diff --git a/internal/compiler/compiler.go b/internal/compiler/compiler.go
index db5ed41..6e13b66 100644
--- a/internal/compiler/compiler.go
+++ b/internal/compiler/compiler.go
@@ -129,10 +129,18 @@ func (c *Compiler) Compile(lines []preproc.Line) ([]string, error) {
 		return nil, fmt.Errorf("Unclosed SCRIPT block.")
 	}
 
+	// Analyze for overlapping absolute addresses in function call chains
+	c.checkAbsoluteOverlaps()
+
 	// Assemble final output with headers and footers
 	return c.assembleOutput(codeOutput), nil
 }
 
+// checkAbsoluteOverlaps analyzes and warns about overlapping absolute addresses
+func (c *Compiler) checkAbsoluteOverlaps() {
+	c.ctx.FunctionHandler.ReportAbsoluteOverlaps()
+}
+
 // assembleOutput combines all generated sections into final assembly
 func (c *Compiler) assembleOutput(codeLines []string) []string {
 	var output []string
diff --git a/internal/compiler/context.go b/internal/compiler/context.go
index 0b489fe..86046a9 100644
--- a/internal/compiler/context.go
+++ b/internal/compiler/context.go
@@ -50,6 +50,9 @@ func NewCompilerContext(pragma *preproc.Pragma) *CompilerContext {
 	// FunctionHandler needs references to other components
 	ctx.FunctionHandler = NewFunctionHandler(symTable, generalStack, constStrHandler, pragma)
 
+	// Connect SymbolTable to FunctionHandler for absolute variable notifications
+	symTable.SetFunctionHandler(ctx.FunctionHandler)
+
 	return ctx
 }
 
diff --git a/internal/compiler/funchandler.go b/internal/compiler/funchandler.go
index 377d72e..8910098 100644
--- a/internal/compiler/funchandler.go
+++ b/internal/compiler/funchandler.go
@@ -2,6 +2,8 @@ package compiler
 
 import (
 	"fmt"
+	"os"
+	"sort"
 	"strings"
 
 	"c65gm/internal/preproc"
@@ -40,6 +42,10 @@ type FunctionHandler struct {
 	labelStack      *LabelStack
 	constStrHandler *ConstantStringHandler
 	pragma          *preproc.Pragma
+
+	// Absolute address tracking for overlap detection
+	absoluteAddrs map[string]map[uint16]bool // funcName -> set of absolute addresses used
+	callGraph     map[string][]string        // funcName -> list of functions it calls
 }
 
 // NewFunctionHandler creates a new function handler
@@ -51,6 +57,8 @@ func NewFunctionHandler(st *SymbolTable, ls *LabelStack, csh *ConstantStringHand
 		labelStack:      ls,
 		constStrHandler: csh,
 		pragma:          pragma,
+		absoluteAddrs:   make(map[string]map[uint16]bool),
+		callGraph:       make(map[string][]string),
 	}
 }
 
@@ -150,10 +158,51 @@ func (fh *FunctionHandler) HandleFuncDecl(line preproc.Line) ([]string, error) {
 		Params: funcParams,
 	})
 
+	// Record absolute addresses used by this function
+	fh.recordAbsoluteAddresses(funcName, funcParams)
+
 	// Generate assembler label
 	return []string{funcName}, nil
 }
 
+// recordAbsoluteAddresses stores which absolute addresses a function uses
+func (fh *FunctionHandler) recordAbsoluteAddresses(funcName string, params []*FuncParam) {
+	addrSet := make(map[uint16]bool)
+
+	for _, param := range params {
+		if param.Symbol.IsAbsolute() {
+			addr := param.Symbol.AbsAddr
+			// Mark address as used
+			addrSet[addr] = true
+			// If it's a word, also mark the next byte
+			if param.Symbol.IsWord() {
+				addrSet[addr+1] = true
+			}
+		}
+	}
+
+	// Only store if function uses absolute addresses
+	if len(addrSet) > 0 {
+		fh.absoluteAddrs[funcName] = addrSet
+	}
+}
+
+// RecordAbsoluteVar is called by SymbolTable when an absolute variable is added to a function scope
+func (fh *FunctionHandler) RecordAbsoluteVar(funcScope string, addr uint16, isWord bool) {
+	if funcScope == "" {
+		return // global variable, skip
+	}
+
+	if fh.absoluteAddrs[funcScope] == nil {
+		fh.absoluteAddrs[funcScope] = make(map[uint16]bool)
+	}
+
+	fh.absoluteAddrs[funcScope][addr] = true
+	if isWord {
+		fh.absoluteAddrs[funcScope][addr+1] = true
+	}
+}
+
 // buildComplexParams handles parameter lists that may contain {BYTE x} style declarations
 // Tokens like {BYTE x} are spread across multiple tokens and need to be reassembled
 func buildComplexParams(tokens []string) ([]string, error) {
@@ -332,6 +381,9 @@ func (fh *FunctionHandler) HandleFuncCall(line preproc.Line) ([]string, error) {
 		}
 	}
 
