.register([], function (_export) {
     execute: function () {
       "use strict";
 
-      var foo = _export("foo", 1);
-      var foo2 = _export("foo2", function () {});
-      var foo3 = _export("foo3", undefined);
-      var foo4 = _export("foo4", 2);
-      var foo5 = _export("foo5", undefined);
-      var foo6 = _export("foo6", 3);
-      var foo8 = function foo8() {};
+      foo = _export("foo", 1);
+      foo2 = _export("foo2", function () {});
+      foo3 = _export("foo3", undefined);
+      foo4 = _export("foo4", 2);
+      foo5 = _export("foo5", undefined);
+      foo6 = _export("foo6", 3);
+      foo8 = function foo8() {};
 
       _export("foo8", foo8);
     }
diff --git a/test/fixtures/transformation/es6-modules-system/hoist-function-exports/expected.js b/test/fixtures/transformation/es6-modules-system/hoist-function-exports/expected.js
index e74627e56e..68d36802b2 100644
--- a/test/fixtures/transformation/es6-modules-system/hoist-function-exports/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/hoist-function-exports/expected.js
@@ -1,24 +1,20 @@
 System.register(["./evens"], function (_export) {
-  var p;
-
+  var isEven, p, isOdd;
   _export("nextOdd", nextOdd);
 
   function nextOdd(n) {
     return _export("p", p = isEven(n) ? n + 1 : n + 2);
   }
 
-  var _evens;
   return {
-    setters: [function (m) {
-      _evens = m
+    setters: [function (_evens) {
+      isEven = _evens.isEven;
     }],
     execute: function () {
       "use strict";
 
