diff --git a/src/eco/compiler.coffee b/src/eco/compiler.coffee
index bccb881..d32a5cd 100644
--- a/src/eco/compiler.coffee
+++ b/src/eco/compiler.coffee
@@ -2,8 +2,8 @@ CoffeeScript = require "coffee-script"
 {preprocess} = require "./preprocessor"
 {indent}     = require "./util"
 
-module.exports = eco = (source) ->
-  (new Function "module", compile source) module = {}
+module.exports = eco = (source, async) ->
+  (new Function "module", compile source, { async }) module = {}
   module.exports
 
 eco.preprocess = preprocess
@@ -11,12 +11,56 @@ eco.preprocess = preprocess
 eco.compile = compile = (source, options) ->
   identifier = options?.identifier ? "module.exports"
   identifier = "var #{identifier}" unless identifier.match(/\./)
-  script     = CoffeeScript.compile preprocess(source), noWrap: true
-
+  script     = CoffeeScript.compile preprocess(source, options?.async), noWrap: true
+  if options?.async
+    parameters = "__obj, __callback"
+    asyncAssertions = """
+      if (!__callback) {
+          throw new Error("Callback required.");
+      }
+    """
+    asyncHelpers = """
+      __async = function(callback) {
+        return function(done) {
+          try {
+            callback([], function(out) {
+              done(out);
+            });
+          } catch (error) {
+            __callback(error);
+          }
+        }
+      }, 
+    """
+    join = """
+      var index = 0;
+      function expand() {
+        while (index < __out.length) {
+          if (typeof __out[index] == "function") {
+            __out[index](function (out) {
+              Array.prototype.splice.apply(__out, [ index, 1 ].concat(out));
+              expand();
+            });
+            return;
+          }
+          index++;
+        }
+        __callback(null, __out.join(""));
+      }
+      expand();
+    """
+  else
+    parameters = "__obj"
+    asyncAssertions = ""
+    asyncHelpers = ""
+    join = """
+      return __out.join("");
+    """
   """
-    #{identifier} = function(__obj) {
+    #{identifier} = function(#{parameters}) {
       if (!__obj) __obj = {};
-      var __out = [], __capture = function(callback) {
+      #{indent asyncAssertions, 2}
+      var __out = [], #{indent asyncHelpers, 2}__capture = function(callback) {
         var out = __out, result;
         __out = [];
         callback.call(this);
@@ -52,15 +96,14 @@ eco.compile = compile = (source, options) ->
         };
       }
       (function() {
-    #{indent script, 4}
+        #{indent script, 4}
       }).call(__obj);
       __obj.safe = __objSafe, __obj.escape = __escape;
-      return __out.join('');
+      #{indent join, 2}
     };
   """
-
-eco.render = (source, data) ->
-  (eco source) data
+eco.render = (source, data, callback) ->
+  (eco source, typeof callback is "function") data, callback
 
 if require.extensions
   require.extensions[".eco"] = (module, filename) ->
diff --git a/src/eco/preprocessor.coffee b/src/eco/preprocessor.coffee
index f698dd1..7dd1602 100644
--- a/src/eco/preprocessor.coffee
+++ b/src/eco/preprocessor.coffee
@@ -2,16 +2,17 @@ Scanner = require "./scanner"
 util    = require "./util"
 
 module.exports = class Preprocessor
-  @preprocess: (source) ->
-    preprocessor = new Preprocessor source
+  @preprocess: (source, async) ->
+    preprocessor = new Preprocessor source, async
     preprocessor.preprocess()
 