+	// Record the call in the call graph
+	fh.recordCall(funcName)
+
 	// Generate final assembly
 	asmLines = append(asmLines, inAssigns...)
 	asmLines = append(asmLines, fmt.Sprintf("  jsr %s", funcName))
@@ -340,6 +392,31 @@ func (fh *FunctionHandler) HandleFuncCall(line preproc.Line) ([]string, error) {
 	return asmLines, nil
 }
 
+// recordCall tracks which function calls which
+func (fh *FunctionHandler) recordCall(calledFunc string) {
+	// Get current function (caller)
+	if len(fh.currentFuncs) == 0 {
+		// Call from global scope - not inside a function
+		return
+	}
+
+	caller := fh.currentFuncs[len(fh.currentFuncs)-1]
+
+	// Add to call graph
+	if fh.callGraph[caller] == nil {
+		fh.callGraph[caller] = []string{}
+	}
+
+	// Avoid duplicates (though they're harmless for our analysis)
+	for _, existing := range fh.callGraph[caller] {
+		if existing == calledFunc {
+			return
+		}
+	}
+
+	fh.callGraph[caller] = append(fh.callGraph[caller], calledFunc)
+}
+
 // processLabelArg handles @label arguments
 func (fh *FunctionHandler) processLabelArg(arg string, param *FuncParam, funcName string, line preproc.Line, inAssigns *[]string) error {
 	labelName := arg[1:] // strip @
@@ -768,3 +845,165 @@ func parseParamSpec(spec string) (ParamDirection, string, bool, string, error) {
 
