diff --git a/lib/coffee-script/lexer.js b/lib/coffee-script/lexer.js
index 944486b4..580798f6 100644
--- a/lib/coffee-script/lexer.js
+++ b/lib/coffee-script/lexer.js
@@ -767,10 +767,17 @@
     };
 
     Lexer.prototype.escapeLines = function(str, heredoc) {
+      str = str.replace(/\\[^\S\n]*(\n|\\)\s*/g, function(escaped, character) {
+        if (character === '\n') {
+          return '';
+        } else {
+          return escaped;
+        }
+      });
       if (heredoc) {
         return str.replace(MULTILINER, '\\n');
       } else {
-        return str.replace(/((^|[^\\])(\\\\)+)\n/g, '$1 \\\n').replace(/\\\s*\n\s*/g, '').replace(/\s*\n\s*/g, ' ');
+        return str.replace(/\s*\n\s*/g, ' ');
       }
     };
 
@@ -778,8 +785,8 @@
       if (!body) {
         return quote + quote;
       }
-      body = body.replace(/\\([\s\S])/g, function(match, contents) {
-        if (contents === quote || heredoc && contents === '\n') {
+      body = body.replace(RegExp("\\\\(" + quote + "|\\\\)", "g"), function(match, contents) {
+        if (contents === quote) {
           return contents;
         } else {
           return match;
diff --git a/src/lexer.coffee b/src/lexer.coffee
index fa910ec0..78e0e889 100644
--- a/src/lexer.coffee
+++ b/src/lexer.coffee
@@ -691,18 +691,20 @@ exports.Lexer = class Lexer
 
   # Converts newlines for string literals.
   escapeLines: (str, heredoc) ->
+    # Ignore escaped backslashes and remove escaped newlines
+    str = str.replace /\\[^\S\n]*(\n|\\)\s*/g, (escaped, character) ->
+      if character is '\n' then '' else escaped
     if heredoc
       str.replace MULTILINER, '\\n'
     else
-      str.replace(/((^|[^\\])(\\\\)+)\n/g, '$1 \\\n') # escaped backslashes
-         .replace(/\\\s*\n\s*/g, '') # backslash at EOL
-         .replace(/\s*\n\s*/g, ' ')
+      str.replace /\s*\n\s*/g, ' '
 
   # Constructs a string token by escaping quotes and newlines.
   makeString: (body, quote, heredoc) ->
     return quote + quote unless body
-    body = body.replace /\\([\s\S])/g, (match, contents) ->
-      if contents is quote or heredoc and contents is '\n' then contents else match
+    # Ignore escaped backslashes and unescape quotes
+    body = body.replace /// \\( #{quote} | \\ ) ///g, (match, contents) ->
+      if contents is quote then contents else match
     body = body.replace /// #{quote} ///g, '\\$&'
     quote + @escapeLines(body, heredoc) + quote
 
diff --git a/test/strings.coffee b/test/strings.coffee
index 36101b04..ee276c20 100644
--- a/test/strings.coffee
+++ b/test/strings.coffee
@@ -42,6 +42,8 @@ test "#3229, multiline strings", ->
     indentation
       doesn\'t
   matter', 'indentation doesn\'t matter'
+  eq 'trailing ws      
+    doesn\'t matter', 'trailing ws doesn\'t matter'
 
   # Use backslashes at the end of a line to specify whitespace between lines.
   eq 'a \
@@ -72,6 +74,7 @@ test "#3229, multiline strings", ->
     }", "a string inside interpolation"
 
   # Handle escaped backslashes correctly.
+  eq '\\', `'\\'`
   eq 'escaped backslash at EOL\\
       next line', 'escaped backslash at EOL\\ next line'
   eq '\\
@@ -84,8 +87,10 @@ test "#3229, multiline strings", ->
       next line', 'triple backslash\\next line'
   eq 'several escaped backslashes\\\\\\
       ok', 'several escaped backslashes\\\\\\ ok'
-  eq 'several escaped backslashes\\\\\\\
-      ok', 'several escaped backslashes\\\\\\ok'
+  eq 'several escaped backslashes slash\\\\\\\
+      ok', 'several escaped backslashes slash\\\\\\ok'
+  eq 'several escaped backslashes with trailing ws \\\\\\   
+      ok', 'several escaped backslashes with trailing ws \\\\\\ ok'
 
   # Backslashes at beginning of lines.
   eq 'first line
@@ -100,6 +105,67 @@ test "#3229, multiline strings", ->
 
         backslash', 'lone backslash'
 
+test "#3249, escape newlines in heredocs with backslashes", ->
+  # Ignore escaped newlines
+  eq '''
+    Set whitespace      \
+       <- this is ignored\  
+           none
+      normal indentation
+    ''', 'Set whitespace      <- this is ignorednone\n  normal indentation'
+  eq """
+    Set whitespace      \
+       <- this is ignored\  
+           none
+      normal indentation
+    """, 'Set whitespace      <- this is ignorednone\n  normal indentation'
+
+  # Changed from #647
+  eq '''
+  Hello, World\
+
+  ''', 'Hello, World'
+
+  # Backslash at the beginning of a literal string.
+  eq '''\
+      ok''', 'ok'
+  eq '''  \
+      ok''', '  ok'
+
+  # Same behavior in interpolated strings.
+  eq """
+    interpolation #{1}
+      follows #{2}  \
+        too #{3}\
+    !
+  """, 'interpolation 1\n  follows 2  too 3!'
+
+  # TODO: uncomment when #2388 is fixed
+  # eq """a heredoc #{
+  #     "inside \
+  #       interpolation"
+  #   }""", "a heredoc inside interpolation"
+
+  # Handle escaped backslashes correctly.
+  eq '''
+    escaped backslash at EOL\\
+      next line
+  ''', 'escaped backslash at EOL\\\n  next line'
+
+  # Backslashes at beginning of lines.
+  eq '''first line
+      \   backslash at BOL''', 'first line\n\   backslash at BOL'
+  eq """first line\
+      \   backslash at BOL""", 'first line\   backslash at BOL'
+
+# Edge case.
+  eq '''lone
+
+          \
+
+
+
+        backslash''', 'lone\n\n  backslash'
 
 #647
 eq "''Hello, World\\''", '''
@@ -108,10 +174,6 @@ eq "''Hello, World\\''", '''
 eq '""Hello, World\\""', """
 "\"Hello, World\\\""
 """
-eq 'Hello, World\n', '''
-Hello, World\
-
-'''
 
 a = """
     basic heredoc