diff --git a/src/transform/apply-gen.xsl b/src/transform/apply-gen.xsl
index 0a8c5c1..77942ce 100644
--- a/src/transform/apply-gen.xsl
+++ b/src/transform/apply-gen.xsl
@@ -120,15 +120,10 @@
             select="namespace-uri-for-prefix(
                       $ns-prefix, . )" />
 
-  <!-- this ensures that the prefix used is actually defined within
-       our result document and resolves to the proper namespace -->
-  <namespace name="{$ns-prefix}"
-             select="$ns" />
-
   <sequence select="fgen:create-func(
-                      $name-resolv, $local-name, $ns )" />
+                      $name-resolv, $local-name, $ns-prefix, $ns )" />
   <sequence select="fgen:create-tpl(
-                      $name-resolv, . )" />
+                      $name-resolv, ., $ns-prefix, $ns )" />
 </template>
 
 
@@ -154,9 +149,13 @@
 <function name="fgen:create-func">
   <param name="name-resolv" as="xs:QName" />
   <param name="local-name"  as="xs:string" />
+  <param name="ns-prefix"   as="xs:string" />
   <param name="ns"          as="xs:anyURI" />
 
   <out:function name="{$name-resolv}" as="element()">
+    <namespace name="{$ns-prefix}"
+               select="$ns" />
+
     <element name="{$local-name}"
              namespace="{$ns}" />
   </out:function>
@@ -174,12 +173,17 @@
 <function name="fgen:create-tpl">
   <param name="name-resolv" as="xs:QName" />
   <param name="defn"        as="element(xsl:function)" />
+  <param name="ns-prefix"   as="xs:string" />
+  <param name="ns"          as="xs:anyURI" />
 
   <variable name="params"
             select="$defn/xsl:param" />
 
   <out:template mode="f:apply"
                 match="{$name-resolv}">
+    <namespace name="{$ns-prefix}"
+               select="$ns" />
+
     <for-each select="$params">
       <xsl:variable name="i"
                     select="position()" />
diff --git a/test/transform/apply-gen-test-in.xsl b/test/transform/apply-gen-test-in.xsl
index 7bde386..72a64af 100644
--- a/test/transform/apply-gen-test-in.xsl
+++ b/test/transform/apply-gen-test-in.xsl
@@ -32,5 +32,13 @@
 
     <sequence select="$x + $y" />
   </function>
-</stylesheet>
 
+
+  <!-- make sure multiple functions are properly handled -->
+  <function name="foo:sub-two" as="xs:decimal">
+    <param name="x" as="xs:decimal" />
+    <param name="y" as="xs:decimal" />
+
+    <sequence select="$x - $y" />
+  </function>
+</stylesheet>
diff --git a/test/transform/apply-gen-test.xsl b/test/transform/apply-gen-test.xsl
index 3241470..ecf6c15 100644
--- a/test/transform/apply-gen-test.xsl
+++ b/test/transform/apply-gen-test.xsl
@@ -41,12 +41,24 @@
   <function name="foo:apply-add-two">
     <param name="x" as="xs:decimal" />
     <param name="y" as="xs:decimal" />
-    
+
     <apply-templates select="foo:add-two()"
                      mode="f:apply">
       <with-param name="arg1" select="$x" />
       <with-param name="arg2" select="$y" />
     </apply-templates>
   </function>
+
+
+  <function name="foo:apply-sub-two">
+    <param name="x" as="xs:decimal" />
+    <param name="y" as="xs:decimal" />
+
+    <apply-templates select="foo:sub-two()"
+                     mode="f:apply">
+      <with-param name="arg1" select="$x" />
+      <with-param name="arg2" select="$y" />
+    </apply-templates>
+  </function>
 </stylesheet>
 
diff --git a/test/transform/apply-gen.xspec b/test/transform/apply-gen.xspec
index 888dabe..5409e87 100644
--- a/test/transform/apply-gen.xspec
+++ b/test/transform/apply-gen.xspec
@@ -165,5 +165,17 @@
 
     <expect label="applying template to nullary yields proper result"
             test="$x:result = 5" />
+
+
+    <!-- ensure that multiple functions are processed -->
+    <scenario label="with multiple functions">
+      <call function="foo:apply-sub-two">
+        <param name="x" select="2" />
+        <param name="y" select="3" />
+      </call>
+
+      <expect label="applying template to nullary yields proper result"
+              test="$x:result = -1" />
+    </scenario>
   </scenario>
 </description>