diff --git a/acorn.js b/acorn.js
index 8515d6d0b0..b3ee37430f 100644
--- a/acorn.js
+++ b/acorn.js
@@ -659,8 +659,8 @@
 
   var b_stat = {token: "{", isExpr: false}, b_expr = {token: "{", isExpr: true}, b_tmpl = {token: "${", isExpr: true};
   var p_stat = {token: "(", isExpr: false}, p_expr = {token: "(", isExpr: true};
-  var q_tmpl = {token: "`", isExpr: true};
   var j_oTag = {token: "<tag", isExpr: false}, j_cTag = {token: "</tag", isExpr: false}, j_expr = {token: "<tag>...</tag>", isExpr: true};
+  var q_tmpl = {token: "`", isExpr: true}, f_expr = {token: "function", isExpr: true};
 
   function curTokContext() {
     return tokContext[tokContext.length - 1];
@@ -698,8 +698,14 @@
     // Update context info
     if (type === _parenR || type === _braceR) {
       var out = tokContext.pop();
-      tokExprAllowed = !(out && out.isExpr);
-      preserveSpace = out === b_tmpl || curTokContext() === j_expr;
+      if (out === b_tmpl) {
+        preserveSpace = true;
+      } else if (out === b_stat && curTokContext() === f_expr) {
+        tokContext.pop();
+        tokExprAllowed = false;
+      } else {
+        tokExprAllowed = !(out && out.isExpr);
+      }
     } else if (type === _braceL) {
       tokContext.push(braceIsBlock(prevType) ? b_stat : b_expr);
       tokExprAllowed = true;
@@ -714,7 +720,10 @@
       // tokExprAllowed stays unchanged
     } else if (type.keyword && prevType == _dot) {
       tokExprAllowed = false;
-    } else if (tokExprAllowed && type == _function) {
+    } else if (type == _function) {
+      if (curTokContext() !== b_stat) {
+        tokContext.push(f_expr);
+      }
       tokExprAllowed = false;
     } else if (type === _backQuote) {
       if (curTokContext() === q_tmpl) {
diff --git a/test/tests.js b/test/tests.js
index 172eb1fb87..dee69bb4a3 100644
--- a/test/tests.js
+++ b/test/tests.js
@@ -28862,3 +28862,48 @@ test("#!/usr/bin/node\n;", {}, {
     end: 15
   }]
 });
+
+// https://github.com/marijnh/acorn/issues/204
+test("(function () {} / 1)", {
+  type: "Program",
+  body: [{
+    type: "ExpressionStatement",
+    expression: {
+      type: "BinaryExpression",
+      left: {
+        type: "FunctionExpression",
+        id: null,
+        params: [],
+        body: {
+          type: "BlockStatement",
+          body: []
+        }
+      },
+      operator: "/",
+      right: {type: "Literal", value: 1}
+    }
+  }]
+});
+
+test("function f() {} / 1 /", {
+  type: "Program",
+  body: [
+    {
+      type: "FunctionDeclaration",
+      id: {type: "Identifier", name: "f"},
+      params: [],
+      body: {
+        type: "BlockStatement",
+        body: []
+      }
+    },
+    {
+      type: "ExpressionStatement",
+      expression: {
+        type: "Literal",
+        regex: {pattern: " 1 ", flags: ""},
+        value: {}
+      }
+    }
+  ]
+});