-  constructor: (source) ->
+  constructor: (source, @async) ->
     @scanner  = new Scanner source
     @output   = ""
     @level    = 0
     @options  = {}
     @captures = []
+    @asyncs = []
 
   preprocess: ->
     until @scanner.done
@@ -33,7 +34,9 @@ module.exports = class Preprocessor
   recordCode: (code) ->
     if code isnt "end"
       if @options.print
-        if @options.safe
+        if @async and not @options.inline
+          @record "__out.push __async (__out, __done) => #{code}"
+        else if @options.safe
           @record "__out.push #{code}"
         else
           @record "__out.push __sanitize #{code}"
@@ -43,11 +46,17 @@ module.exports = class Preprocessor
   indent: (capture) ->
     @level++
     if capture
-      @record "__capture #{capture}"
-      @captures.unshift @level
-      @indent()
+      if @async and @options.print
+        @asyncs.unshift @level
+      else
+        @record "__capture #{capture}"
+        @captures.unshift @level
+        @indent()
 
   dedent: ->
+    if @asyncs[0] is @level
+      @asyncs.shift()
+      @record "__done(__out)"
     @level--
     @fail "unexpected dedent" if @level < 0
     if @captures[0] is @level
diff --git a/src/eco/scanner.coffee b/src/eco/scanner.coffee
index 48a4cfe..f63f36e 100644
--- a/src/eco/scanner.coffee
+++ b/src/eco/scanner.coffee
@@ -48,8 +48,11 @@ module.exports = class Scanner
     @scanner.scanUntil Scanner.modePatterns[@mode]
     @buffer   += @scanner.getCapture 0
     @tail      = @scanner.getCapture 1
-    @directive = @scanner.getCapture 3
-    @arrow     = @scanner.getCapture 4
+    if @mode is "data"
+      @capture   = @scanner.getCapture 3
+    else
+      @colon     = @scanner.getCapture 3
+      @arrow     = @scanner.getCapture 4
 
   scanData: (callback) ->
     if @tail is "<%%"
@@ -64,7 +67,6 @@ module.exports = class Scanner
     else if @tail
       @mode = "code"
       callback ["printString", @flush()]
-      callback ["beginCode", print: @directive?, safe: @directive is "-"]
 
   scanCode: (callback) ->
     if @tail is "\n"
@@ -75,9 +77,10 @@ module.exports = class Scanner
       code  = trim @flush()
       code += " #{@arrow}" if @arrow
 
+      callback ["beginCode", print: @capture?, safe: @capture is "-", inline: not @arrow]
       callback ["dedent"] if @isDedentable code
       callback ["recordCode", code]
-      callback ["indent", @arrow] if @directive
+      callback ["indent", @arrow] if @colon
 
   flush: ->
     buffer  = @buffer
diff --git a/src/eco/util.coffee b/src/eco/util.coffee
index 9f40cf6..48765e3 100644
--- a/src/eco/util.coffee
+++ b/src/eco/util.coffee
@@ -4,6 +4,7 @@ exports.repeat = repeat = (string, count) ->
 exports.indent = (string, width) ->
   space = repeat " ", width
   lines = (space + line for line in string.split "\n")
+  lines[0] = lines[0].substring(width)
   lines.join "\n"
 
 exports.trim = (string) ->
diff --git a/test/fixtures/blocks-async.coffee b/test/fixtures/blocks-async.coffee
new file mode 100644
index 0000000..7687321
--- /dev/null
+++ b/test/fixtures/blocks-async.coffee
@@ -0,0 +1,10 @@
+__out.push __async (__out, __done) => @emit =>
+  __out.push '\n  '
+  __out.push __async (__out, __done) => @emit (data) ->
+    __out.push '\n    '
+    __out.push __sanitize "&"
+    __out.push '\n  '
+    __done(__out)
+  __out.push '\n'
+  __done(__out)
+__out.push '\n'
diff --git a/test/fixtures/blocks.coffee b/test/fixtures/blocks.coffee
new file mode 100644
index 0000000..97441b7
--- /dev/null
+++ b/test/fixtures/blocks.coffee
@@ -0,0 +1,10 @@
+__out.push __sanitize @emit =>
+  __capture =>
+    __out.push '\n  '
+    __out.push @emit (data) ->
+      __capture ->
+        __out.push '\n    '
+        __out.push __sanitize "&"
+        __out.push '\n  '
+    __out.push '\n'
+__out.push '\n'
diff --git a/test/fixtures/blocks.eco b/test/fixtures/blocks.eco
new file mode 100644
index 0000000..117affc
--- /dev/null
+++ b/test/fixtures/blocks.eco
@@ -0,0 +1,5 @@
+<%= @emit => %>
+  <%- @emit (data) -> %>
+    <%= "&" %>
+  <% end %>
+<% end %>
diff --git a/test/fixtures/blocks.out.1 b/test/fixtures/blocks.out.1
new file mode 100644
index 0000000..3fdd67d
--- /dev/null
+++ b/test/fixtures/blocks.out.1
@@ -0,0 +1,5 @@
+
+  
+    &amp;
+  
+
diff --git a/test/fixtures/error.eco b/test/fixtures/error.eco
new file mode 100644
index 0000000..afaf744
--- /dev/null
+++ b/test/fixtures/error.eco
@@ -0,0 +1 @@
+<%= @emit => %><% end %>
diff --git a/test/test_compile.coffee b/test/test_compile.coffee
index b692981..ab96e4e 100644
--- a/test/test_compile.coffee
+++ b/test/test_compile.coffee
@@ -14,6 +14,14 @@ module.exports =
     test.ok eco.compile fixture("helpers.eco")
     test.done()
 
