diff --git a/lib/slime/parser.ex b/lib/slime/parser.ex
index d1d71a6..f1ef64e 100644
--- a/lib/slime/parser.ex
+++ b/lib/slime/parser.ex
@@ -57,14 +57,14 @@ defmodule Slime.Parser do
     end
   end
 
-  @inline_tag_regex ~r/\A(?<short_tag>(?:[\.#]?[\w-]+)++):\W*(?<inline_tag>.*)/
+  @inline_tag_regex ~r/\A(?<short_tag>(?:[\.#]?[\w-]+)++):[^\w\.#]*(?<rest>.*)/
 
   def parse_line(line) do
     case strip_line(line) do
       {_indentation, ""} ->
         if Application.get_env(:slime, :keep_lines), do: {:prev, ""}, else: nil
       {indentation, line} ->
-        [tag, inline_tag] =
+        [tag, rest] =
           case Regex.run(@inline_tag_regex, line, capture: :all_but_first) do
             nil -> [line, nil]
             match -> match
@@ -72,10 +72,10 @@ defmodule Slime.Parser do
 
         parse_tag = fn (tag) -> tag |> String.first |> parse_line(tag) end
         tag = parse_tag.(tag)
-        tag = if inline_tag do
-          inline_tag = parse_tag.(inline_tag)
+        tag = if rest do
+          {0, rest} = parse_line(rest)
           {tag_name, attrs} = tag
-          {tag_name, [{:children, [inline_tag]} | attrs]}
+          {tag_name, Keyword.put(attrs, :children, [rest])}
         else
           tag
         end
diff --git a/lib/slime/tree.ex b/lib/slime/tree.ex
index 356d20b..9cabce5 100644
--- a/lib/slime/tree.ex
+++ b/lib/slime/tree.ex
@@ -26,10 +26,7 @@ defmodule Slime.Tree do
       |> Enum.map(&to_branch/1)
     filter          = make_child_filter(indentation)
     {children, rem} = Enum.split_while(t, filter)
-    split_children? = existing == [] && children != [] &&
-      Application.get_env(:slime, :keep_lines)
-    sep = if split_children?, do: [%TextNode{content: ""}], else: []
-    children_tree   = existing ++ sep ++ build_tree(children)
+    children_tree   = children |> build_tree |> append_to(existing)
     attrs           = Keyword.put(attrs, :children, children_tree)
     branch          = to_branch({tag, attrs})
     tree            = build_tree(rem)
@@ -45,6 +42,20 @@ defmodule Slime.Tree do
     end
   end
 
+  defp append_to([], existing), do: existing
+  defp append_to(children, []), do: sep() ++ children
+  defp append_to(children, existing = [%TextNode{}]), do: existing ++ children
+  defp append_to(children, [html_node = %HTMLNode{children: node_children}]) do
+    case node_children do
+      [%TextNode{}] -> [html_node] ++ children
+      _ -> [%{html_node|children: append_to(children, node_children)}]
+    end
+  end
+
+  defp sep() do
+    Application.get_env(:slime, :keep_lines) && [%TextNode{content: ""}] || []
+  end
+
   defp to_branch(%{} = branch), do: branch
   defp to_branch(text) when is_binary(text) do
     %TextNode{content: text}
diff --git a/test/parser_test.exs b/test/parser_test.exs
index 1f37646..6d5eada 100644
--- a/test/parser_test.exs
+++ b/test/parser_test.exs
@@ -18,6 +18,30 @@ defmodule ParserTest do
     ]
   end
 
+  test "parses inline nesting" do
+    parsed = [".row: .col-lg-12: p Hello World"] |> Parser.parse_lines
+    assert parsed == [
+      {0, {"div",
+           children: [
+             {"div",
+              children: [
+                {"p",
+                 attributes: [],
+                 children: ["Hello World"],
+                 spaces: %{},
+                 close: false}
+              ],
+              attributes: [class: "col-lg-12"],
+              spaces: %{},
+              close: false}
+           ],
+           attributes: [class: "row"],
+           spaces: %{},
+           close: false}
+      }
+    ]
+  end
+
   test "parses css classes with dashes" do
     {_, {"div", opts}} = ".my-css-class test"
                          |> Parser.parse_line
diff --git a/test/renderer_test.exs b/test/renderer_test.exs
index da4a169..cecd7ee 100644
--- a/test/renderer_test.exs
+++ b/test/renderer_test.exs
@@ -98,6 +98,45 @@ defmodule RendererTest do
     """ |> String.replace("\n", "")
   end
 
+  test "render nested inline html" do
+    slime = ~s"""
+    .row: .col-lg-12: p Hello World
+    """
+
+    assert render(slime) == """
+    <div class="row">
+    <div class="col-lg-12">
+    <p>Hello World</p>
+    </div>
+    </div>
+    """ |> String.replace("\n", "")
+  end
+
+  test "render mixed nesting" do
+    slime = ~s"""
+    .wrap: .row: .col-lg-12
+      .box: p One
+      .box: p Two
+    p Three
+    """
+
+    assert render(slime) == """
+    <div class="wrap">
+    <div class="row">
+    <div class="col-lg-12">
+    <div class="box">
+    <p>One</p>
+    </div>
+    <div class="box">
+    <p>Two</p>
+    </div>
+    </div>
+    </div>
+    </div>
+    <p>Three</p>
+    """ |> String.replace("\n", "")
+  end
+
   test "render closed tag (ending with /)" do
     assert render(~s(img src="image.png"/)) == ~s(<img src="image.png"/>)
   end
diff --git a/test/tree_test.exs b/test/tree_test.exs
index f53d3d4..f8c2301 100644
--- a/test/tree_test.exs
+++ b/test/tree_test.exs
@@ -31,4 +31,56 @@ defmodule TreeTest do
 
     assert parsed == expected
   end
+
+  test "creates tree with mixed nesting" do
+    expected = [
+      %HTMLNode{
+        tag: :div,
+        attributes: [class: ~w(wrap)],
+        children: [
+          %HTMLNode{
+            tag: :div,
+            attributes: [class: ~w(row)],
+            children: [
+              %HTMLNode{
+                tag: :div,
+                attributes: [class: ~w(col-lg-12)],
+                children: [
+                  %HTMLNode{
+                    tag: :div,
+                    attributes: [class: ~w(box)],
+                    children: [
+                      %HTMLNode{
+                        tag: :p,
+                        attributes: [],
+                        children: [%TextNode{content: "One"}]}]},
+                  %HTMLNode{
+                    tag: :p,
+                    attributes: [],
+                    children: [%TextNode{content: "Two"}]}]}]}]},
+      %HTMLNode{
+        tag: :p,
+        attributes: [],
+        children: [%TextNode{content: "Three"}]}]
+
+    parsed = [
+      {0, {:div,
+           attributes: [class: ~w(wrap)],
+           children: [
+             {:div,
+              attributes: [class: ~w(row)],
+              children: [
+                {:div,
+                 attributes: [class: ~w(col-lg-12)],
+                 children: []}]}]}},
+      {2, {:div,
+           attributes: [class: ~w(box)],
+           children: [
+             {:p, attributes: [], children: ~w(One)}]}},
+      {2, {:p, attributes: [], children: ~w(Two)}},
+      {0, {:p, attributes: [], children: ~w(Three)}}
+    ] |> Tree.build_tree
+
+    assert parsed == expected
+  end
 end