diff --git a/.changeset/fair-lemons-cross.md b/.changeset/fair-lemons-cross.md
new file mode 100644
index 0000000000..f303a99df0
--- /dev/null
+++ b/.changeset/fair-lemons-cross.md
@@ -0,0 +1,47 @@
+---
+'xstate': minor
+---
+
+Event creators can now be modeled inside of the 2nd argument of `createModel()`, and types for both `context` and `events` will be inferred properly in `createMachine()` when given the `typeof model` as the first generic parameter.
+
+```ts
+import { createModel } from 'xstate/lib/model';
+
+const userModel = createModel(
+  // initial context
+  {
+    name: 'David',
+    age: 30
+  },
+  // creators (just events for now)
+  {
+    events: {
+      updateName: (value: string) => ({ value }),
+      updateAge: (value: number) => ({ value }),
+      anotherEvent: () => ({}) // no payload
+    }
+  }
+);
+
+const machine = createMachine<typeof userModel>({
+  context: userModel.initialContext,
+  initial: 'active',
+  states: {
+    active: {
+      on: {
+        updateName: {
+          /* ... */
+        },
+        updateAge: {
+          /* ... */
+        }
+      }
+    }
+  }
+});
+
+const nextState = machine.transition(
+  undefined,
+  userModel.events.updateName('David')
+);
+```
diff --git a/packages/core/src/Machine.ts b/packages/core/src/Machine.ts
index 9b75b57ff2..47dd89cd8f 100644
--- a/packages/core/src/Machine.ts
+++ b/packages/core/src/Machine.ts
@@ -9,6 +9,7 @@ import {
   Typestate
 } from './types';
 import { StateNode } from './StateNode';
+import { Model, ModelContextFrom, ModelEventsFrom } from './model';
 
 export function Machine<
   TContext = any,
@@ -48,6 +49,23 @@ export function Machine<
   ) as StateMachine<TContext, TStateSchema, TEvent>;
 }
 
+export function createMachine<
+  TModel extends Model<any, any, any>,
+  TContext = ModelContextFrom<TModel>,
+  TEvent extends EventObject = ModelEventsFrom<TModel>,
+  TTypestate extends Typestate<TContext> = { value: any; context: TContext }
+>(
+  config: MachineConfig<TContext, any, TEvent>,
+  options?: Partial<MachineOptions<TContext, TEvent>>
+): StateMachine<TContext, any, TEvent, TTypestate>;
+export function createMachine<
+  TContext,
+  TEvent extends EventObject = AnyEventObject,
+  TTypestate extends Typestate<TContext> = { value: any; context: TContext }
+>(
+  config: MachineConfig<TContext, any, TEvent>,
+  options?: Partial<MachineOptions<TContext, TEvent>>
+): StateMachine<TContext, any, TEvent, TTypestate>;
 export function createMachine<
   TContext,
   TEvent extends EventObject = AnyEventObject,
diff --git a/packages/core/src/model.ts b/packages/core/src/model.ts
index 4a10e74f37..628a99fe1d 100644
--- a/packages/core/src/model.ts
+++ b/packages/core/src/model.ts
@@ -6,8 +6,19 @@ import type {
   ExtractEvent,
   EventObject
 } from './types';
+import { mapValues } from './utils';
 
-export interface ContextModel<TContext, TEvent extends EventObject> {
+type AnyFunction = (...args: any[]) => any;
+
+type Cast<A1 extends any, A2 extends any> = A1 extends A2 ? A1 : A2;
+type Compute<A extends any> = { [K in keyof A]: A[K] } & unknown;
+type Prop<T, K> = K extends keyof T ? T[K] : never;
+
+export interface Model<
+  TContext,
+  TEvent extends EventObject,
+  TModelCreators = never
+> {
   initialContext: TContext;
   assign: <TEventType extends TEvent['type'] = TEvent['type']>(
     assigner:
@@ -15,15 +26,87 @@ export interface ContextModel<TContext, TEvent extends EventObject> {
       | PropertyAssigner<TContext, ExtractEvent<TEvent, TEventType>>,
     eventType?: TEventType
   ) => AssignAction<TContext, ExtractEvent<TEvent, TEventType>>;
+  events: Prop<TModelCreators, 'events'>;
   reset: () => AssignAction<TContext, any>;
 }
 