+  "compiling fixtures/block.eco": (test) ->
+    test.ok eco.compile fixture("helpers.eco")
+    test.done()
+
+  "compiling fixtures/block.eco with async": (test) ->
+    test.ok eco.compile fixture("helpers.eco"), { async: true }
+    test.done()
+
   "parse error throws exception": (test) ->
     test.expect 1
     try
diff --git a/test/test_preprocessor.coffee b/test/test_preprocessor.coffee
index 27bf51a..589ba9b 100644
--- a/test/test_preprocessor.coffee
+++ b/test/test_preprocessor.coffee
@@ -18,6 +18,22 @@ module.exports =
     test.same fixture("helpers.coffee"), preprocess fixture("helpers.eco")
     test.done()
 
+  "preprocessing fixtures/blocks.eco": (test) ->
+    test.same fixture("blocks.coffee"), preprocess fixture("blocks.eco")
+    test.done()
+
+  "preprocessing fixtures/capture.eco": (test) ->
+    test.same fixture("capture.coffee"), preprocess fixture("capture.eco")
+    test.done()
+
+  "preprocessing fixtures/capture.eco with async": (test) ->
+    test.same fixture("capture.coffee"), preprocess fixture("capture.eco"), true
+    test.done()
+
+  "preprocessing fixtures/blocks.eco with async": (test) ->
+    test.same fixture("blocks-async.coffee"), preprocess fixture("blocks.eco"), true
+    test.done()
+
   "unexpected dedent": (test) ->
     test.expect 1
     try
diff --git a/test/test_render.coffee b/test/test_render.coffee
index 7cb45e7..3a9df39 100644
--- a/test/test_render.coffee
+++ b/test/test_render.coffee
@@ -60,6 +60,22 @@ module.exports =
     test.same fixture("capture.out.1"), output
     test.done()
 
+  "rendering blocks.eco": (test) ->
+    output = eco.render fixture("blocks.eco"), emit: (yield) -> yield()
+    test.same fixture("blocks.out.1"), output
+    test.done()
+
+  "rendering blocks.eco async": (test) ->
+    output = eco.render fixture("blocks.eco"), { emit: (yield) -> yield() }, (error, output) ->
+      test.same fixture("blocks.out.1"), output
+      test.done()
+
+  "rendering error.eco async": (test) ->
+    output = eco.render fixture("error.eco"), { emit: () -> throw new Error("catch me") }, (error, output) ->
+      test.ok error
+      test.same "catch me", error.message
+      test.done()
+
   "HTML is escaped by default": (test) ->
     output = eco.render "<%= @emailAddress %>",
       emailAddress: "<sstephenson@gmail.com>"
diff --git a/test/test_scanner.coffee b/test/test_scanner.coffee
index fd4b0eb..335f0cc 100644
--- a/test/test_scanner.coffee
+++ b/test/test_scanner.coffee
@@ -2,27 +2,27 @@
 
 module.exports =
   "'<%' begins a code block": (test) ->
-    tokens = scan "<%"
+    tokens = scan "<% hello() %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
+    test.same ["beginCode", print: false, safe: false, inline: true], tokens.shift()
     test.done()
 
