diff --git a/lib/sinatra/base.rb b/lib/sinatra/base.rb
index 1c3881e2..37fab962 100644
--- a/lib/sinatra/base.rb
+++ b/lib/sinatra/base.rb
@@ -282,7 +282,7 @@ module Sinatra
 
     def render_erb(template, data, options, &block)
       data = data.call if data.kind_of? Proc
-      instance = ::ERB.new(data)
+      instance = ::ERB.new(data, nil, nil, '@_out_buf')
       locals = options[:locals] || {}
       locals_assigns = locals.to_a.collect { |k,v| "#{k} = locals[:#{k}]" }
       src = "#{locals_assigns.join("\n")}\n#{instance.src}"
diff --git a/test/erb_test.rb b/test/erb_test.rb
index e3fd9dcf..df3902d2 100644
--- a/test/erb_test.rb
+++ b/test/erb_test.rb
@@ -47,4 +47,21 @@ describe "ERB Templates" do
     assert ok?
     assert_equal "ERB Layout!\nHello World\n", body
   end
+
+  it "renders erb with blocks" do
+    mock_app {
+      def container
+        @_out_buf << "THIS."
+        yield
+        @_out_buf << "SPARTA!"
+      end
+      def is; "IS." end
+      get '/' do
+        erb '<% container do %> <%= is %> <% end %>'
+      end
+    }
+    get '/'
+    assert ok?
+    assert_equal 'THIS. IS. SPARTA!', body
+  end
 end