diff --git a/mustache-sharp/CompoundGenerator.cs b/mustache-sharp/CompoundGenerator.cs
index d5ba34c..7614ceb 100644
--- a/mustache-sharp/CompoundGenerator.cs
+++ b/mustache-sharp/CompoundGenerator.cs
@@ -71,7 +71,11 @@ namespace mustache
             }
             else
             {
-                generators = new List<IGenerator>() { _subGenerator };
+                generators = new List<IGenerator>();
+                if (_subGenerator != null)
+                {
+                    generators.Add(_subGenerator);
+                }
             }
             foreach (KeyScope childScope in scopes)
             {
diff --git a/mustache-sharp/FormatCompiler.cs b/mustache-sharp/FormatCompiler.cs
index 842e39f..73154ec 100644
--- a/mustache-sharp/FormatCompiler.cs
+++ b/mustache-sharp/FormatCompiler.cs
@@ -49,7 +49,8 @@ namespace mustache
         public Generator Compile(string format)
         {
             CompoundGenerator generator = new CompoundGenerator(_master, new ArgumentCollection());
-            int formatIndex = buildCompoundGenerator(_master, _tagScope, generator, format, 0);
+            Trimmer trimmer = new Trimmer();
+            int formatIndex = buildCompoundGenerator(_master, _tagScope, generator, trimmer, format, 0);
             string trailing = format.Substring(formatIndex);
             StaticGenerator staticGenerator = new StaticGenerator(trailing);
             generator.AddGenerator(staticGenerator);
@@ -60,7 +61,7 @@ namespace mustache
         {
             foreach (TagDefinition childTag in definition.ChildTags)
             {
-                scope.AddTag(childTag);
+                scope.TryAddTag(childTag);
             }
         }
 
@@ -121,7 +122,8 @@ namespace mustache
         private static int buildCompoundGenerator(
             TagDefinition tagDefinition, 
             TagScope scope, 
-            CompoundGenerator generator, 
+            CompoundGenerator generator,
+            Trimmer trimmer,
             string format, int formatIndex)
         {
             while (true)
@@ -139,11 +141,10 @@ namespace mustache
                 }
 
                 string leading = format.Substring(formatIndex, match.Index - formatIndex);
-                StaticGenerator staticGenerator = new StaticGenerator(leading);
-                generator.AddGenerator(staticGenerator);
 
                 if (match.Groups["key"].Success)
                 {
+                    trimmer.AddStaticGenerator(generator, true, leading);
                     formatIndex = match.Index + match.Length;
                     string key = match.Groups["key"].Value;
                     string alignment = match.Groups["alignment"].Value;
@@ -161,13 +162,14 @@ namespace mustache
                         string message = String.Format(Resources.UnknownTag, tagName);
                         throw new FormatException(message);
                     }
+                    trimmer.AddStaticGeneratorBeforeTag(generator, true, leading);
                     if (nextDefinition.HasBody)
                     {
                         ArgumentCollection arguments = getArguments(nextDefinition, match);
                         CompoundGenerator compoundGenerator = new CompoundGenerator(nextDefinition, arguments);
                         TagScope nextScope = new TagScope(scope);
                         registerTags(nextDefinition, nextScope);
-                        formatIndex = buildCompoundGenerator(nextDefinition, nextScope, compoundGenerator, format, formatIndex);
+                        formatIndex = buildCompoundGenerator(nextDefinition, nextScope, compoundGenerator, trimmer, format, formatIndex);
                         generator.AddGenerator(nextDefinition, compoundGenerator);
                     }
                     else
@@ -181,6 +183,8 @@ namespace mustache
                 else if (match.Groups["close"].Success)
                 {
                     string tagName = match.Groups["name"].Value;
+                    TagDefinition nextDefinition = scope.Find(tagName);
+                    trimmer.AddStaticGeneratorBeforeTag(generator, false, leading);
                     formatIndex = match.Index;
                     if (tagName == tagDefinition.Name)
                     {
@@ -190,6 +194,7 @@ namespace mustache
                 }
                 else if (match.Groups["comment"].Success)
                 {
+                    trimmer.AddStaticGenerator(generator, false, leading);
                     formatIndex = match.Index + match.Length;
                 }
             }
diff --git a/mustache-sharp/TagScope.cs b/mustache-sharp/TagScope.cs
index 0a0ddd2..40684b9 100644
--- a/mustache-sharp/TagScope.cs
+++ b/mustache-sharp/TagScope.cs
@@ -45,6 +45,18 @@ namespace mustache
             _tagLookup.Add(definition.Name, definition);
         }
 
