diff --git a/lib/slime/parser/embedded_engine.ex b/lib/slime/parser/embedded_engine.ex
index 9614357..71c5224 100644
--- a/lib/slime/parser/embedded_engine.ex
+++ b/lib/slime/parser/embedded_engine.ex
@@ -6,7 +6,7 @@ defmodule Slime.Parser.EmbeddedEngine do
   @type parser_tag :: binary | {:eex | binary, Keyword.t}
   @callback render(binary, Keyword.t) :: parser_tag
 
-  import Slime.Compiler, only: [compile: 1]
+  import Slime.Parser.TextBlock, only: [render_content: 2]
 
   @engines %{
     javascript: Slime.Parser.EmbeddedEngine.Javascript,
@@ -16,37 +16,22 @@ defmodule Slime.Parser.EmbeddedEngine do
   }
   |> Map.merge(Application.get_env(:slime, :embedded_engines, %{}))
   |> Enum.into(%{}, fn ({key, value}) -> {to_string(key), value} end)
+  @registered_engines Map.keys(@engines)
 
-  def render_with_engine(engine, line_contents) when is_list(line_contents) do
-    lines = Enum.map(line_contents, &compile/1)
-    embedded_text = case lines do
-      [] -> ""
-      [line | _] ->
-        strip_indent = indent(line)
-        lines
-        |> Enum.map(&strip_line(&1, strip_indent))
-        |> Enum.join("\n")
-    end
+  def parse(engine, lines) when engine in @registered_engines do
+    embedded_text = render_content(lines, 0)
 
-    render_with_engine(engine, embedded_text)
+    {:ok, render_with_engine(engine, embedded_text)}
   end
-
-  def render_with_engine(engine, embedded_text) do
-    keep_lines = Application.get_env(:slime, :keep_lines)
-    embedded_text = if keep_lines do
-      "\n" <> embedded_text
-    else
-      embedded_text
-    end
-    apply(@engines[engine], :render, [embedded_text, [keep_lines: keep_lines]])
+  def parse(engine, _) do
+    {:error, ~s(Unknown embedded engine "#{engine}")}
   end
 
-  defp indent(line) do
-    String.length(line) - String.length(String.lstrip(line))
-  end
+  defp render_with_engine(engine, text) do
+    keep_lines = Application.get_env(:slime, :keep_lines)
+    text = if keep_lines, do: ["\n" | text], else: text
 
-  defp strip_line(line, strip_indent) do
-    String.slice(line, min(strip_indent, indent(line))..-1)
+    apply(@engines[engine], :render, [text, [keep_lines: keep_lines]])
   end
 end
 
@@ -57,7 +42,7 @@ defmodule Slime.Parser.EmbeddedEngine.Javascript do
 
   @behaviour Slime.Parser.EmbeddedEngine
 
-  def render(text, _options), do: {"script", children: [text]}
+  def render(text, _options), do: {"script", children: text}
 end
 
 defmodule Slime.Parser.EmbeddedEngine.Css do
@@ -68,7 +53,7 @@ defmodule Slime.Parser.EmbeddedEngine.Css do
   @behaviour Slime.Parser.EmbeddedEngine
 
   def render(text, _options) do
-    {"style", attributes: [type: "text/css"], children: [text]}
+    {"style", attributes: [type: "text/css"], children: text}
   end
 end
 
@@ -83,13 +68,18 @@ defmodule Slime.Parser.EmbeddedEngine.Elixir do
 
   def render(text, options) do
     newlines = if options[:keep_lines] do
-      count = text |> String.split("\n") |> length |> Kernel.-(1)
+      count = Enum.count(text, &Kernel.==(&1, "\n"))
       [String.duplicate("\n", count)]
     else
       []
     end
 
-    %EExNode{content: text, children: newlines}
+    eex = Enum.map_join(text, fn
+      ({:eex, interpolation}) -> ~S"#{" <> interpolation <> "}"
+      (text) -> text
+    end)
+
+    %EExNode{content: eex, children: newlines}
   end
 end
 
diff --git a/lib/slime/parser/text_block.ex b/lib/slime/parser/text_block.ex
index cc680fa..47ca9a2 100644
--- a/lib/slime/parser/text_block.ex
+++ b/lib/slime/parser/text_block.ex
@@ -41,7 +41,7 @@ defmodule Slime.Parser.TextBlock do
   defp insert_line_spacing(lines, text_indent) do
     concat_lines(lines,
       fn({line_indent, line_contents}, content) ->
-        leading_space = String.duplicate(" ", line_indent - text_indent)
+        leading_space = String.duplicate(" ", max(0, line_indent - text_indent))
         case leading_space do
           "" -> ["\n" | line_contents ++ content]
           _  -> ["\n" | [leading_space | line_contents ++ content]]
diff --git a/lib/slime/parser/transform.ex b/lib/slime/parser/transform.ex
index 98f5719..ead7ef4 100644
--- a/lib/slime/parser/transform.ex
+++ b/lib/slime/parser/transform.ex
@@ -17,6 +17,8 @@ defmodule Slime.Parser.Transform do
   alias Slime.Parser.Nodes.InlineHTMLNode
   alias Slime.Parser.Nodes.DoctypeNode
 