-      var isEven = _evens.isEven;
-      _export("p", p = 5);
-
-      var isOdd = _export("isOdd", (function (isEven) {
+      p = _export("p", 5);
+      isOdd = _export("isOdd", (function (isEven) {
         return function (n) {
           return !isEven(n);
         };
diff --git a/test/fixtures/transformation/es6-modules-system/imports-default/expected.js b/test/fixtures/transformation/es6-modules-system/imports-default/expected.js
index 739bb3d898..22870cf020 100644
--- a/test/fixtures/transformation/es6-modules-system/imports-default/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/imports-default/expected.js
@@ -1,14 +1,12 @@
-System.register([], function (_export) {
-  var _foo;
+System.register(["foo"], function (_export) {
+  var foo, foo;
   return {
-    setters: [function (m) {
-      _foo = m
+    setters: [function (_foo) {
+      foo = _foo["default"];
+      foo = _foo["default"];
     }],
     execute: function () {
       "use strict";
-
-      var foo = _foo["default"];
-      var foo = _foo["default"];
     }
   };
 });
diff --git a/test/fixtures/transformation/es6-modules-system/imports-glob/expected.js b/test/fixtures/transformation/es6-modules-system/imports-glob/expected.js
index 90b8ff9676..4d4116a967 100644
--- a/test/fixtures/transformation/es6-modules-system/imports-glob/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/imports-glob/expected.js
@@ -1,13 +1,11 @@
 System.register(["foo"], function (_export) {
-  var _foo;
+  var foo;
   return {
-    setters: [function (m) {
-      _foo = m
+    setters: [function (_foo) {
+      foo = _foo;
     }],
     execute: function () {
       "use strict";
-
-      var foo = _foo;
     }
   };
-});
\ No newline at end of file
+});
diff --git a/test/fixtures/transformation/es6-modules-system/imports-mixing/expected.js b/test/fixtures/transformation/es6-modules-system/imports-mixing/expected.js
index fa48c8ee8a..a460c9428d 100644
--- a/test/fixtures/transformation/es6-modules-system/imports-mixing/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/imports-mixing/expected.js
@@ -1,14 +1,12 @@
 System.register(["foo"], function (_export) {
-  var _foo;
+  var foo, xyz;
   return {
-    setters: [function (m) {
-      _foo = m
+    setters: [function (_foo) {
+      foo = _foo["default"];
+      xyz = _foo.baz;
     }],
     execute: function () {
       "use strict";
-
-      var foo = _foo["default"];
-      var xyz = _foo.baz;
     }
   };
 });
diff --git a/test/fixtures/transformation/es6-modules-system/imports-named/expected.js b/test/fixtures/transformation/es6-modules-system/imports-named/expected.js
index 6a0ac43741..ecfffa1e63 100644
--- a/test/fixtures/transformation/es6-modules-system/imports-named/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/imports-named/expected.js
@@ -1,18 +1,16 @@
 System.register(["foo"], function (_export) {
-  var _foo;
+  var bar, bar, baz, baz, baz, xyz;
   return {
-    setters: [function (m) {
-      _foo = m
+    setters: [function (_foo) {
+      bar = _foo.bar;
+      bar = _foo.bar;
+      baz = _foo.baz;
+      baz = _foo.bar;
+      baz = _foo.bar;
+      xyz = _foo.xyz;
     }],
     execute: function () {
       "use strict";
-
-      var bar = _foo.bar;
-      var bar = _foo.bar;
-      var baz = _foo.baz;
-      var baz = _foo.bar;
-      var baz = _foo.bar;
-      var xyz = _foo.xyz;
     }
   };
-});
\ No newline at end of file
+});
diff --git a/test/fixtures/transformation/es6-modules-system/imports/expected.js b/test/fixtures/transformation/es6-modules-system/imports/expected.js
index 97413af25b..d83799ca9e 100644
--- a/test/fixtures/transformation/es6-modules-system/imports/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/imports/expected.js
@@ -1,15 +1,8 @@
 System.register(["foo", "foo-bar", "./directory/foo-bar"], function (_export) {
-  var _foo, _fooBar, _directoryFooBar;
   return {
-    setters: [function (m) {
-      _foo = m
-    }, function (m) {
-      _fooBar = m
-    }, function (m) {
-      _directoryFooBar = m
-    }],
+    setters: [function (_foo) {}, function (_fooBar) {}, function (_directoryFooBar) {}],
     execute: function () {
       "use strict";
     }
   };
-});
\ No newline at end of file
+});
diff --git a/test/fixtures/transformation/es6-modules-system/overview/expected.js b/test/fixtures/transformation/es6-modules-system/overview/expected.js
index f88db05b90..67fbbc561d 100644
--- a/test/fixtures/transformation/es6-modules-system/overview/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/overview/expected.js
@@ -1,24 +1,18 @@
 System.register(["foo", "foo-bar", "./directory/foo-bar"], function (_export) {
-  var _foo, _fooBar, _directoryFooBar;
+  var foo, foo, bar, bar, test;
   return {
-    setters: [function (m) {
-      _foo = m
-    }, function (m) {
-      _fooBar = m
-    }, function (m) {
-      _directoryFooBar = m
-    }],
+    setters: [function (_foo) {
+      foo = _foo["default"];
+      foo = _foo;
+      bar = _foo.bar;
+      bar = _foo.foo;
+    }, function (_fooBar) {}, function (_directoryFooBar) {}],
     execute: function () {
       "use strict";
 
-      var foo = _foo["default"];
-      var foo = _foo;
-      var bar = _foo.bar;
-      var bar = _foo.foo;
       _export("test", test);
 
-      var test = _export("test", 5);
-
+      test = _export("test", 5);
       _export("default", test);
     }
   };
diff --git a/test/fixtures/transformation/es6-modules-system/remap/expected.js b/test/fixtures/transformation/es6-modules-system/remap/expected.js
index 44b7d1f1f8..efe3cec743 100644
--- a/test/fixtures/transformation/es6-modules-system/remap/expected.js
+++ b/test/fixtures/transformation/es6-modules-system/remap/expected.js
@@ -1,10 +1,11 @@
 System.register([], function (_export) {
+  var test;
   return {
     setters: [],
     execute: function () {
       "use strict";
 
-      var test = _export("test", 2);
+      test = _export("test", 2);
       _export("test", test = 5);
       _export("test", test += 1);