diff --git a/src/build.mjs b/src/build.mjs
index c83f181..05e63fc 100644
--- a/src/build.mjs
+++ b/src/build.mjs
@@ -82,8 +82,8 @@ export const evaluate = (h, built, fields, args) => {
 	for (let i = 1; i < built.length; i++) {
 		const type = built[i++];
 
-		// Set `built[0]` to truthy if this element depends on a dynamic value.
-		const value = built[i] ? fields[built[0] = built[i++]] : built[++i];
+		// Set `built[0]`'s appropriate bits if this element depends on a dynamic value.
+		const value = built[i] ? ((built[0] |= type ? 1 : 2), fields[built[i++]]) : built[++i];
 
 		if (type === TAG_SET) {
 			args[0] = value;
@@ -97,14 +97,15 @@ export const evaluate = (h, built, fields, args) => {
 		else if (type === PROP_APPEND) {
 			args[1][built[++i]] += (value + '');
 		}
-		else if (type) {
-			// type === CHILD_RECURSE
-			tmp = h.apply(0, evaluate(h, value, fields, ['', null]));
+		else if (type) { // type === CHILD_RECURSE
+			// Set the operation list (including the staticness bits) as
+			// `this` for the `h` call.
+			tmp = h.apply(value, evaluate(h, value, fields, ['', null]));
 			args.push(tmp);
 
 			if (value[0]) {
-				// If the child element is dynamic, then so is the current element.
-				built[0] = 1;
+				// Set the 2nd lowest bit it the child element is dynamic.
+				built[0] |= 2;
 			}
 			else {
 				// Rewrite the operation list in-place if the child element is static.
@@ -116,8 +117,7 @@ export const evaluate = (h, built, fields, args) => {
 				built[i] = tmp;
 			}
 		}
-		else {
-			// type === CHILD_APPEND
+		else { // type === CHILD_APPEND
 			args.push(value);
 		}
 	}
diff --git a/test/statics-caching.test.mjs b/test/statics-caching.test.mjs
index 68641f7..11c9820 100644
--- a/test/statics-caching.test.mjs
+++ b/test/statics-caching.test.mjs
@@ -36,4 +36,57 @@ describe('htm', () => {
 		expect(a).toBe(1);
 		expect(b).toBe(2);
 	});
+
+	describe('`this` in the h function', () => {
+		const html = htm.bind(function() {
+			return this;
+		});
+
+		test('stays the same for each call site)', () => {
+			const x = () => html`<div>a</div>`;
+			const a = x();
+			const b = x();
+			expect(a).toBe(b);
+		});
+
+		test('is different for each call site', () => {
+			const a = html`<div>a</div>`;
+			const b = html`<div>a</div>`;
+			expect(a).not.toBe(b);
+		});
+
+		test('is specific to each h function', () => {
+			let tmp = htm.bind(function() { return this; });
+			const x = () => tmp`<div>a</div>`;
+			const a = x();
+			tmp = htm.bind(function() { return this; });
+			const b = x();
+			expect(a).not.toBe(b);
+		});
+	});
+
+	describe('`this[0]` in the h function contains the staticness bits', () => {
+		const html = htm.bind(function() {
+			return this[0];
+		});
+
+		test('should be 0 for static subtrees', () => {
+			expect(html`<div></div>`).toBe(0);
+			expect(html`<div>a</div>`).toBe(0);
+			expect(html`<div><a /></div>`).toBe(0);
+		});
+
+		test('should be 2 for static nodes with some dynamic children', () => {
+			expect(html`<div>${'a'}<b /></div>`).toBe(2);
+			expect(html`<div><a y=${2} /><b /></div>`).toBe(2);
+		});
+
+		test('should be 1 for dynamic nodes with all static children', () => {
+			expect(html`<div x=${1}><a /><b /></div>`).toBe(1);
+		});
+
+		test('should be 3 for dynamic nodes with some dynamic children', () => {
+			expect(html`<div x=${1}><a y=${2} /><b /></div>`).toBe(3);
+		});
+	});
 });