diff --git a/src/index.js b/src/index.js
index 3938c5c..7d22922 100644
--- a/src/index.js
+++ b/src/index.js
@@ -8,11 +8,12 @@ const TAGS = {
 	'-': ['<hr />']
 };
 
-/** Outdent a string based on the first indented line's leading whitespace
+/** Outdent a string based on a selected replacement, defaulting to the first indented line's leading whitespace
  *	@private
  */
-function outdent(str) {
-	return str.replace(RegExp('^'+(str.match(/^(\t| )+/) || '')[0], 'gm'), '');
+function outdent(str, replacement) {
+	replacement = replacement || str.match(/^(\t| )*/)[0] || '';
+	return str.replace(RegExp('^'+(replacement), 'gm'), '');
 }
 
 /** Encode special attribute characters to HTML entities in a String.
@@ -24,7 +25,7 @@ function encodeAttr(str) {
 
 /** Parse Markdown into an HTML String. */
 export default function parse(md, prevLinks) {
-	let tokenizer = /((?:^|\n+)(?:\n---+|\* \*(?: \*)+)\n)|(?:^``` *(\w*)\n([\s\S]*?)\n```$)|((?:(?:^|\n+)(?:\t|  {2,}).+)+\n*)|((?:(?:^|\n)([>*+-]|\d+\.)\s+.*)+)|(?:!\[([^\]]*?)\]\(([^)]+?)\))|(\[)|(\](?:\(([^)]+?)\))?)|(?:(?:^|\n+)([^\s].*)\n(-{3,}|={3,})(?:\n+|$))|(?:(?:^|\n+)(#{1,6})\s*(.+)(?:\n+|$))|(?:`([^`].*?)`)|(  \n\n*|\n{2,}|__|\*\*|[_*]|~~)/gm,
+	let tokenizer = /((?:^|\n+)(?:\n---+|\* \*(?: \*)+)\n)|(?:^``` *(\w*)\n([\s\S]*?)\n```$)|((?:(?:^|\n+)(?:\t|  {2,}).+)+\n*)|((?:(?:^|\n\s*)([*+-]|\d+\.)\s+.*)+)|(?:!\[([^\]]*?)\]\(([^)]+?)\))|(\[)|(\](?:\(([^)]+?)\))?)|(?:(?:^|\n+)([^\s].*)\n(-{3,}|={3,})(?:\n+|$))|(?:(?:^|\n+)(#{1,6})\s*(.+)(?:\n+|$))|(?:`([^`].*?)`)|(  \n\n*|\n{2,}|__|\*\*|[_*]|~~)|((?:(?:^|\n)(?:>\s+[^\n]*\n?)+))/gm,
 		context = [],
 		out = '',
 		links = prevLinks || {},
@@ -63,18 +64,39 @@ export default function parse(md, prevLinks) {
 		else if (t = (token[3] || token[4])) {
 			chunk = '<pre class="code '+(token[4]?'poetry':token[2].toLowerCase())+'"><code'+(token[2] ? ` class="language-${token[2].toLowerCase()}"` : '')+'>'+outdent(encodeAttr(t).replace(/^\n+|\n+$/g, ''))+'</code></pre>';
 		}
-		// > Quotes, -* lists:
+		// -* lists:
 		else if (t = token[6]) {
 			if (t.match(/\./)) {
 				token[5] = token[5].replace(/^\d+/gm, '');
 			}
-			inner = parse(outdent(token[5].replace(/^\s*[>*+.-]/gm, '')));
-			if (t=='>') t = 'blockquote';
-			else {
-				t = t.match(/\./) ? 'ol' : 'ul';
-				inner = inner.replace(/^(.*)(\n|$)/gm, '<li>$1</li>');
-			}
-			chunk = '<'+t+'>' + inner + '</'+t+'>';
+			t = t.match(/\./) ? 'ol' : 'ul';
+			chunk = '<'+t+'><li>';
+			let firstIndent = '';
+			let currentSublist = '';
+			let firstItemCreated = false;
+
+			token[5].replace(/^(\s*)(?:[*+.-]|\d+\.)\s+(.*)\n?/gm, (match, indent, content) => {
+				if (indent) {
+					if (!firstIndent) {
+						firstIndent = indent;
+					}
+					currentSublist += match;
+				}
+				else {
+					let parsedSublist = '';
+					if (currentSublist) {
+						parsedSublist = parse(outdent(currentSublist, firstIndent));
+					}
+					if (firstItemCreated) {
+						chunk += parsedSublist + '</li><li>';
+					}
+					chunk += parse(content);
+					firstItemCreated = true;
+					
+					firstIndent = currentSublist = '';
+				}
+			});
+			chunk += '</li></'+t+'>';
 		}
 		// Images:
 		else if (token[8]) {
@@ -101,6 +123,11 @@ export default function parse(md, prevLinks) {
 		else if (token[17] || token[1]) {
 			chunk = tag(token[17] || '--');
 		}
+		// > Quotes
+		else if (token[18]) {
+			inner = parse(outdent(token[18].replace(/^\s*>/gm, '')));
+			chunk = '<blockquote>' + inner + '</blockquote>';
+		}
 		out += prev;
 		out += chunk;
 	}
diff --git a/test/index.js b/test/index.js
index 5262b16..b40a382 100644
--- a/test/index.js
+++ b/test/index.js
@@ -92,6 +92,14 @@ describe('snarkdown()', () => {
 		it('parses an ordered list', () => {
 			expect(snarkdown('1. Ordered\n2. Lists\n4. Numbers are ignored')).to.equal('<ol><li>Ordered</li><li>Lists</li><li>Numbers are ignored</li></ol>');
 		});
+
+		it('parses nested lists', () => {
+			expect(snarkdown('* One\n\t* Two\n* One again')).to.equal('<ul><li>One<ul><li>Two</li></ul></li><li>One again</li></ul>');
+		});
+
+		it('parses nested lists of different types', () => {
+			expect(snarkdown('* One\n\t1. Two\n* One again')).to.equal('<ul><li>One<ol><li>Two</li></ol></li><li>One again</li></ul>');
+		});
 	});
 
 	describe('line breaks', () => {
@@ -133,7 +141,7 @@ describe('snarkdown()', () => {
 		});
 
 		it('parses lists within block quotes', () => {
-			expect(snarkdown('> - one\n> - two\n> - **three**\nhello')).to.equal('<blockquote><ul><li>one</li><li>two</li><li><strong>three</strong></li></ul></blockquote>\nhello');
+			expect(snarkdown('> - one\n> - two\n> - **three**\nhello')).to.equal('<blockquote><ul><li>one</li><li>two</li><li><strong>three</strong></li></ul></blockquote>hello');
 		});
 	});