 	return direction, varName, isImplicit, implicitDecl, nil
 }
+
+// AbsoluteOverlap represents a detected overlap in absolute addresses
+type AbsoluteOverlap struct {
+	Func1      string   // First function using the address
+	Func2      string   // Second function using the address
+	Address    uint16   // Overlapping address
+	CallChain  []string // Call chain from Func1 to Func2
+}
+
+// AnalyzeAbsoluteOverlaps checks for overlapping absolute addresses in call chains
+func (fh *FunctionHandler) AnalyzeAbsoluteOverlaps() []AbsoluteOverlap {
+	// Use map to deduplicate: key is "func1:func2:addr", value is overlap with shortest chain
+	seen := make(map[string]*AbsoluteOverlap)
+
+	// For each function that uses absolute addresses
+	for funcName, addrSet := range fh.absoluteAddrs {
+		// Get all functions transitively called by this function
+		transitiveAddrs := fh.getTransitiveAddresses(funcName, make(map[string]bool))
+
+		// Check for overlaps
+		for addr := range addrSet {
+			for otherFunc, otherAddrs := range transitiveAddrs {
+				if otherAddrs[addr] {
+					// Found overlap!
+					callChain := fh.findCallChain(funcName, otherFunc)
+
+					// Create unique key for this conflict
+					key := fmt.Sprintf("%s:%s:%04x", funcName, otherFunc, addr)
+
+					// Keep only if this is the first occurrence or has shorter chain
+					if existing, exists := seen[key]; !exists || len(callChain) < len(existing.CallChain) {
+						seen[key] = &AbsoluteOverlap{
+							Func1:     funcName,
+							Func2:     otherFunc,
+							Address:   addr,
+							CallChain: callChain,
+						}
+					}
+				}
+			}
+		}
+	}
+
+	// Convert map to slice
+	var overlaps []AbsoluteOverlap
+	for _, overlap := range seen {
+		overlaps = append(overlaps, *overlap)
+	}
+
+	return overlaps
+}
+
+// ReportAbsoluteOverlaps analyzes and reports overlapping absolute addresses to stderr
+func (fh *FunctionHandler) ReportAbsoluteOverlaps() {
+	overlaps := fh.AnalyzeAbsoluteOverlaps()
+
+	if len(overlaps) == 0 {
+		return
+	}
+
+	// Group overlaps by address
+	byAddress := make(map[uint16]map[string]bool)
+	for _, overlap := range overlaps {
+		if byAddress[overlap.Address] == nil {
+			byAddress[overlap.Address] = make(map[string]bool)
+		}
+		byAddress[overlap.Address][overlap.Func1] = true
+		byAddress[overlap.Address][overlap.Func2] = true
+	}
+
+	// Extract and sort addresses
+	addresses := make([]uint16, 0, len(byAddress))
+	for addr := range byAddress {
+		addresses = append(addresses, addr)
+	}
+	sort.Slice(addresses, func(i, j int) bool {
+		return addresses[i] < addresses[j]
+	})
+
+	_, _ = fmt.Fprintf(os.Stderr, "\nWarning: Detected overlapping absolute addresses in function call chains:\n\n")
+
+	// Report each address with its conflicting functions (in sorted order)
+	for _, addr := range addresses {
+		funcs := byAddress[addr]
+		funcList := make([]string, 0, len(funcs))
+		for f := range funcs {
+			funcList = append(funcList, f)
+		}
+
+		_, _ = fmt.Fprintf(os.Stderr, "  Address $%04X used by: %s\n", addr, strings.Join(funcList, ", "))
+		_, _ = fmt.Fprintf(os.Stderr, "    %d function(s) share this address in overlapping call chains\n\n", len(funcList))
+	}
+
+	_, _ = fmt.Fprintf(os.Stderr, "  These conflicts may cause data corruption when functions are active simultaneously.\n\n")
+}
+
+// getTransitiveAddresses returns all addresses used by transitively called functions
+// Returns map: funcName -> set of addresses used by that function
+func (fh *FunctionHandler) getTransitiveAddresses(funcName string, visited map[string]bool) map[string]map[uint16]bool {
+	result := make(map[string]map[uint16]bool)
+
+	// Avoid infinite recursion
+	if visited[funcName] {
+		return result
+	}
+	visited[funcName] = true
+
+	// Get functions directly called by this function
+	for _, calledFunc := range fh.callGraph[funcName] {
+		// Add addresses used by the called function
+		if addrs, exists := fh.absoluteAddrs[calledFunc]; exists {
+			result[calledFunc] = addrs
+		}
+
+		// Recursively get addresses from transitively called functions
+		transitiveAddrs := fh.getTransitiveAddresses(calledFunc, visited)
+		for f, addrs := range transitiveAddrs {
+			result[f] = addrs
+		}
+	}
+
+	return result
+}
+
+// findCallChain finds the call path from funcA to funcB
+func (fh *FunctionHandler) findCallChain(from, to string) []string {
+	// BFS to find shortest path
+	type node struct {
+		funcName string
+		path     []string
+	}
+
+	queue := []node{{funcName: from, path: []string{from}}}
+	visited := make(map[string]bool)
+
+	for len(queue) > 0 {
+		current := queue[0]
+		queue = queue[1:]
+
+		if visited[current.funcName] {
+			continue
+		}
+		visited[current.funcName] = true
+
+		if current.funcName == to {
+			return current.path
+		}
+
+		// Explore called functions
+		for _, calledFunc := range fh.callGraph[current.funcName] {
+			if !visited[calledFunc] {
+				newPath := make([]string, len(current.path)+1)
+				copy(newPath, current.path)
+				newPath[len(current.path)] = calledFunc
+				queue = append(queue, node{funcName: calledFunc, path: newPath})
+			}
+		}
+	}
+
+	// No path found (shouldn't happen if overlap detected correctly)
+	return []string{from, to}
+}
diff --git a/internal/compiler/funchandler_test.go b/internal/compiler/funchandler_test.go
index 0b78536..ea2f3a2 100644
--- a/internal/compiler/funchandler_test.go
+++ b/internal/compiler/funchandler_test.go
@@ -1,6 +1,7 @@
 package compiler
 
 import (
+	"fmt"
 	"strings"
 	"testing"
 
