Industry’s demand for flexible embedded solutions providing high performance and short time-to-market has led to the development of configurable and extensible processors. These pre-verified application-specific processors build on proven baseline cores while allowing for some degree of customization through userdefined instruction set extensions (ISE) implemented as functional units in an extended micro-architecture. The traditional design flow for ISE is based on plain C sources of the target application and, after some ISE identification and synthesis stages, a modified source file is produced with explicit handles to the new machine instructions. Further code optimization is left to the compiler. In this paper we develop a novel approach, namely the combined exploration of source-level transformations and ISE identification. We have combined automated code transformation and ISE generators to explore the potential benefits of such a combination. This applies up to 50 ...