diff --git a/internal/compiler/analyze.go b/internal/compiler/analyze.go
index 739cd07993..1cc7807386 100644
--- a/internal/compiler/analyze.go
+++ b/internal/compiler/analyze.go
@@ -140,7 +140,7 @@ func (c *Compiler) _analyzeQuery(raw *ast.RawStmt, query string, failfast bool)
 	if err := check(validate.In(c.catalog, raw)); err != nil {
 		return nil, err
 	}
-	rvs := rangeVars(raw.Stmt)
+	rvs, rss, rfs := rawRangeTblRefs(raw.Stmt)
 	refs, errs := findParameters(raw.Stmt)
 	if len(errs) > 0 {
 		if failfast {
@@ -160,7 +160,7 @@ func (c *Compiler) _analyzeQuery(raw *ast.RawStmt, query string, failfast bool)
 		return nil, err
 	}
 
-	params, err := c.resolveCatalogRefs(qc, rvs, refs, namedParams, embeds)
+	params, err := c.resolveCatalogRefs(qc, rvs, rss, rfs, refs, namedParams, embeds)
 	if err := check(err); err != nil {
 		return nil, err
 	}
diff --git a/internal/compiler/parse.go b/internal/compiler/parse.go
index 53e3043c7d..8336274445 100644
--- a/internal/compiler/parse.go
+++ b/internal/compiler/parse.go
@@ -108,16 +108,22 @@ func (c *Compiler) parseQuery(stmt ast.Node, src string, o opts.Parser) (*Query,
 	}, nil
 }
 
-func rangeVars(root ast.Node) []*ast.RangeVar {
+func rawRangeTblRefs(root ast.Node) ([]*ast.RangeVar, []*ast.RangeSubselect, []*ast.RangeFunction) {
 	var vars []*ast.RangeVar
-	find := astutils.VisitorFunc(func(node ast.Node) {
+	var subs []*ast.RangeSubselect
+	var funs []*ast.RangeFunction
+	find := astutils.SingleQueryVisitorFunc(func(node ast.Node) {
 		switch n := node.(type) {
 		case *ast.RangeVar:
 			vars = append(vars, n)
+		case *ast.RangeSubselect:
+			subs = append(subs, n)
+		case *ast.RangeFunction:
+			funs = append(funs, n)
 		}
 	})
 	astutils.Walk(find, root)
-	return vars
+	return vars, subs, funs
 }
 
 func uniqueParamRefs(in []paramRef, dollar bool) []paramRef {
diff --git a/internal/compiler/resolve.go b/internal/compiler/resolve.go
index 4624c5a45d..ce5af9fcec 100644
--- a/internal/compiler/resolve.go
+++ b/internal/compiler/resolve.go
@@ -21,7 +21,7 @@ func dataType(n *ast.TypeName) string {
 	}
 }
 
-func (comp *Compiler) resolveCatalogRefs(qc *QueryCatalog, rvs []*ast.RangeVar, args []paramRef, params *named.ParamSet, embeds rewrite.EmbedSet) ([]Parameter, error) {
+func (comp *Compiler) resolveCatalogRefs(qc *QueryCatalog, rvs []*ast.RangeVar, rss []*ast.RangeSubselect, rfs []*ast.RangeFunction, args []paramRef, params *named.ParamSet, embeds rewrite.EmbedSet) ([]Parameter, error) {
 	c := comp.catalog
 
 	aliasMap := map[string]*ast.TableName{}
@@ -78,6 +78,19 @@ func (comp *Compiler) resolveCatalogRefs(qc *QueryCatalog, rvs []*ast.RangeVar,
 		}
 	}
 
+	nonTableAliases := make(map[string]bool)
+	for _, rs := range rss {
+		if rs != nil && rs.Alias != nil && rs.Alias.Aliasname != nil {
+			nonTableAliases[*rs.Alias.Aliasname] = true
+		}
+	}
+
+	for _, rf := range rfs {
+		if rf != nil && rf.Alias != nil && rf.Alias.Aliasname != nil {
+			nonTableAliases[*rf.Alias.Aliasname] = true
+		}
+	}
+
 	// resolve a table for an embed
 	for _, embed := range embeds {
 		table, err := c.GetTable(embed.Table)
@@ -91,6 +104,10 @@ func (comp *Compiler) resolveCatalogRefs(qc *QueryCatalog, rvs []*ast.RangeVar,
 			continue
 		}
 
+		if nonTableAliases[embed.Table.Name] {
+			return nil, fmt.Errorf("the embed macro can only be used with tables in models, not subqueries or function-defined tables: %q", embed.Orig())
+		}
+
 		return nil, fmt.Errorf("unable to resolve table with %q: %w", embed.Orig(), err)
 	}
 
diff --git a/internal/sql/astutils/walk.go b/internal/sql/astutils/walk.go
index 0943379f03..30471ded25 100644
--- a/internal/sql/astutils/walk.go
+++ b/internal/sql/astutils/walk.go
@@ -17,6 +17,19 @@ func (vf VisitorFunc) Visit(node ast.Node) Visitor {
 	return vf
 }
 
+type SingleQueryVisitorFunc func(ast.Node)
+
+func (vf SingleQueryVisitorFunc) Visit(node ast.Node) Visitor {
+	switch node.(type) {
+	case *ast.RangeSubselect, *ast.RangeTblEntry:
+		vf(node)
+		return nil
+	default:
+		vf(node)
+		return vf
+	}
+}
+
 func Walk(f Visitor, node ast.Node) {
 	if f = f.Visit(node); f == nil {
 		return