@@ -1074,3 +1075,340 @@ func TestParseImplicitDecl_Absolute(t *testing.T) {
 		})
 	}
 }
+
+func TestAbsoluteOverlapDetection(t *testing.T) {
+	tests := []struct {
+		name            string
+		code            string
+		wantOverlapAddr uint16
+		wantFunc1       string
+		wantFunc2       string
+	}{
+		{
+			name: "direct call with overlap",
+			code: `
+BYTE dummy
+FUNC funcB ( {BYTE data @ $fa} )
+FEND
+
+FUNC funcA ( {BYTE temp @ $fa} )
+  CALL funcB(dummy)
+FEND
+`,
+			wantOverlapAddr: 0xFA,
+			wantFunc1:       "funcA",
+			wantFunc2:       "funcB",
+		},
+		{
+			name: "transitive call with overlap",
+			code: `
+BYTE dummy
+FUNC funcC ( {BYTE data @ $fa} )
+FEND
+
+FUNC funcB
+  CALL funcC(dummy)
+FEND
+
+FUNC funcA ( {BYTE temp @ $fa} )
+  CALL funcB()
+FEND
+`,
+			wantOverlapAddr: 0xFA,
+			wantFunc1:       "funcA",
+			wantFunc2:       "funcC",
+		},
+		{
+			name: "word overlap with byte",
+			code: `
+BYTE dummy
+FUNC funcB ( {BYTE data @ $fb} )
+FEND
+
+FUNC funcA ( {WORD value @ $fa} )
+  CALL funcB(dummy)
+FEND
+`,
+			wantOverlapAddr: 0xFB,
+			wantFunc1:       "funcA",
+			wantFunc2:       "funcB",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			st := NewSymbolTable()
+			ls := NewLabelStack("L")
+			csh := NewConstantStringHandler()
+			pragma := preproc.NewPragma()
+			fh := NewFunctionHandler(st, ls, csh, pragma)
+
+			// Parse code into lines
+			lines := strings.Split(strings.TrimSpace(tt.code), "\n")
+
+			// Process each line
+			for i, lineText := range lines {
+				lineText = strings.TrimSpace(lineText)
+				if lineText == "" {
+					continue
+				}
+
+				pline := preproc.Line{
+					Text:     lineText,
+					LineNo:   i + 1,
+					Filename: "test.c65",
+				}
+
+				if strings.HasPrefix(lineText, "BYTE ") || strings.HasPrefix(lineText, "WORD ") {
+					// Variable declaration - add to symbol table
+					parts := strings.Fields(lineText)
+					if len(parts) >= 2 {
+						varKind := KindByte
+						if strings.ToUpper(parts[0]) == "WORD" {
+							varKind = KindWord
+						}
+						st.AddVar(parts[1], "", varKind, 0)
+					}
+				} else if strings.HasPrefix(lineText, "FUNC ") {
+					_, err := fh.HandleFuncDecl(pline)
+					if err != nil {
+						t.Fatalf("HandleFuncDecl failed: %v", err)
+					}
+				} else if strings.HasPrefix(lineText, "CALL ") {
+					_, err := fh.HandleFuncCall(pline)
+					if err != nil {
+						t.Fatalf("HandleFuncCall failed: %v", err)
+					}
+				} else if lineText == "FEND" {
+					fh.EndFunction()
+				}
+			}
+
+			// Analyze overlaps
+			overlaps := fh.AnalyzeAbsoluteOverlaps()
+
+			if len(overlaps) == 0 {
+				t.Fatalf("Expected overlap at address $%04X, but none detected", tt.wantOverlapAddr)
+			}
+
+			// Find the expected overlap
+			found := false
+			for _, overlap := range overlaps {
+				if overlap.Address == tt.wantOverlapAddr &&
+					overlap.Func1 == tt.wantFunc1 &&
+					overlap.Func2 == tt.wantFunc2 {
+					found = true
+					break
+				}
+			}
+
+			if !found {
+				t.Errorf("Expected overlap at $%04X between %s and %s, got: %+v",
+					tt.wantOverlapAddr, tt.wantFunc1, tt.wantFunc2, overlaps)
+			}
+		})
+	}
+}
+
+func TestAbsoluteLocalVariables(t *testing.T) {
+	tests := []struct {
+		name            string
+		code            string
+		wantOverlapAddr uint16
+		wantFunc1       string
+		wantFunc2       string
+	}{
+		{
+			name: "local absolute variables overlap",
+			code: `
+FUNC funcB
+  BYTE localB @ $fa
+FEND
+
+FUNC funcA
+  BYTE localA @ $fa
+  CALL funcB()
+FEND
+`,
+			wantOverlapAddr: 0xFA,
+			wantFunc1:       "funcA",
+			wantFunc2:       "funcB",
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			st := NewSymbolTable()
+			ls := NewLabelStack("L")
+			csh := NewConstantStringHandler()
+			pragma := preproc.NewPragma()
+			fh := NewFunctionHandler(st, ls, csh, pragma)
+
+			// Connect symbol table to function handler
+			st.SetFunctionHandler(fh)
+
+			// Parse code into lines
+			lines := strings.Split(strings.TrimSpace(tt.code), "\n")
+			currentFunc := ""
+
+			// Process each line
+			for i, lineText := range lines {
+				lineText = strings.TrimSpace(lineText)
+				if lineText == "" {
