diff --git a/.changeset/hungry-news-admire.md b/.changeset/hungry-news-admire.md
new file mode 100644
index 00000000..c62ae577
--- /dev/null
+++ b/.changeset/hungry-news-admire.md
@@ -0,0 +1,5 @@
+---
+'microbundle': patch
+---
+
+Add support for generating inline sourcemaps
diff --git a/src/index.js b/src/index.js
index 3887c51a..29988aba 100644
--- a/src/index.js
+++ b/src/index.js
@@ -57,7 +57,11 @@ export default async function microbundle(inputOptions) {
 	options.name = finalName;
 	options.pkg.name = pkgName;
 
-	if (options.sourcemap !== false) {
+	if (options.sourcemap === 'inline') {
+		console.log(
+			'Warning: inline sourcemaps should only be used for debugging purposes.',
+		);
+	} else if (options.sourcemap !== false) {
 		options.sourcemap = true;
 	}
 
diff --git a/src/prog.js b/src/prog.js
index 2211d217..a40a99c2 100644
--- a/src/prog.js
+++ b/src/prog.js
@@ -55,7 +55,7 @@ export default handler => {
 		.option('--strict', 'Enforce undefined global context and add "use strict"')
 		.option('--name', 'Specify name exposed in UMD builds')
 		.option('--cwd', 'Use an alternative working directory', '.')
-		.option('--sourcemap', 'Generate source map', true)
+		.option('--sourcemap', 'Generate source map')
 		.option(
 			'--css-modules',
 			'Turns on css-modules for all .css imports. Passing a string will override the scopeName. eg --css-modules="_[hash]"',
diff --git a/test/__snapshots__/index.test.js.snap b/test/__snapshots__/index.test.js.snap
index f5e70e8f..168a0273 100644
--- a/test/__snapshots__/index.test.js.snap
+++ b/test/__snapshots__/index.test.js.snap
@@ -1675,6 +1675,51 @@ exports[`fixtures build esnext-ts with microbundle 6`] = `
 "
 `;
 
+exports[`fixtures build inline-source-map with microbundle 1`] = `
+"Used script: microbundle --sourcemap inline
+
+Directory tree:
+
+inline-source-map
+  dist
+    inline-source-map.esm.js
+    inline-source-map.js
+    inline-source-map.umd.js
+  package.json
+  src
+    index.js
+    two.js
+
+
+Build \\"inlineSourceMap\\" to dist:
+187 B: inline-source-map.js.gz
+138 B: inline-source-map.js.br
+188 B: inline-source-map.esm.js.gz
+139 B: inline-source-map.esm.js.br
+279 B: inline-source-map.umd.js.gz
+219 B: inline-source-map.umd.js.br"
+`;
+
+exports[`fixtures build inline-source-map with microbundle 2`] = `3`;
+
+exports[`fixtures build inline-source-map with microbundle 3`] = `
+"var r=function(){try{var r=arguments;return Promise.resolve([].slice.call(r).reduce(function(r,e){return r+e},0))}catch(r){return Promise.reject(r)}};export default function(){try{var e=arguments,t=[].slice.call(e);return Promise.resolve(r.apply(void 0,t)).then(function(e){return Promise.resolve(r.apply(void 0,t)).then(function(r){return[e,r]})})}catch(r){return Promise.reject(r)}}
+//# sourceMappingURL=data:application/json;charset=utf-8;base64,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
+"
+`;
+
+exports[`fixtures build inline-source-map with microbundle 4`] = `
+"var r=function(){try{var r=arguments;return Promise.resolve([].slice.call(r).reduce(function(r,e){return r+e},0))}catch(r){return Promise.reject(r)}};module.exports=function(){try{var e=arguments,t=[].slice.call(e);return Promise.resolve(r.apply(void 0,t)).then(function(e){return Promise.resolve(r.apply(void 0,t)).then(function(r){return[e,r]})})}catch(r){return Promise.reject(r)}};
+//# sourceMappingURL=data:application/json;charset=utf-8;base64,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
+"
+`;
+
+exports[`fixtures build inline-source-map with microbundle 5`] = `
+"!function(e,r){\\"object\\"==typeof exports&&\\"undefined\\"!=typeof module?module.exports=r():\\"function\\"==typeof define&&define.amd?define(r):(e=e||self).inlineSourceMap=r()}(this,function(){var e=function(){try{var e=arguments;return Promise.resolve([].slice.call(e).reduce(function(e,r){return e+r},0))}catch(e){return Promise.reject(e)}};return function(){try{var r=arguments,n=[].slice.call(r);return Promise.resolve(e.apply(void 0,n)).then(function(r){return Promise.resolve(e.apply(void 0,n)).then(function(e){return[r,e]})})}catch(e){return Promise.reject(e)}}});
+//# sourceMappingURL=data:application/json;charset=utf-8;base64,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
+"
+`;
+
 exports[`fixtures build jsx with microbundle 1`] = `
 "Used script: microbundle
 
diff --git a/test/fixtures/inline-source-map/package.json b/test/fixtures/inline-source-map/package.json
new file mode 100644
index 00000000..7f4b57c2
--- /dev/null
+++ b/test/fixtures/inline-source-map/package.json
@@ -0,0 +1,6 @@
+{
+  "name": "inline-source-map",
+  "scripts": {
+    "build": "microbundle --sourcemap inline"
+  }
+}
diff --git a/test/fixtures/inline-source-map/src/index.js b/test/fixtures/inline-source-map/src/index.js
new file mode 100644
index 00000000..a756a0a4
--- /dev/null
+++ b/test/fixtures/inline-source-map/src/index.js
@@ -0,0 +1,5 @@
+import { two } from './two';
+
+export default async function(...args) {
+	return [await two(...args), await two(...args)];
+}
diff --git a/test/fixtures/inline-source-map/src/two.js b/test/fixtures/inline-source-map/src/two.js
new file mode 100644
index 00000000..9f1f741b
--- /dev/null
+++ b/test/fixtures/inline-source-map/src/two.js
@@ -0,0 +1,3 @@
+export async function two(...args) {
+	return args.reduce((total, value) => total + value, 0);
+}