diff --git a/lib/rules.js b/lib/rules.js
index 7c59e0d1..20ba2921 100644
--- a/lib/rules.js
+++ b/lib/rules.js
@@ -4,7 +4,8 @@ var shared = require("./shared");
 
 // Returns the indent for a token
 function indentFor(token) {
-  return token.line.length - token.line.trimLeft().length;
+  var line = token.line.replace(/^[\s>]*(> |>)/, "");
+  return line.length - line.trimLeft().length;
 }
 
 // Returns the heading style for a heading token
@@ -575,17 +576,17 @@ module.exports = [
     "tags": [ "blockquote", "whitespace", "indentation" ],
     "aliases": [ "no-multiple-space-blockquote" ],
     "func": function MD027(params, errors) {
-      var inBlockquote = false;
+      var blockquoteNesting = 0;
       params.tokens.forEach(function forToken(token) {
         if (token.type === "blockquote_open") {
-          inBlockquote = true;
+          blockquoteNesting++;
         } else if (token.type === "blockquote_close") {
-          inBlockquote = false;
-        } else if ((token.type === "inline") && inBlockquote) {
+          blockquoteNesting--;
+        } else if ((token.type === "inline") && (blockquoteNesting > 0)) {
           token.content.split(shared.newLineRe)
             .forEach(function forLine(line, offset) {
               if (/^\s/.test(line) ||
-                  (!offset && /^\s*>\s\s/.test(token.line))) {
+                  (!offset && /^(\s*>)+\s\s/.test(token.line))) {
                 errors.push(token.lineNumber + offset);
               }
             });
@@ -622,7 +623,7 @@ module.exports = [
         if (!list.unordered) {
           var number = 1;
           list.items.forEach(function forItem(item) {
-            var re = new RegExp("^\\s*" + String(number) + "\\.");
+            var re = new RegExp("^[\\s>]*" + String(number) + "\\.");
             if (!re.test(item.line)) {
               errors.push(item.lineNumber);
             }
@@ -652,7 +653,7 @@ module.exports = [
           (allSingle ? ulSingle : ulMulti) :
           (allSingle ? olSingle : olMulti);
         list.items.forEach(function forItem(item) {
-          var match = /^\s*\S+(\s+)/.exec(item.line);
+          var match = /^[\s>]*\S+(\s+)/.exec(item.line);
           if (!match || (match[1].length !== expectedSpaces)) {
             errors.push(item.lineNumber);
           }
diff --git a/test/blockquote-spaces-nested.md b/test/blockquote-spaces-nested.md
new file mode 100644
index 00000000..3d4a1ab9
--- /dev/null
+++ b/test/blockquote-spaces-nested.md
@@ -0,0 +1,59 @@
+# Nested blockquote
+
+>  A {MD027}
+>
+> >  B {MD027}
+>
+>  C {MD027}
+
+Text
+
+>  A {MD027}
+>
+> >  B {MD027}
+> >
+> > >  C {MD027}
+> >
+> >  D {MD027}
+>
+>  E {MD027}
+
+Text
+
+>  A {MD027}
+>
+>>  B {MD027}
+>>
+>>>  C {MD027}
+>>
+>>  D {MD027}
+>
+>  E {MD027}
+
+Text
+
+> >  Text {MD027}
+
+Text
+
+ > >  Text {MD027}
+
+Text
+
+  > >  Text {MD027}
+
+Text
+
+>  > Text {MD027}
+
+Text
+
+> >  > Text {MD027}
+
+Text
+
+> >  > > Text {MD027}
+
+Text
+
+>>  >> Text {MD027}
diff --git a/test/lists-in-blockquote.md b/test/lists-in-blockquote.md
new file mode 100644
index 00000000..f34d9864
--- /dev/null
+++ b/test/lists-in-blockquote.md
@@ -0,0 +1,64 @@
+# Lists in blockquote
+
+> 1. The simplest ordered list in blockquote
+
+Text
+
+> + The simplest unordered list in blockquote
+
+Text
+
+>1. Item
+
+Text
+
+>+ Item
+
+Text
+
+>1.  Item {MD030}
+
+Text
+
+>+  Item {MD030}
+
+Text
+
+> 1. Item
+>    1. Item {MD027}
+
+Text
+
+> - Item
+>   - Item {MD027}
+
+Text
+
+   > 1. Item
+   >    1. Item {MD027}
+   >    1.  Item {MD027} {MD030}
+
+Text
+
+   > * Item
+   >   * Item {MD027}
+   >   *  Item {MD027} {MD030}
+   >    * Item {MD027} {MD005}
+   >  * Item {MD027} {MD005}
+
+Text
+
+  > Text
+  > > - Item
+  >  > - Item  {MD027}
+   > > - Item
+  > > > - Item
+  > >  > - Item  {MD027}
+  >  > > - Item  {MD027}
+
+Text
+
+>* Item
+> * Item
+>>* Item
+>> * Item