diff --git a/app/helpers/events_helper.rb b/app/helpers/events_helper.rb
index 6aeab7bb8ce..71f97fbb8c8 100644
--- a/app/helpers/events_helper.rb
+++ b/app/helpers/events_helper.rb
@@ -136,9 +136,8 @@ module EventsHelper
   end
 
   def event_note(text)
-    text = first_line_in_markdown(text)
-    text = truncate(text, length: 150)
-    sanitize(markdown(text), tags: %w(a img b pre p))
+    text = first_line_in_markdown(text, 150)
+    sanitize(text, tags: %w(a img b pre code p))
   end
 
   def event_commit_title(message)
diff --git a/app/helpers/gitlab_markdown_helper.rb b/app/helpers/gitlab_markdown_helper.rb
index 0365681a128..7d3cb749829 100644
--- a/app/helpers/gitlab_markdown_helper.rb
+++ b/app/helpers/gitlab_markdown_helper.rb
@@ -51,12 +51,14 @@ module GitlabMarkdownHelper
     @markdown.render(text).html_safe
   end
 
-  def first_line_in_markdown(text)
-    line = text.split("\n").detect do |i|
-      i.present? && markdown(i).present?
-    end
-    line += '...' unless line.nil?
-    line
+  # Return the first line of +text+, up to +max_chars+, after parsing the line
+  # as Markdown.  HTML tags in the parsed output are not counted toward the
+  # +max_chars+ limit.  If the length limit falls within a tag's contents, then
+  # the tag contents are truncated without removing the closing tag.
+  def first_line_in_markdown(text, max_chars = nil)
+    md = markdown(text).strip
+
+    truncate_visible(md, max_chars || md.length) if md.present?
   end
 
   def render_wiki_content(wiki_page)
@@ -204,4 +206,52 @@ module GitlabMarkdownHelper
   def correct_ref
     @ref ? @ref : "master"
   end
+
+  private
+
+  # Return +text+, truncated to +max_chars+ characters, excluding any HTML
+  # tags.
+  def truncate_visible(text, max_chars)
+    doc = Nokogiri::HTML.fragment(text)
+    content_length = 0
+    truncated = false
+
+    doc.traverse do |node|
+      if node.text? || node.content.empty?
+        if truncated
+          node.remove
+          next
+        end
+
+        # Handle line breaks within a node
+        if node.content.strip.lines.length > 1
+          node.content = "#{node.content.lines.first.chomp}..."
+          truncated = true
+        end
+
+        num_remaining = max_chars - content_length
+        if node.content.length > num_remaining
+          node.content = node.content.truncate(num_remaining)
+          truncated = true
+        end
+        content_length += node.content.length
+      end
+
+      truncated = truncate_if_block(node, truncated)
+    end
+
+    doc.to_html
+  end
+
+  # Used by #truncate_visible.  If +node+ is the first block element, and the
+  # text hasn't already been truncated, then append "..." to the node contents
+  # and return true.  Otherwise return false.
+  def truncate_if_block(node, truncated)
+    if node.element? && node.description.block? && !truncated
+      node.content = "#{node.content}..." if node.next_sibling
+      true
+    else
+      truncated
+    end
+  end
 end
diff --git a/spec/helpers/events_helper_spec.rb b/spec/helpers/events_helper_spec.rb
new file mode 100644
index 00000000000..4de54d291f2
--- /dev/null
+++ b/spec/helpers/events_helper_spec.rb
@@ -0,0 +1,52 @@
+require 'spec_helper'
+
+describe EventsHelper do
+  include ApplicationHelper
+  include GitlabMarkdownHelper
+
+  it 'should display one line of plain text without alteration' do
+    input = 'A short, plain note'
+    expect(event_note(input)).to match(input)
+    expect(event_note(input)).not_to match(/\.\.\.\z/)
+  end
+
+  it 'should display inline code' do
+    input = 'A note with `inline code`'
+    expected = 'A note with <code>inline code</code>'
+
+    expect(event_note(input)).to match(expected)
+  end
+
+  it 'should truncate a note with multiple paragraphs' do
+    input = "Paragraph 1\n\nParagraph 2"
+    expected = 'Paragraph 1...'
+
+    expect(event_note(input)).to match(expected)
+  end
+
+  it 'should display the first line of a code block' do
+    input = "```\nCode block\nwith two lines\n```"
+    expected = '<pre><code class="">Code block...</code></pre>'
+
+    expect(event_note(input)).to match(expected)
+  end
+
+  it 'should truncate a single long line of text' do
+    text = 'The quick brown fox jumped over the lazy dog twice' # 50 chars
+    input = "#{text}#{text}#{text}#{text}" # 200 chars
+    expected = "#{text}#{text}".sub(/.{3}/, '...')
+
+    expect(event_note(input)).to match(expected)
+  end
+
+  it 'should preserve a link href when link text is truncated' do
+    text = 'The quick brown fox jumped over the lazy dog' # 44 chars
+    input = "#{text}#{text}#{text} " # 133 chars
+    link_url = 'http://example.com/foo/bar/baz' # 30 chars
+    input << link_url
+    expected_link_text = 'http://example...</a>'
+
+    expect(event_note(input)).to match(link_url)
+    expect(event_note(input)).to match(expected_link_text)
+  end
+end