diff --git a/docs/CHANGELOG.md b/docs/CHANGELOG.md
index eb8011c7a..62a8b6051 100644
--- a/docs/CHANGELOG.md
+++ b/docs/CHANGELOG.md
@@ -9,6 +9,8 @@ Jupytext ChangeLog
 
 **Fixed**
 - Dependencies of the JupyterLab extension have been upgraded to fix a security vulnerability ([#783](https://github.com/mwouts/jupytext/issues/783))
+- Variables assigned from a magic command are commented out in `py` scripts ([#781](https://github.com/mwouts/jupytext/issues/781))
+
 
 1.11.2 (2021-05-02)
 -------------------
diff --git a/jupytext/magics.py b/jupytext/magics.py
index b8c0173d1..be0e5381b 100644
--- a/jupytext/magics.py
+++ b/jupytext/magics.py
@@ -58,6 +58,10 @@
 # Python help commands end with ?
 _IPYTHON_MAGIC_HELP = re.compile(r"^\s*(# )*[^\s]*\?\s*$")
 
+_PYTHON_MAGIC_ASSIGN = re.compile(
+    r"^(# |#)*\s*([a-zA-Z_][a-zA-Z_$0-9]*)\s*=\s*(%|%%|%%%)[a-zA-Z](.*)"
+)
+
 _SCRIPT_LANGUAGES = [_SCRIPT_EXTENSIONS[ext]["language"] for ext in _SCRIPT_EXTENSIONS]
 
 
@@ -76,6 +80,8 @@ def is_magic(line, language, global_escape_flag=True, explicitly_code=False):
         return False
     if _PYTHON_HELP_OR_BASH_CMD.match(line):
         return True
+    if _PYTHON_MAGIC_ASSIGN.match(line):
+        return True
     if explicitly_code and _IPYTHON_MAGIC_HELP.match(line):
         return True
     return _PYTHON_MAGIC_CMD.match(line)
diff --git a/tests/test_escape_magics.py b/tests/test_escape_magics.py
index 8507adc5f..f72627cba 100644
--- a/tests/test_escape_magics.py
+++ b/tests/test_escape_magics.py
@@ -3,7 +3,13 @@
 
 import jupytext
 from jupytext.compare import compare, compare_notebooks
-from jupytext.magics import comment_magic, is_magic, uncomment_magic, unesc
+from jupytext.magics import (
+    _PYTHON_MAGIC_ASSIGN,
+    comment_magic,
+    is_magic,
+    uncomment_magic,
+    unesc,
+)
 
 from .utils import notebook_model
 
@@ -276,3 +282,11 @@ def test_indented_magic():
     assert uncomment_magic(["    # !rm file"]) == ["    !rm file"]
     assert comment_magic(["    %cd"]) == ["    # %cd"]
     assert uncomment_magic(["    # %cd"]) == ["    %cd"]
+
+
+def test_magic_assign_781():
+    assert _PYTHON_MAGIC_ASSIGN.match("name = %magic")
+    assert _PYTHON_MAGIC_ASSIGN.match("# name = %magic")
+    assert not _PYTHON_MAGIC_ASSIGN.match("# not a name = %magic")
+    assert not _PYTHON_MAGIC_ASSIGN.match("# 0name = %magic")
+    assert is_magic("result = %sql SELECT * FROM quickdemo WHERE value > 25", "python")