diff --git a/CHANGELOG.md b/CHANGELOG.md
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,9 @@
 # Changelog for the [`clash-lib`](http://hackage.haskell.org/package/clash-lib) package
 
+## 0.6.13 *March 14th 2016*
+* Fixes bugs:
+  * Not all lambda's in a function position removed
+
 ## 0.6.12 *March 14th 2016*
 * Fixes bugs:
   * Not all lambda's in a function position removed due to bad eta-expansion [#132](https://github.com/clash-lang/clash-compiler/issues/132)
diff --git a/clash-lib.cabal b/clash-lib.cabal
--- a/clash-lib.cabal
+++ b/clash-lib.cabal
@@ -1,5 +1,5 @@
 Name:                 clash-lib
-Version:              0.6.12
+Version:              0.6.13
 Synopsis:             CAES Language for Synchronous Hardware - As a Library
 Description:
   CλaSH (pronounced ‘clash’) is a functional hardware description language that
diff --git a/src/CLaSH/Normalize/Strategy.hs b/src/CLaSH/Normalize/Strategy.hs
--- a/src/CLaSH/Normalize/Strategy.hs
+++ b/src/CLaSH/Normalize/Strategy.hs
@@ -19,7 +19,7 @@
 normalization = constantPropgation >-> etaTL >-> rmUnusedExpr >-!-> anf >-!-> rmDeadcode >->
                 bindConst >-> letTL >-> evalConst >-!-> cse >-!-> recLetRec
   where
-    etaTL      = apply "etaTL" etaExpansionTL
+    etaTL      = apply "etaTL" etaExpansionTL !-> repeatR (innerMost (apply "applicationPropagation" appProp))
     anf        = topdownR (apply "nonRepANF" nonRepANF) >-> apply "ANF" makeANF
     letTL      = topdownSucR (apply "topLet" topLet)
     recLetRec  = apply "recToLetRec" recToLetRec