   "'<%=' begins a print block": (test) ->
-    tokens = scan "<%="
+    tokens = scan "<%= hello %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: true, safe: false], tokens.shift()
+    test.same ["beginCode", print: true, safe: false, inline: true], tokens.shift()
     test.done()
 
   "'<%-' begins a safe print block": (test) ->
-    tokens = scan "<%-"
+    tokens = scan "<%- hello %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: true, safe: true], tokens.shift()
+    test.same ["beginCode", print: true, safe: true, inline: true], tokens.shift()
     test.done()
 
   "'%>' ends a code block": (test) ->
     tokens = scan "<% code goes here %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
+    test.same ["beginCode", print: false, safe: false, inline: true], tokens.shift()
     test.same ["recordCode", "code goes here"], tokens.shift()
     test.same ["printString", ""], tokens.shift()
     test.done()
@@ -30,7 +30,7 @@ module.exports =
   "': %>' ends a code block and indents": (test) ->
     tokens = scan "<% for project in @projects: %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
+    test.same ["beginCode", print: false, safe: false, inline: true], tokens.shift()
     test.same ["recordCode", "for project in @projects"], tokens.shift()
     test.same ["indent", undefined], tokens.shift()
     test.done()
@@ -38,7 +38,7 @@ module.exports =
   "'-> %>' ends a code block and indents": (test) ->
     tokens = scan "<%= @render 'layout', -> %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: true, safe: false], tokens.shift()
+    test.same ["beginCode", print: true, safe: false, inline: false], tokens.shift()
     test.same ["recordCode", "@render 'layout', ->"], tokens.shift()
     test.same ["indent", "->"], tokens.shift()
     test.done()
@@ -46,7 +46,7 @@ module.exports =
   "'=> %>' ends a code block and indents": (test) ->
     tokens = scan "<%= @render 'layout', => %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: true, safe: false], tokens.shift()
+    test.same ["beginCode", print: true, safe: false, inline: false], tokens.shift()
     test.same ["recordCode", "@render 'layout', =>"], tokens.shift()
     test.same ["indent", "=>"], tokens.shift()
     test.done()
@@ -54,7 +54,7 @@ module.exports =
   "'<% else: %>' dedents, begins a code block, and indents": (test) ->
     tokens = scan "<% else: %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
+    test.same ["beginCode", print: false, safe: false, inline: true], tokens.shift()
     test.same ["dedent"], tokens.shift()
     test.same ["recordCode", "else"], tokens.shift()
     test.same ["indent", undefined], tokens.shift()
@@ -63,7 +63,7 @@ module.exports =
   "'<% else if ...: %>' dedents, begins a code block, and indents": (test) ->
     tokens = scan "<% else if @projects: %>"
     test.same ["printString", ""], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
+    test.same ["beginCode", print: false, safe: false, inline: true], tokens.shift()
     test.same ["dedent"], tokens.shift()
     test.same ["recordCode", "else if @projects"], tokens.shift()
     test.same ["indent", undefined], tokens.shift()
@@ -72,21 +72,19 @@ module.exports =
   "<%% prints an escaped <% in data mode": (test) ->
     tokens = scan "a <%% b <%= '<%%' %>"
     test.same ["printString", "a <% b "], tokens.shift()
-    test.same ["beginCode", print: true, safe: false], tokens.shift()
+    test.same ["beginCode", print: true, safe: false, inline: true], tokens.shift()
     test.same ["recordCode", "'<%%'"], tokens.shift()
     test.done()
 
   "unexpected newline in code block": (test) ->
     tokens = scan "foo\nhello <% do 'thing'\n %>"
     test.same ["printString", "foo\nhello "], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
     test.same ["fail", "unexpected newline in code block"], tokens.shift()
     test.done()
 
   "unexpected end of template": (test) ->
     tokens = scan "foo\nhello <% do 'thing'"
     test.same ["printString", "foo\nhello "], tokens.shift()
-    test.same ["beginCode", print: false, safe: false], tokens.shift()
     test.same ["fail", "unexpected end of template"], tokens.shift()
     test.done()