diff --git a/interpreter/callable.go b/interpreter/callable.go
index 7a7a904..4422715 100644
--- a/interpreter/callable.go
+++ b/interpreter/callable.go
@@ -40,12 +40,14 @@ func (n *nativeCallable) String() string {
 // function is a struct that implements the callable interface.
 type function struct {
 	declaration *ast.FunctionStmt
+	closure     *environment
 }
 
 // newFunction creates a new function.
-func newFunction(declaration *ast.FunctionStmt) *function {
+func newFunction(declaration *ast.FunctionStmt, closure *environment) *function {
 	return &function{
 		declaration: declaration,
+		closure:     closure,
 	}
 }
 
@@ -56,7 +58,7 @@ func (f *function) arity() int {
 
 // call calls the function with the given arguments.
 func (f *function) call(i *Interpreter, arguments []any) (result any) {
-	env := newEnvironment(i.globals)
+	env := newEnvironment(f.closure)
 
 	for i, param := range f.declaration.Params {
 		env.define(param.Lexeme, arguments[i])
diff --git a/interpreter/interpreter.go b/interpreter/interpreter.go
index 696dbfc..2cdf2ce 100644
--- a/interpreter/interpreter.go
+++ b/interpreter/interpreter.go
@@ -59,7 +59,7 @@ func (i *Interpreter) VisitExpressionStmt(es *ast.ExpressionStmt) any {
 
 // VisitFunctionStmt visits a function statement.
 func (i *Interpreter) VisitFunctionStmt(fs *ast.FunctionStmt) any {
-	function := newFunction(fs)
+	function := newFunction(fs, i.env)
 	i.env.define(fs.Name.Lexeme, function)
 	return nil
 }
diff --git a/interpreter/interpreter_test.go b/interpreter/interpreter_test.go
index 4f30a02..e334d1d 100644
--- a/interpreter/interpreter_test.go
+++ b/interpreter/interpreter_test.go
@@ -619,3 +619,80 @@ func TestInterpretWhileStatement(t *testing.T) {
 		t.Errorf("run() = %v; want %v", out, expected)
 	}
 }
+
+func TestInterpretFunctionStatement(t *testing.T) {
+	i := New(errors.NewMockErrorLogger())
+	functionStmt := &ast.FunctionStmt{
+		Name:   token.Token{Type: token.IDENTIFIER, Lexeme: "foo"},
+		Params: []token.Token{},
+		Body:   []ast.Stmt{&ast.BlockStmt{Statements: []ast.Stmt{}}},
+	}
+
+	i.VisitFunctionStmt(functionStmt)
+	result := i.env.get("foo")
+	if result == nil {
+		t.Errorf("expected function, got nil")
+	}
+}
+
+func TestInterpretFunctionCall(t *testing.T) {
+	i := New(errors.NewMockErrorLogger())
+	functionStmt := &ast.FunctionStmt{
+		Name:   token.Token{Type: token.IDENTIFIER, Lexeme: "foo"},
+		Params: []token.Token{},
+		Body:   []ast.Stmt{&ast.BlockStmt{Statements: []ast.Stmt{&ast.PrintStmt{Expression: &ast.LiteralExpr{Value: 42.0}}}}},
+	}
+
+	i.VisitFunctionStmt(functionStmt)
+
+	callExpr := &ast.CallExpr{
+		Callee:    &ast.VariableExpr{Name: token.Token{Type: token.IDENTIFIER, Lexeme: "foo"}},
+		Arguments: []ast.Expr{},
+	}
+
+	i.VisitCallExpr(callExpr)
+}
+
+func TestInterpretFunctionCallWithArguments(t *testing.T) {
+	i := New(errors.NewMockErrorLogger())
+	functionStmt := &ast.FunctionStmt{
+		Name:   token.Token{Type: token.IDENTIFIER, Lexeme: "foo"},
+		Params: []token.Token{{Type: token.IDENTIFIER, Lexeme: "a"}},
+		Body:   []ast.Stmt{&ast.BlockStmt{Statements: []ast.Stmt{&ast.PrintStmt{Expression: &ast.VariableExpr{Name: token.Token{Type: token.IDENTIFIER, Lexeme: "a"}}}}}},
+	}
+
+	i.VisitFunctionStmt(functionStmt)
+
+	callExpr := &ast.CallExpr{
+		Callee: &ast.VariableExpr{Name: token.Token{Type: token.IDENTIFIER, Lexeme: "foo"}},
+		Arguments: []ast.Expr{
+			&ast.LiteralExpr{Value: 42.0},
+		},
+	}
+
+	i.VisitCallExpr(callExpr)
+}
+
+func TestInterpretFunctionCallWithWrongNumberOfArguments(t *testing.T) {
+	i := New(errors.NewMockErrorLogger())
+	functionStmt := &ast.FunctionStmt{
+		Name:   token.Token{Type: token.IDENTIFIER, Lexeme: "foo"},
+		Params: []token.Token{{Type: token.IDENTIFIER, Lexeme: "a"}},
+		Body:   []ast.Stmt{&ast.BlockStmt{Statements: []ast.Stmt{}}},
+	}
+
+	i.VisitFunctionStmt(functionStmt)
+
+	callExpr := &ast.CallExpr{
+		Callee:    &ast.VariableExpr{Name: token.Token{Type: token.IDENTIFIER, Lexeme: "foo"}},
+		Arguments: []ast.Expr{},
+	}
+
+	defer func() {
+		if r := recover(); r != "Expected 1 arguments but got 0 [line 0]" {
+			t.Errorf("expected panic with 'expected 1 arguments but got 0', got %v", r)
+		}
+	}()
+
+	i.VisitCallExpr(callExpr)
+}
diff --git a/testdata/counter.lox b/testdata/counter.lox
new file mode 100644
index 0000000..4e89bf1
--- /dev/null
+++ b/testdata/counter.lox
@@ -0,0 +1,13 @@
+fun makeCounter() {
+  var i = 0;
+  fun count() {
+    i = i + 1;
+    print i;
+  }
+
+  return count;
+}
+
+var counter = makeCounter();
+counter(); // "1".
+counter(); // "2".