diff --git a/src/embed.ts b/src/embed.ts
index 3f99bad..35218be 100644
--- a/src/embed.ts
+++ b/src/embed.ts
@@ -2,7 +2,8 @@ import { Printer } from "prettier";
 import { Node } from "sql-parser-cst";
 import { embedJs } from "./embedJs";
 import { embedJson } from "./embedJson";
+import { embedSql } from "./embedSql";
 
 export const embed: NonNullable<Printer<Node>["embed"]> = (...args) => {
-  return embedJson(...args) || embedJs(...args);
+  return embedJson(...args) || embedJs(...args) || embedSql(...args);
 };
diff --git a/src/embedSql.ts b/src/embedSql.ts
new file mode 100644
index 0000000..5fe67d2
--- /dev/null
+++ b/src/embedSql.ts
@@ -0,0 +1,67 @@
+import { Printer } from "prettier";
+import {
+  CreateFunctionStmt,
+  CreateProcedureStmt,
+  Node,
+  StringLiteral
+} from "sql-parser-cst";
+import {
+  isAsClause,
+  isCreateFunctionStmt,
+  isCreateProcedureStmt,
+  isLanguageClause,
+  isStringLiteral,
+} from "./node_utils";
+import { hardline, indent, stripTrailingHardline } from "./print_utils";
+
+export const embedSql: NonNullable<Printer<Node>["embed"]> = (path, options) => {
+  const node = path.node;
+  const parent = path.getParentNode(0);
+  const grandParent = path.getParentNode(1);
+
+  if (
+    isStringLiteral(node) &&
+    isAsClause(parent) &&
+    (isCreateFunctionStmt(grandParent) || isCreateProcedureStmt(grandParent)) &&
+    grandParent.clauses.some(isSqlLanguageClause)
+  ) {
+    return async (textToDoc) => {
+      let quote = detectQuote(node);
+
+      if (!quote) {
+        return;
+      }
+
+      if (quote === "'") {
+        // Convert `'` quotes to `$$` to simplify handling of strings inside the
+        // function. But bail out if the function contains dollar-quoted strings.
+        if (node.value.includes("$$")) {
+          return;
+        }
+        quote = "$$";
+      }
+
+      const sql = await textToDoc(node.value, options);
+
+      return [
+        quote,
+        indent([hardline, stripTrailingHardline(sql)]),
+        hardline,
+        quote,
+      ];
+    };
+  }
+
+  return null;
+};
+
+const isSqlLanguageClause = (
+  clause: CreateFunctionStmt["clauses"][0] | CreateProcedureStmt['clauses'][0],
+): boolean => isLanguageClause(clause) && clause.name.name.toLowerCase() === "sql";
+
+const detectQuote = (
+  node: StringLiteral,
+): string | undefined => {
+  const match = node.text.match(/^('|\$[^$]*\$)/);
+  return match?.[1];
+};
diff --git a/test/ddl/function.test.ts b/test/ddl/function.test.ts
index b5d8abc..e44d6f6 100644
--- a/test/ddl/function.test.ts
+++ b/test/ddl/function.test.ts
@@ -202,6 +202,101 @@ describe("function", () => {
         AS " return /'''|\\"\\"\\"/.test(x) "
       `);
     });
+
+    it(`formats dollar-quoted SQL function`, async () => {
+      await testPostgresql(dedent`
+        CREATE FUNCTION my_func()
+        RETURNS INT64
+        LANGUAGE sql
+        AS $$
+          SELECT 1;
+        $$
+      `);
+    });
+
+    it(`reformats SQL in dollar-quoted SQL function`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE FUNCTION my_func()
+            RETURNS INT64
+            LANGUAGE sql
+            AS $body$SELECT 1;
+            select 2$body$
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE FUNCTION my_func()
+        RETURNS INT64
+        LANGUAGE sql
+        AS $body$
+          SELECT 1;
+          SELECT 2;
+        $body$
+      `);
+    });
+
+    it(`converts single-quoted SQL functions to dollar-quoted SQL functions`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE FUNCTION my_func()
+            RETURNS TEXT
+            LANGUAGE sql
+            AS 'SELECT ''foo'''
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE FUNCTION my_func()
+        RETURNS TEXT
+        LANGUAGE sql
+        AS $$
+          SELECT 'foo';
+        $$
+      `);
+    });
+
+    it(`does not convert single-quoted SQL functions to dollar-quoted SQL functions when they contain dollar-quoted strings`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE FUNCTION my_func()
+            RETURNS TEXT
+            LANGUAGE sql
+            AS 'SELECT $$foo$$'
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE FUNCTION my_func()
+        RETURNS TEXT
+        LANGUAGE sql
+        AS 'SELECT $$foo$$'
+      `);
+    });
+
+    it(`handles SQL language identifier case-insensitively`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE FUNCTION my_func()
+            RETURNS INT64
+            LANGUAGE Sql
+            AS 'SELECT 1'
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE FUNCTION my_func()
+        RETURNS INT64
+        LANGUAGE Sql
+        AS $$
+          SELECT 1;
+        $$
+      `);
+    });
   });
 
   describe("drop function", () => {
diff --git a/test/ddl/procedure.test.ts b/test/ddl/procedure.test.ts
index aa60597..4b99c96 100644
--- a/test/ddl/procedure.test.ts
+++ b/test/ddl/procedure.test.ts
@@ -1,5 +1,5 @@
 import dedent from "dedent-js";
-import { testBigquery, testPostgresql } from "../test_utils";
+import { pretty, testBigquery, testPostgresql } from "../test_utils";
 
 describe("procedure", () => {
   describe("create procedure", () => {
@@ -90,6 +90,92 @@ describe("procedure", () => {
         `,
       );
     });
+
+    it(`formats dollar-quoted SQL procedure`, async () => {
+      await testPostgresql(dedent`
+        CREATE PROCEDURE my_proc()
+        LANGUAGE sql
+        AS $$
+          SELECT 1;
+        $$
+      `);
+    });
+
+    it(`reformats SQL in dollar-quoted SQL procedure`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE PROCEDURE my_proc()
+            LANGUAGE sql
+            AS $body$SELECT 1;
+            select 2$body$
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE PROCEDURE my_proc()
+        LANGUAGE sql
+        AS $body$
+          SELECT 1;
+          SELECT 2;
+        $body$
+      `);
+    });
+
+    it(`converts single-quoted SQL procedures to dollar-quoted SQL procedures`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE PROCEDURE my_proc()
+            LANGUAGE sql
+            AS 'SELECT ''foo'''
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE PROCEDURE my_proc()
+        LANGUAGE sql
+        AS $$
+          SELECT 'foo';
+        $$
+      `);
+    });
+
+    it(`does not convert single-quoted SQL procedures to dollar-quoted SQL procedures when they contain dollar-quoted strings`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE PROCEDURE my_proc()
+            LANGUAGE sql
+            AS 'SELECT $$foo$$'
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE PROCEDURE my_proc()
+        LANGUAGE sql
+        AS 'SELECT $$foo$$'
+      `);
+    });
+
+    it(`handles SQL language identifier case-insensitively`, async () => {
+      expect(
+        await pretty(
+          dedent`
+            CREATE PROCEDURE my_proc()
+            LANGUAGE Sql
+            AS 'SELECT 1'
+          `,
+          { dialect: "postgresql" },
+        ),
+      ).toBe(dedent`
+        CREATE PROCEDURE my_proc()
+        LANGUAGE Sql
+        AS $$
+          SELECT 1;
+        $$
+      `);
+    });
   });
 
   describe("drop procedure", () => {