diff --git a/plugins/yaml/src/org/jetbrains/yaml/psi/impl/YAMLScalarTextImpl.java b/plugins/yaml/src/org/jetbrains/yaml/psi/impl/YAMLScalarTextImpl.java
index e4051676f45d..526bc224b639 100644
--- a/plugins/yaml/src/org/jetbrains/yaml/psi/impl/YAMLScalarTextImpl.java
+++ b/plugins/yaml/src/org/jetbrains/yaml/psi/impl/YAMLScalarTextImpl.java
@@ -57,11 +57,16 @@ public class YAMLScalarTextImpl extends YAMLBlockScalarImpl implements YAMLScala
     final String indentString = StringUtil.repeatSymbol(' ', indent);
 
     final List<Pair<TextRange, String>> result = new ArrayList<>();
+    
     int currentLength = 0;
+    boolean currentLineIsIndented = input.length() > 0 && input.charAt(0) == ' ';
     for (int i = 0; i < input.length(); ++i) {
       if (input.charAt(i) == '\n') {
         final String replacement;
-        if (i + 1 >= input.length() || YAMLGrammarCharUtil.isSpaceLike(input.charAt(i + 1))) {
+        if (i + 1 >= input.length() ||
+            YAMLGrammarCharUtil.isSpaceLike(input.charAt(i + 1)) ||
+            input.charAt(i + 1) == '\n' ||
+            currentLineIsIndented) {
           replacement = "\n" + indentString;
         }
         else {
@@ -70,6 +75,7 @@ public class YAMLScalarTextImpl extends YAMLBlockScalarImpl implements YAMLScala
         
         result.add(Pair.create(TextRange.from(i, 1), replacement));
         currentLength = 0;
+        currentLineIsIndented = i + 1 < input.length() && input.charAt(i + 1) == ' ';
         continue;
       }