+					continue
+				}
+
+				pline := preproc.Line{
+					Text:     lineText,
+					LineNo:   i + 1,
+					Filename: "test.c65",
+				}
+
+				if strings.HasPrefix(lineText, "BYTE ") || strings.HasPrefix(lineText, "WORD ") {
+					// Parse variable declaration
+					parts := strings.Fields(lineText)
+					if len(parts) >= 4 && parts[2] == "@" {
+						// Absolute variable: BYTE name @ $addr
+						varKind := KindByte
+						if strings.ToUpper(parts[0]) == "WORD" {
+							varKind = KindWord
+						}
+						addrStr := strings.TrimPrefix(parts[3], "$")
+						var addr uint16
+						fmt.Sscanf(addrStr, "%x", &addr)
+						st.AddAbsolute(parts[1], currentFunc, varKind, addr)
+					}
+				} else if strings.HasPrefix(lineText, "FUNC ") {
+					_, err := fh.HandleFuncDecl(pline)
+					if err != nil {
+						t.Fatalf("HandleFuncDecl failed: %v", err)
+					}
+					// Extract function name
+					funcParts := strings.Fields(lineText)
+					if len(funcParts) >= 2 {
+						currentFunc = funcParts[1]
+					}
+				} else if strings.HasPrefix(lineText, "CALL ") {
+					_, err := fh.HandleFuncCall(pline)
+					if err != nil {
+						t.Fatalf("HandleFuncCall failed: %v", err)
+					}
+				} else if lineText == "FEND" {
+					fh.EndFunction()
+					currentFunc = ""
+				}
+			}
+
+			// Analyze overlaps
+			overlaps := fh.AnalyzeAbsoluteOverlaps()
+
+			if len(overlaps) == 0 {
+				t.Fatalf("Expected overlap at address $%04X, but none detected", tt.wantOverlapAddr)
+			}
+
+			// Find the expected overlap
+			found := false
+			for _, overlap := range overlaps {
+				if overlap.Address == tt.wantOverlapAddr &&
+					overlap.Func1 == tt.wantFunc1 &&
+					overlap.Func2 == tt.wantFunc2 {
+					found = true
+					break
+				}
+			}
+
+			if !found {
+				t.Errorf("Expected overlap at $%04X between %s and %s, got: %+v",
+					tt.wantOverlapAddr, tt.wantFunc1, tt.wantFunc2, overlaps)
+			}
+		})
+	}
+}
+
+func TestAbsoluteNoOverlap(t *testing.T) {
+	tests := []struct {
+		name string
+		code string
+	}{
+		{
+			name: "different addresses",
+			code: `
+BYTE dummy
+FUNC funcB ( {BYTE data @ $fb} )
+FEND
+
+FUNC funcA ( {BYTE temp @ $fa} )
+  CALL funcB(dummy)
+FEND
+`,
+		},
+		{
+			name: "no call relationship",
+			code: `
+FUNC funcA ( {BYTE temp @ $fa} )
+FEND
+
+FUNC funcB ( {BYTE data @ $fa} )
+FEND
+`,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			st := NewSymbolTable()
+			ls := NewLabelStack("L")
+			csh := NewConstantStringHandler()
+			pragma := preproc.NewPragma()
+			fh := NewFunctionHandler(st, ls, csh, pragma)
+
+			// Parse code into lines
+			lines := strings.Split(strings.TrimSpace(tt.code), "\n")
+
+			// Process each line
+			for i, lineText := range lines {
+				lineText = strings.TrimSpace(lineText)
+				if lineText == "" {
+					continue
+				}
+
+				pline := preproc.Line{
+					Text:     lineText,
+					LineNo:   i + 1,
+					Filename: "test.c65",
+				}
+
+				if strings.HasPrefix(lineText, "BYTE ") || strings.HasPrefix(lineText, "WORD ") {
+					// Variable declaration - add to symbol table
+					parts := strings.Fields(lineText)
+					if len(parts) >= 2 {
+						varKind := KindByte
+						if strings.ToUpper(parts[0]) == "WORD" {
+							varKind = KindWord
+						}
+						st.AddVar(parts[1], "", varKind, 0)
+					}
+				} else if strings.HasPrefix(lineText, "FUNC ") {
+					_, err := fh.HandleFuncDecl(pline)
+					if err != nil {
+						t.Fatalf("HandleFuncDecl failed: %v", err)
+					}
+				} else if strings.HasPrefix(lineText, "CALL ") {
+					_, err := fh.HandleFuncCall(pline)
+					if err != nil {
+						t.Fatalf("HandleFuncCall failed: %v", err)
+					}
+				} else if lineText == "FEND" {
+					fh.EndFunction()
+				}
+			}
+
+			// Analyze overlaps
+			overlaps := fh.AnalyzeAbsoluteOverlaps()
+
+			if len(overlaps) > 0 {
+				t.Errorf("Expected no overlaps, but got: %+v", overlaps)
+			}
+		})
+	}
+}
diff --git a/internal/compiler/symboltable.go b/internal/compiler/symboltable.go
index 494ab8b..f1bc7d1 100644
--- a/internal/compiler/symboltable.go
+++ b/internal/compiler/symboltable.go
@@ -62,9 +62,16 @@ func (s *Symbol) FullName() string {
 
