diff --git a/example_packages/preprocess_fypp/README.md b/example_packages/preprocess_fypp/README.md
new file mode 100644
index 0000000000..8f3d323eaa
--- /dev/null
+++ b/example_packages/preprocess_fypp/README.md
@@ -0,0 +1,2 @@
+# preprocess_fypp
+My cool new project!
diff --git a/example_packages/preprocess_fypp/fpm.toml b/example_packages/preprocess_fypp/fpm.toml
new file mode 100644
index 0000000000..3bb9141fed
--- /dev/null
+++ b/example_packages/preprocess_fypp/fpm.toml
@@ -0,0 +1,2 @@
+name = "preprocess_fypp"
+
diff --git a/example_packages/preprocess_fypp/src/file1.fypp b/example_packages/preprocess_fypp/src/file1.fypp
new file mode 100644
index 0000000000..582006a7bd
--- /dev/null
+++ b/example_packages/preprocess_fypp/src/file1.fypp
@@ -0,0 +1,15 @@
+#: set SHOW = 1
+
+module my_mod1
+  implicit none
+
+    real, parameter :: pi = 3.1415926536  
+    real, parameter :: e = 2.7182818285 
+
+  contains
+
+    subroutine show_consts()
+      print *, "pi = ", pi
+      if (${SHOW}$ == 1) print *, "e = ", e
+    end subroutine show_consts
+end module my_mod1
\ No newline at end of file
diff --git a/example_packages/preprocess_fypp/src/file2.fypp b/example_packages/preprocess_fypp/src/file2.fypp
new file mode 100644
index 0000000000..5501da58c5
--- /dev/null
+++ b/example_packages/preprocess_fypp/src/file2.fypp
@@ -0,0 +1,15 @@
+#: set SHOW = 2
+
+module my_mod2
+  implicit none
+
+    real, parameter :: pi = 3.1415926536  
+    real, parameter :: e = 2.7182818285 
+
+  contains
+
+    subroutine show_consts2()
+      print *, "pi = ", pi
+      if (${SHOW}$ == 1) print *, "e = ", e
+    end subroutine show_consts2
+end module my_mod2
\ No newline at end of file
diff --git a/example_packages/preprocess_fypp/src/preprocess_fypp.f90 b/example_packages/preprocess_fypp/src/preprocess_fypp.f90
new file mode 100644
index 0000000000..57ad3cb8eb
--- /dev/null
+++ b/example_packages/preprocess_fypp/src/preprocess_fypp.f90
@@ -0,0 +1,10 @@
+module preprocess_fypp
+  implicit none
+  private
+
+  public :: say_hello
+contains
+  subroutine say_hello
+    print *, "Hello, preprocess_fypp!"
+  end subroutine say_hello
+end module preprocess_fypp
diff --git a/fypp-gfortran.py b/fypp-gfortran.py
new file mode 100755
index 0000000000..28768a6a19
--- /dev/null
+++ b/fypp-gfortran.py
@@ -0,0 +1,33 @@
+#!/usr/bin/env python3
+import sys
+import subprocess
+from pathlib import Path
+
+# Read the system arguments.
+args = sys.argv[1:]
+
+# Get the filenames with .fypp extension and convert to string.
+source_file = [arg for arg in args if arg.endswith(".fypp")]
+output_file = [arg for arg in args if arg.endswith(".o")]
+
+if len(source_file) != len(output_file):
+    subprocess.run(["gfortran"] + args, check=True)
+    sys.exit(0)
+
+source_file = source_file[0]
+output_file = output_file[0]
+preprocessed = output_file.replace(".o", ".f90")
+
+# Filter out the macro definitions.
+macros = [arg for arg in args if arg.startswith("-D")]
+
+# Filter out the include paths with -I prefix.
+include_paths = [arg for arg in args if arg.startswith("-I")]
+
+subprocess.run(
+    ["fypp", "-n", source_file, preprocessed] + macros + include_paths,
+    check=True
+)
+
+args = [arg for arg in args if arg != source_file and not arg in macros] + [preprocessed]
+subprocess.run(["gfortran"] + args, check=True)
diff --git a/src/fpm_sources.f90 b/src/fpm_sources.f90
index b821362c55..16586da9ef 100644
--- a/src/fpm_sources.f90
+++ b/src/fpm_sources.f90
@@ -15,8 +15,8 @@ module fpm_sources
 private
 public :: add_sources_from_dir, add_executable_sources
 
-character(4), parameter :: fortran_suffixes(2) = [".f90", &
-                                                  ".f  "]
+character(5), parameter :: fortran_suffixes(3) = [".f90 ", ".fypp", &
+                                                  ".f   "]
 character(4), parameter :: c_suffixes(4) = [".c  ", ".h  ", ".cpp", ".hpp"]
 
 contains
diff --git a/src/fpm_targets.f90 b/src/fpm_targets.f90
index ca88bb5e35..9119f66d8a 100644
--- a/src/fpm_targets.f90
+++ b/src/fpm_targets.f90
@@ -270,8 +270,9 @@ subroutine build_target_list(targets,model)
 
                     call add_target(targets,package=model%packages(j)%name,type = FPM_TARGET_OBJECT,&
                                 output_name = get_object_name(sources(i)), &
-                                source = sources(i) &
-                                )
+                                source = sources(i), &
+                                macros = model%packages(j)%macros, &
+                                version = model%packages(j)%version)
 
                     if (sources(i)%unit_scope == FPM_SCOPE_APP) then