diff --git a/templar/markdown.py b/templar/markdown.py
index 36a6d78..ef67218 100644
--- a/templar/markdown.py
+++ b/templar/markdown.py
@@ -70,6 +70,7 @@ def preprocess(text, markdown_obj):
     text, references = get_references(text)
     text = remove_pandoc_comments(text)
     text = handle_whitespace(text)
+    text = space_out_block_tags(text)
     return text, variables, references, footnotes
 
 TAB_SIZE = 4
@@ -228,6 +229,13 @@ def get_footnote_backreferences(text, markdown_obj):
 def remove_pandoc_comments(text):
     return re_pandoc_comment.sub('', text)
 
+re_block_tag = re.compile(r"""
+    (\n|\A)[^\n]*?<\s*/?\s*block\s+[^\n]+?\s*>.*?(\n|\Z)
+""", re.X | re.S)
+def space_out_block_tags(text):
+    return re_block_tag.sub(lambda m: '\n' + m.group(0) + '\n', text)
+
+
 
 ######################
 # Hashed Conversions #
diff --git a/tests/test_markdown/test_tag.py b/tests/test_markdown/test_tag.py
index b842d91..a6b2e5f 100644
--- a/tests/test_markdown/test_tag.py
+++ b/tests/test_markdown/test_tag.py
@@ -62,6 +62,24 @@ def testPrecedingParagraph(self):
         """
         self.assertMarkdown(text, expect)
 
+    def testBlockTagInParagraphs(self):
+        text = """
+        Stuff here
+        <block hello>
+        This is a paragraph.
+        </block hello>
+        """
+        expect = """
+        <p>Stuff here</p>
+
+        <block hello>
+
+        <p>This is a paragraph.</p>
+
+        </block hello>
+        """
+        self.assertMarkdown(text, expect)
+
 class TagTest(MarkdownTest):
     def testBasic(self):
         text = """