diff --git a/packages/babel-plugin-transform-es2015-modules-systemjs/src/index.js b/packages/babel-plugin-transform-es2015-modules-systemjs/src/index.js
index 1f332b384a..0b00439c4e 100644
--- a/packages/babel-plugin-transform-es2015-modules-systemjs/src/index.js
+++ b/packages/babel-plugin-transform-es2015-modules-systemjs/src/index.js
@@ -74,6 +74,7 @@ export default function ({ types: t }) {
           let setters = [];
           let sources = [];
           let variableIds = [];
+          let removedPaths = [];
 
           function addExportName(key, val) {
             exportNames[key] = exportNames[key] || [];
@@ -105,7 +106,7 @@ export default function ({ types: t }) {
           for (let path of body) {
             if (canHoist && path.isFunctionDeclaration()) {
               beforeBody.push(path.node);
-              path.remove();
+              removedPaths.push(path);
             } else if (path.isImportDeclaration()) {
               let source = path.node.source.value;
               pushModule(source, "imports", path.node.specifiers);
@@ -135,7 +136,7 @@ export default function ({ types: t }) {
                   path.replaceWithMultiple(nodes);
                 } else {
                   beforeBody = beforeBody.concat(nodes);
-                  path.remove();
+                  removedPaths.push(path);
                 }
               } else {
                 path.replaceWith(buildExportCall("default", declar.node));
@@ -149,7 +150,16 @@ export default function ({ types: t }) {
                 let nodes = [];
                 let bindingIdentifiers;
                 if (path.isFunction()) {
-                  bindingIdentifiers = { [declar.node.id.name]: declar.node.id };
+                  let node = declar.node;
+                  let name = node.id.name;
+                  if (canHoist) {
+                    addExportName(name, name);
+                    beforeBody.push(node);
+                    beforeBody.push(buildExportCall(name, node.id));
+                    removedPaths.push(path);
+                  } else {
+                    bindingIdentifiers = { [name]: node.id };  
+                  }
                 } else {
                   bindingIdentifiers = declar.getBindingIdentifiers();
                 }
@@ -158,22 +168,22 @@ export default function ({ types: t }) {
                   nodes.push(buildExportCall(name, t.identifier(name)));
                 }
                 path.insertAfter(nodes);
-              }
+              } else {
+                let specifiers = path.node.specifiers;
+                if (specifiers && specifiers.length) {
+                  if (path.node.source) {
+                    pushModule(path.node.source.value, "exports", specifiers);
+                    path.remove();
+                  } else {
+                    let nodes = [];
 
-              let specifiers = path.node.specifiers;
-              if (specifiers && specifiers.length) {
-                if (path.node.source) {
-                  pushModule(path.node.source.value, "exports", specifiers);
-                  path.remove();
-                } else {
-                  let nodes = [];
+                    for (let specifier of specifiers) {
+                      nodes.push(buildExportCall(specifier.exported.name, specifier.local));
+                      addExportName(specifier.local.name, specifier.exported.name);
+                    }
 
-                  for (let specifier of specifiers) {
-                    nodes.push(buildExportCall(specifier.exported.name, specifier.local));
-                    addExportName(specifier.local.name, specifier.exported.name);
+                    path.replaceWithMultiple(nodes);
                   }
-
-                  path.replaceWithMultiple(nodes);
                 }
               }
             }
@@ -245,6 +255,10 @@ export default function ({ types: t }) {
             scope: path.scope
           });
 
+          for (let path of removedPaths) {
+            path.remove();
+          }
+
           path.node.body = [
             buildTemplate({
               SYSTEM_REGISTER: t.memberExpression(t.identifier(state.opts.systemGlobal || "System"), t.identifier("register")),
diff --git a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/T6973/actual.js b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/T6973/actual.js
new file mode 100644
index 0000000000..9d1ab87d80
--- /dev/null
+++ b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/T6973/actual.js
@@ -0,0 +1,9 @@
+export function a() {
+  alert("a");
+}
+
+function b() {
+  a();
+}
+
+b();
diff --git a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/T6973/expected.js b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/T6973/expected.js
new file mode 100644
index 0000000000..c146273d81
--- /dev/null
+++ b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/T6973/expected.js
@@ -0,0 +1,20 @@
+System.register([], function (_export, _context) {
+  "use strict";
+
+  function a() {
+    alert("a");
+  }
+
+  _export("a", a);
+
+  function b() {
+    a();
+  }
+
+  return {
+    setters: [],
+    execute: function () {
+      b();
+    }
+  };
+});
diff --git a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/options.json b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/options.json
new file mode 100644
index 0000000000..576c2a257c
--- /dev/null
+++ b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/regression/options.json
@@ -0,0 +1,3 @@
+{
+  "plugins": ["external-helpers", "transform-es2015-modules-systemjs"]
+}
diff --git a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/exports-named/expected.js b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/exports-named/expected.js
index fa86ac77b8..63fb84d74b 100644
--- a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/exports-named/expected.js
+++ b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/exports-named/expected.js
@@ -1,6 +1,14 @@
 System.register([], function (_export, _context) {
   "use strict";
 
+  function foo() {}
+
+  _export("foo", foo);
+
+  function foo2(bar) {}
+
+  _export("foo2", foo2);
+
   return {
     setters: [],
     execute: function () {
@@ -17,14 +25,6 @@ System.register([], function (_export, _context) {
       _export("default", foo);
 
       _export("bar", bar);
-
-      function foo() {}
-
-      _export("foo", foo);
-
-      function foo2(bar) {}
-
-      _export("foo2", foo2);
     }
   };
 });
diff --git a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/hoist-function-exports/expected.js b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/hoist-function-exports/expected.js
index 6fbc45668f..c3acf4d1d1 100644
--- a/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/hoist-function-exports/expected.js
+++ b/packages/babel-plugin-transform-es2015-modules-systemjs/test/fixtures/systemjs/hoist-function-exports/expected.js
@@ -2,17 +2,17 @@ System.register(["./evens"], function (_export, _context) {
   "use strict";
 
   var isEven, p, a, i, j, isOdd;
+  function nextOdd(n) {
+    return _export("p", p = isEven(n) ? n + 1 : n + 2);
+  }
+
+  _export("nextOdd", nextOdd);
+
   return {
     setters: [function (_evens) {
       isEven = _evens.isEven;
     }],
     execute: function () {
-      function nextOdd(n) {
-        return _export("p", p = isEven(n) ? n + 1 : n + 2);
-      }
-
-      _export("nextOdd", nextOdd);
-
       _export("p", p = 5);
 
       _export("p", p);