 // SymbolTable manages variable and constant declarations
 type SymbolTable struct {
-	symbols    []*Symbol                     // insertion order
-	byFullName map[string]*Symbol            // fullname -> symbol
-	byScope    map[string]map[string]*Symbol // scope -> name -> symbol
+	symbols     []*Symbol                     // insertion order
+	byFullName  map[string]*Symbol            // fullname -> symbol
+	byScope     map[string]map[string]*Symbol // scope -> name -> symbol
+	funcHandler FunctionHandlerInterface      // for notifying about absolute variables in functions
+}
+
+// FunctionHandlerInterface allows SymbolTable to notify about absolute variables
+// without creating a circular dependency
+type FunctionHandlerInterface interface {
+	RecordAbsoluteVar(funcScope string, addr uint16, isWord bool)
 }
 
 // NewSymbolTable creates a new symbol table
@@ -76,6 +83,11 @@ func NewSymbolTable() *SymbolTable {
 	}
 }
 
+// SetFunctionHandler sets the function handler for absolute variable notifications
+func (st *SymbolTable) SetFunctionHandler(fh FunctionHandlerInterface) {
+	st.funcHandler = fh
+}
+
 // AddVar adds a regular variable (byte or word)
 func (st *SymbolTable) AddVar(name, scope string, kind VarKind, initValue uint16) error {
 	var flags SymbolFlags
@@ -149,6 +161,11 @@ func (st *SymbolTable) AddAbsolute(name, scope string, kind VarKind, addr uint16
 		return fmt.Errorf("unknown variable kind: %d", kind)
 	}
 
+	// Notify function handler about absolute variable in function scope
+	if st.funcHandler != nil && scope != "" {
+		st.funcHandler.RecordAbsoluteVar(scope, addr, kind == KindWord)
+	}
+
 	return st.add(&Symbol{
 		Name:    name,
 		Scope:   scope,