+        /// <summary>
+        /// Trys to register the tag in the current scope.
+        /// </summary>
+        /// <param name="definition">The tag to add to the current scope.</param>
+        public void TryAddTag(TagDefinition definition)
+        {
+            if (Find(definition.Name) == null)
+            {
+                _tagLookup.Add(definition.Name, definition);
+            }
+        }
+
         /// <summary>
         /// Finds the tag definition with the given name.
         /// </summary>
diff --git a/mustache-sharp/Trimmer.cs b/mustache-sharp/Trimmer.cs
new file mode 100644
index 0000000..0f078ec
--- /dev/null
+++ b/mustache-sharp/Trimmer.cs
@@ -0,0 +1,90 @@
+using System;
+
+namespace mustache
+{
+    /// <summary>
+    /// Removes unnecessary whitespace from static text.
+    /// </summary>
+    internal sealed class Trimmer
+    {
+        private bool hasHeader;
+        private bool hasFooter;
+        private bool hasTag;
+        private bool canTrim;
+
+        /// <summary>
+        /// Initializes a new instance of a Trimmer.
+        /// </summary>
+        public Trimmer()
+        {
+            hasTag = false;
+            canTrim = true;
+        }
+
+        /// <summary>
+        /// Processes the given text, creating a StaticGenerator and adding it to the current compound generator.
+        /// </summary>
+        /// <param name="generator">The compound generator to add the static generator to.</param>
+        /// <param name="isHeader">Gets whether we're encountered the header tag.</param>
+        /// <param name="value">The static text to trim.</param>
+        public void AddStaticGeneratorBeforeTag(CompoundGenerator generator, bool isHeader, string value)
+        {
+            string trimmed = processLines(value);
+            hasHeader |= isHeader;
+            hasFooter |= hasHeader && !isHeader;
+            addStaticGenerator(generator, trimmed);
+        }
+
+        /// <summary>
+        /// Processes the given text, creating a StaticGenerator and adding it to the current compound generator.
+        /// </summary>
+        /// <param name="generator">The compound generator to add the static generator to.</param>
+        /// <param name="isOutput">Specifies whether the tag results in output.</param>
+        /// <param name="value">The static text to trim.</param>
+        public void AddStaticGenerator(CompoundGenerator generator, bool isOutput, string value)
+        {
+            string trimmed = processLines(value);
+            canTrim &= !isOutput;
+            addStaticGenerator(generator, trimmed);
+        }
+
+        private string processLines(string value)
+        {
+            string trimmed = value;
+            int newline = value.IndexOf(Environment.NewLine);
+            if (newline == -1)
+            {
+                canTrim &= String.IsNullOrWhiteSpace(value);
+            }
+            else
+            {
+                // finish processing the previous line
+                if (canTrim && hasTag && (!hasHeader || !hasFooter))
+                {
+                    string lineEnd = trimmed.Substring(0, newline);
+                    if (String.IsNullOrWhiteSpace(lineEnd))
+                    {
+                        trimmed = trimmed.Substring(newline + Environment.NewLine.Length);
+                    }
+                }
+                // start processing the next line
+                hasTag = false;
+                hasHeader = false;
+                hasFooter = false;
+                int lastNewline = value.LastIndexOf(Environment.NewLine);
+                string lineStart = value.Substring(lastNewline + Environment.NewLine.Length);
+                canTrim = String.IsNullOrWhiteSpace(lineStart);
+            }
+            return trimmed;
+        }
+
+        private static void addStaticGenerator(CompoundGenerator generator, string trimmed)
+        {
+            if (trimmed.Length > 0)
+            {
+                StaticGenerator leading = new StaticGenerator(trimmed);
+                generator.AddGenerator(leading);
+            }
+        }
+    }
+}
\ No newline at end of file
diff --git a/mustache-sharp/mustache-sharp.csproj b/mustache-sharp/mustache-sharp.csproj
index 5dea571..bc30af7 100644
--- a/mustache-sharp/mustache-sharp.csproj
+++ b/mustache-sharp/mustache-sharp.csproj
@@ -60,6 +60,7 @@
     <Compile Include="TagParameter.cs" />
     <Compile Include="KeyScope.cs" />
     <Compile Include="TagScope.cs" />
+    <Compile Include="Trimmer.cs" />
     <Compile Include="WithGenerator.cs" />
   </ItemGroup>
   <ItemGroup>