diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0e37590..58de5f1 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -16,6 +16,7 @@
 This macro generates a series of terminal commands (appended w) bash script which creates a new file in your dbt project based off the results of the [generate_base_model](macros/generate_base_model.sql) macro. Therefore, instead of outputting in the terminal, it will create the file for you.
 - Add `include_data_types` flag to `generate_source` macro ([#76](https://github.com/dbt-labs/dbt-codegen/pull/76))
 - Add `get_models` macro in helper macros. This macro retrieves a list of models with specified prefix at the specified directory. It is designed to make creating yamls for multiple models easier.
+- Add optional arguments to include database and schema properties in `sources.yml` generated from `generate_source` ([#123](https://github.com/dbt-labs/dbt-codegen/issues/123))
 
 ## Fixes
 - Fix handling of nested `STRUCT` fields in BigQuery ([#98](https://github.com/dbt-labs/dbt-codegen/issues/98), [#105](https://github.com/dbt-labs/dbt-codegen/pull/105))
diff --git a/README.md b/README.md
index 472ae8a..481b07f 100644
--- a/README.md
+++ b/README.md
@@ -56,6 +56,10 @@ types to your source columns definitions.
 want to subselect from all available tables within a given schema.
 * `exclude` (optional, default=''): A string you want to exclude from the selection criteria
 * `name` (optional, default=schema_name): The name of your source
+* `include_database` (optional, default=False): Whether you want to add
+the database to your source definition
+* `include_schema` (optional, default=False): Whether you want to add
+the schema to your source definition
 
 ### Usage:
 1. Copy the macro into a statement tab in the dbt Cloud IDE, or into an analysis file, and compile your code
@@ -91,6 +95,7 @@ version: 2
 sources:
   - name: raw_jaffle_shop
     database: raw
+    schema: raw_jaffle_shop
     tables:
       - name: customers
         description: ""
diff --git a/integration_tests/tests/test_generate_source_all_args.sql b/integration_tests/tests/test_generate_source_all_args.sql
index fb46970..b6ac69c 100644
--- a/integration_tests/tests/test_generate_source_all_args.sql
+++ b/integration_tests/tests/test_generate_source_all_args.sql
@@ -9,7 +9,10 @@
     generate_columns=True,
     include_descriptions=True,
     include_data_types=True,
-    name=raw_schema
+    name=raw_schema,
+    table_names=None,
+    include_database=True,
+    include_schema=True
 ) %}
 
 
@@ -20,6 +23,8 @@ version: 2
 sources:
   - name: {{ raw_schema | trim | lower }}
     description: ""
+    database: analytics
+    schema: codegen_integration_tests_snowflake_raw_data
     tables:
       - name: data__a_relation
         description: ""
diff --git a/integration_tests/tests/test_generate_source_include_database_property.sql b/integration_tests/tests/test_generate_source_include_database_property.sql
new file mode 100644
index 0000000..e64e899
--- /dev/null
+++ b/integration_tests/tests/test_generate_source_include_database_property.sql
@@ -0,0 +1,19 @@
+
+{% set raw_schema = generate_schema_name('raw_data') %}
+
+{% set actual_source_yaml = codegen.generate_source(raw_schema, include_database=True) %}
+
+{% set expected_source_yaml %}
+version: 2
+
+sources:
+  - name: {{ raw_schema | trim | lower }}
+    database: analytics
+    tables:
+      - name: data__a_relation
+      - name: data__b_relation
+      - name: data__campaign_analytics
+{% endset %}
+
+
+{{ assert_equal (actual_source_yaml | trim, expected_source_yaml | trim) }}
diff --git a/integration_tests/tests/test_generate_source_include_schema_property.sql b/integration_tests/tests/test_generate_source_include_schema_property.sql
new file mode 100644
index 0000000..6fe08f7
--- /dev/null
+++ b/integration_tests/tests/test_generate_source_include_schema_property.sql
@@ -0,0 +1,19 @@
+
+{% set raw_schema = generate_schema_name('raw_data') %}
+
+{% set actual_source_yaml = codegen.generate_source(raw_schema, include_schema=True) %}
+
+{% set expected_source_yaml %}
+version: 2
+
+sources:
+  - name: {{ raw_schema | trim | lower }}
+    schema: {{ raw_schema | trim | lower }}
+    tables:
+      - name: data__a_relation
+      - name: data__b_relation
+      - name: data__campaign_analytics
+{% endset %}
+
+
+{{ assert_equal (actual_source_yaml | trim, expected_source_yaml | trim) }}
diff --git a/macros/generate_source.sql b/macros/generate_source.sql
index df81053..5097655 100644
--- a/macros/generate_source.sql
+++ b/macros/generate_source.sql
@@ -15,7 +15,7 @@
 
 
 ---
-{% macro generate_source(schema_name, database_name=target.database, generate_columns=False, include_descriptions=False, include_data_types=False, table_pattern='%', exclude='', name=schema_name, table_names=None) %}
+{% macro generate_source(schema_name, database_name=target.database, generate_columns=False, include_descriptions=False, include_data_types=False, table_pattern='%', exclude='', name=schema_name, table_names=None, include_database=False, include_schema=False) %}
 
 {% set sources_yaml=[] %}
 {% do sources_yaml.append('version: 2') %}
@@ -27,11 +27,11 @@
     {% do sources_yaml.append('    description: ""' ) %}
 {% endif %}
 
-{% if database_name != target.database %}
+{% if database_name != target.database or include_database %}
 {% do sources_yaml.append('    database: ' ~ database_name | lower) %}
 {% endif %}
 
-{% if schema_name != name %}
+{% if schema_name != name or include_schema %}
 {% do sources_yaml.append('    schema: ' ~ schema_name | lower) %}
 {% endif %}