diff --git a/lib/pretty_hamlit/compiler.rb b/lib/pretty_hamlit/compiler.rb
index c8b47264..464c2400 100644
--- a/lib/pretty_hamlit/compiler.rb
+++ b/lib/pretty_hamlit/compiler.rb
@@ -1,4 +1,5 @@
 require 'hamlit/compiler'
+require 'pretty_hamlit/compiler/tag_compiler'
 require 'pretty_hamlit/filters'
 require 'pretty_hamlit/whitespace_compiler'
 
@@ -7,6 +8,7 @@ module PrettyHamlit
     def initialize(options = {})
       super
       @indent_level = 0
+      @tag_compiler = TagCompiler.new(options)
 
       @filter_compiler     = Filters.new(options)
       @whitespace_compiler = WhitespaceCompiler.new
@@ -31,7 +33,7 @@ module PrettyHamlit
 
     def compile_tag(node)
       @indent_level += 1
-      super
+      @tag_compiler.compile(node, @indent_level) { |n| compile_children(n) }
     ensure
       @indent_level -= 1
     end
diff --git a/lib/pretty_hamlit/compiler/tag_compiler.rb b/lib/pretty_hamlit/compiler/tag_compiler.rb
new file mode 100644
index 00000000..0327c698
--- /dev/null
+++ b/lib/pretty_hamlit/compiler/tag_compiler.rb
@@ -0,0 +1,39 @@
+require 'hamlit/compiler/tag_compiler'
+
+module PrettyHamlit
+  class Compiler < Hamlit::Compiler
+    class TagCompiler < Hamlit::Compiler::TagCompiler
+      def initialize(options = {})
+        super
+        @buffer = options[:buffer]
+      end
+
+      def compile(node, indent_level, &block)
+        attrs    = compile_attributes(node)
+        contents = compile_contents(node, indent_level, &block)
+        [:html, :tag, node.value[:name], attrs, contents]
+      end
+
+      private
+
+      def compile_contents(node, indent_level, &block)
+        case
+        when !node.children.empty?
+          yield(node)
+        when node.value[:value].nil? && self_closing?(node)
+          nil
+        when node.value[:parse]
+          [:multi,
+           [:code, "#{@buffer} << ::PrettyHamlit::DynamicIndentation.inline_or_expand(#{indent_level}) do |#{@buffer}|"],
+           [:dynamic, node.value[:value]],
+           [:code, 'end'],
+          ]
+        when Haml::Util.contains_interpolation?(node.value[:value])
+          [:dynamic, node.value[:value]]
+        else
+          [:static, node.value[:value]]
+        end
+      end
+    end
+  end
+end
diff --git a/lib/pretty_hamlit/dynamic_indentation.rb b/lib/pretty_hamlit/dynamic_indentation.rb
index 900bd01a..7a275d02 100644
--- a/lib/pretty_hamlit/dynamic_indentation.rb
+++ b/lib/pretty_hamlit/dynamic_indentation.rb
@@ -1,10 +1,32 @@
 module PrettyHamlit
   class DynamicIndentation
     class << self
-      def indent_with(indent_level)
-        indent = "\n" << '  ' * indent_level
-        text = yield('')
-        text.gsub("\n", indent)
+      def indent_with(indent_level, &block)
+        text = capture(&block)
+        insert_indent(text, indent_level)
+      end
+
+      def inline_or_expand(indent_level, &block)
+        text = capture(&block)
+        return text unless text.include?("\n")
+
+        indent_space(indent_level) <<
+          insert_indent(text, indent_level) <<
+          indent_space(indent_level - 1)
+      end
+
+      private
+
+      def indent_space(indent_level)
+        "\n" << '  ' * [indent_level, 0].max
+      end
+
+      def insert_indent(text, indent_level)
+        text.gsub("\n", indent_space(indent_level))
+      end
+
+      def capture(&block)
+        block.call([]).compact.join.rstrip
       end
     end
   end
diff --git a/test/engine_test.rb b/test/engine_test.rb
index 1378ccca..cb955fd8 100644
--- a/test/engine_test.rb
+++ b/test/engine_test.rb
@@ -222,7 +222,7 @@ HAML
     assert_equal("<p>Hello</p>", render('%p Hello').chomp)
   end
 
-  def test_one_liner_with_newline_shouldnt_be_one_line; skip # dynamic indentation # script bug
+  def test_one_liner_with_newline_shouldnt_be_one_line
     assert_equal("<p>\n  foo\n  bar\n</p>", render('%p= "foo\nbar"').chomp)
   end