+  alias Slime.TemplateSyntaxError
+
   @default_tag Application.get_env(:slime, :default_tag, "div")
   @sort_attrs Application.get_env(:slime, :sort_attrs, true)
   @merge_attrs Application.get_env(:slime, :merge_attrs, %{"class" => " "})
@@ -142,24 +144,26 @@ defmodule Slime.Parser.Transform do
     end
   end
 
-  def transform(:text_block_line, [space, content], _index) do
-    {indent_size(space), content}
+  def transform(:embedded_engine, [engine, _, content], index) do
+    case EmbeddedEngine.parse(engine, content[:lines]) do
+      {:ok, {tag, content}} ->
+        %HTMLNode{name: tag,
+          attributes: (content[:attributes] || []),
+          children: content[:children]}
+      {:ok, content} -> content
+      {:error, message} ->
+        {{:line, line_number}, {:column, column}} = index
+        raise TemplateSyntaxError, message: message,
+          line: "", line_number: line_number, column: column
+    end
   end
 
-  def transform(:embedded_engine, [engine, _, content], _index) do
-    lines = content[:lines]
-    case EmbeddedEngine.render_with_engine(engine, lines) do
-      {tag, content} -> %HTMLNode{name: tag,
-        attributes: (content[:attributes] || []),
-        children: content[:children]}
-      content -> content
-    end
+  def transform(:embedded_engine_lines, [first_line, rest], _index) do
+    [first_line | Enum.map(rest, fn ([_, lines]) -> lines end)]
   end
 
-  def transform(:embedded_engine_lines, input, _index) do
-    [line, rest] = input
-    lines = Enum.map(rest, fn ([_, lines]) -> lines end)
-    [line | lines]
+  def transform(:indented_text_line, [space, content], _index) do
+    {indent_size(space), content}
   end
 
   def transform(:inline_html, [_, content, children], _index) do
diff --git a/src/slime_parser.peg.eex b/src/slime_parser.peg.eex
index 3cf0e82..5b6e0ea 100644
--- a/src/slime_parser.peg.eex
+++ b/src/slime_parser.peg.eex
@@ -82,15 +82,16 @@ code_comment <- '/' text_block;
 
 verbatim_text <- indent:space? type:[|'] content:text_block;
 
-text_block <- text_block_line (crlf
+text_block <- indented_text_line (crlf
   indent lines:text_block_nested_lines dedent)?;
-text_block_nested_lines <- text_block_line (crlf (
+text_block_nested_lines <- indented_text_line (crlf (
   indent lines:text_block_nested_lines dedent / lines:text_block_nested_lines
 ))*;
-text_block_line <- space? text_item*;
 
 embedded_engine <- tag_name ':' (crlf indent lines:embedded_engine_lines dedent);
-embedded_engine_lines <- text_item* (crlf text_item*)*;
+embedded_engine_lines <- indented_text_line (crlf indented_text_line)*;
+
+indented_text_line <- space? text_item*;
 
 tag_name <- [a-zA-Z0-9_-]+;
 attribute_name <- [a-zA-Z0-9_@:-]+;
diff --git a/test/rendering/embedded_engine_test.exs b/test/rendering/embedded_engine_test.exs
index 8305083..6dd39c5 100644
--- a/test/rendering/embedded_engine_test.exs
+++ b/test/rendering/embedded_engine_test.exs
@@ -90,14 +90,16 @@ defmodule RenderEmbeddedEngineTest do
   end
 
   test "render embedded elixir" do
-    slime = """
+    slime = ~S"""
     elixir:
       a =
         [1, 2, 3]
         |> Enum.map(&(&1 * &1))
-    = Enum.join(a, ",")
+      b = "test"
+      c = " and #{b}"
+    = Enum.join(a, ",") <> c
     """
-    assert render(slime) == ~s(1,4,9)
+    assert render(slime) == ~s(1,4,9 and test)
   end
 
   test "render embedded eex" do
@@ -108,6 +110,17 @@ defmodule RenderEmbeddedEngineTest do
     assert render(slime) == ~s(Test: test)
   end
 
+  test "raises an error for unknown engines" do
+    assert_raise Slime.TemplateSyntaxError,
+                 ~r/Unknown embedded engine \"textile\"/, fn ->
+      render """
+      p
+        textile:
+          *Textile* is _easy_ to read and _easy_ to write
+      """
+    end
+  end
+
   defmodule TestEngine do
     @moduledoc false
     @behaviour Slime.Parser.EmbeddedEngine