+export type ModelContextFrom<
+  TModel extends Model<any, any, any>
+> = TModel extends Model<infer TContext, any, any> ? TContext : never;
+
+export type ModelEventsFrom<
+  TModel extends Model<any, any, any>
+> = TModel extends Model<any, infer TEvent, any> ? TEvent : never;
+
+type EventCreator<
+  Self extends AnyFunction,
+  Return = ReturnType<Self>
+> = Return extends object
+  ? Return extends {
+      type: any;
+    }
+    ? "An event creator can't return an object with a type property"
+    : Self
+  : 'An event creator must return an object';
+
+type EventCreators<Self> = {
+  [K in keyof Self]: Self[K] extends AnyFunction
+    ? EventCreator<Self[K]>
+    : 'An event creator must be a function';
+};
+
+type ModelCreators<Self> = {
+  events: EventCreators<Prop<Self, 'events'>>;
+};
+
+type FinalEventCreators<Self> = {
+  [K in keyof Self]: Self[K] extends AnyFunction
+    ? (
+        ...args: Parameters<Self[K]>
+      ) => Compute<ReturnType<Self[K]> & { type: K }>
+    : never;
+};
+
+type FinalModelCreators<Self> = {
+  events: FinalEventCreators<Prop<Self, 'events'>>;
+};
+
+type EventFromEventCreators<EventCreators> = {
+  [K in keyof EventCreators]: EventCreators[K] extends AnyFunction
+    ? ReturnType<EventCreators[K]>
+    : never;
+}[keyof EventCreators];
+
 export function createModel<TContext, TEvent extends EventObject>(
   initialContext: TContext
-): ContextModel<TContext, TEvent> {
-  const model: ContextModel<TContext, TEvent> = {
+): Model<TContext, TEvent, never>;
+export function createModel<
+  TContext,
+  TModelCreators extends ModelCreators<TModelCreators>,
+  TFinalModelCreators = FinalModelCreators<TModelCreators>
+>(
+  initialContext: TContext,
+  creators: TModelCreators
+): Model<
+  TContext,
+  Cast<
+    EventFromEventCreators<Prop<TFinalModelCreators, 'events'>>,
+    EventObject
+  >,
+  TFinalModelCreators
+>;
+export function createModel(initialContext: object, creators?): unknown {
+  const eventCreators = creators?.events;
+
+  const model: Model<any, any, any> = {
     initialContext,
     assign,
+    events: (eventCreators
+      ? mapValues(eventCreators, (fn, eventType) => (...args: any[]) => ({
+          ...fn(...args),
+          type: eventType
+        }))
+      : undefined) as any,
     reset: () => assign(initialContext)
   };
 
diff --git a/packages/core/test/interpreter.test.ts b/packages/core/test/interpreter.test.ts
index 84b26cc611..d737c4cfee 100644
--- a/packages/core/test/interpreter.test.ts
+++ b/packages/core/test/interpreter.test.ts
@@ -1980,9 +1980,10 @@ Event: {\\"type\\":\\"SOME_EVENT\\"}"
               NEXT: {
                 target: 'gone',
                 actions: [
-                  stop((ctx) => ctx.machineRef),
-                  stop((ctx) => ctx.promiseRef),
-                  stop((ctx) => ctx.observableRef)
+                  // TODO: type these correctly in TContext
+                  stop((ctx) => (ctx as any).machineRef),
+                  stop((ctx) => (ctx as any).promiseRef),
+                  stop((ctx) => (ctx as any).observableRef)
                 ]
               }
             }
diff --git a/packages/core/test/model.test.ts b/packages/core/test/model.test.ts
index 2abc3e5395..30e658de9a 100644
--- a/packages/core/test/model.test.ts
+++ b/packages/core/test/model.test.ts
@@ -130,4 +130,73 @@ describe('createModel', () => {
 
     expect(resetState.context).toEqual(userModel.initialContext);
   });
+
+  it('can model events', () => {
+    const userModel = createModel(
+      {
+        name: 'David',
+        age: 30
+      },
+      {
+        events: {
+          updateName: (value: string) => ({ value }),
+          updateAge: (value: number) => {
+            const payload = {
+              value
+            };
+            (payload as any).type = 'this should be overwritten';
+            return payload;
+          },
+          anotherEvent: () => ({})
+        }
+      }
+    );
+
+    // Example of an externally-defined assign action
+    const assignName = userModel.assign(
+      {
+        name: (_, event) => {
+          return event.value;
+        }
+      },
+      'updateName'
+    );
+
+    const machine = createMachine<typeof userModel>({
+      context: userModel.initialContext,
+      initial: 'active',
+      states: {
+        active: {
+          on: {
+            updateName: {
+              // pre-defined assign action
+              actions: assignName
+            },
+            updateAge: {
+              // inline assign action
+              actions: userModel.assign((_, e) => {
+                return {
+                  age: e.value
+                };
+              })
+            }
+          }
+        }
+      }
+    });
+
+    let updatedState = machine.transition(
+      undefined,
+      userModel.events.updateName('Anyone')
+    );
+
+    expect(updatedState.context.name).toEqual('Anyone');
+
+    updatedState = machine.transition(
+      updatedState,
+      userModel.events.updateAge(42)
+    );
+
+    expect(updatedState.context.age).toEqual(42);
+  });
 });
diff --git a/packages/xstate-react/test/useMachine.test.tsx b/packages/xstate-react/test/useMachine.test.tsx
index 04d3dbfb5a..3139a3e3b7 100644
--- a/packages/xstate-react/test/useMachine.test.tsx
+++ b/packages/xstate-react/test/useMachine.test.tsx
@@ -731,7 +731,7 @@ describe('useMachine (strict mode)', () => {
   });
 
   it('should not miss initial synchronous updates', () => {
-    const m = createMachine<any>({
+    const m = createMachine<{ count: number }>({
       initial: 'idle',
       context: {
         count: 0
@@ -749,7 +749,7 @@ describe('useMachine (strict mode)', () => {
 
     const App = () => {
       const [state] = useMachine(m);
-      return state.context.count;
+      return <>{state.context.count}</>;
     };
 
     const { container } = render(<App />);
diff --git a/packages/xstate-react/test/useService.test.tsx b/packages/xstate-react/test/useService.test.tsx
index 7e18763a65..aeaf5d772a 100644
--- a/packages/xstate-react/test/useService.test.tsx
+++ b/packages/xstate-react/test/useService.test.tsx
@@ -189,7 +189,7 @@ describe('useService hook', () => {
 
   it('service should accept the 2-argument variant', () => {
     const service = interpret(
-      createMachine<any, { type: 'EVENT'; value: number }>({
+      createMachine<{ value: number }, { type: 'EVENT'; value: number }>({
         initial: 'first',
         states: {
           first: {