diff --git a/markdown/preprocessors.py b/markdown/preprocessors.py
index 4a1fac5f6..ed11c3903 100644
--- a/markdown/preprocessors.py
+++ b/markdown/preprocessors.py
@@ -174,9 +174,10 @@ def _nested_markdown_in_html(self, items):
                 else:  # raw html
                     if len(items) - right_listindex <= 1:  # last element
                         right_listindex -= 1
+                    offset = 1 if i == right_listindex else 0
                     placeholder = self.markdown.htmlStash.store('\n\n'.join(
-                        items[i:right_listindex + 1]))
-                    del items[i:right_listindex + 1]
+                        items[i:right_listindex + offset]))
+                    del items[i:right_listindex + offset]
                     items.insert(i, placeholder)
         return items
 
diff --git a/tests/extensions/extra/raw-html.html b/tests/extensions/extra/raw-html.html
index f8874c388..7acb2eeb7 100644
--- a/tests/extensions/extra/raw-html.html
+++ b/tests/extensions/extra/raw-html.html
@@ -27,11 +27,18 @@
 Raw html blocks may also be nested.
 </div>
 
-
-
 </div>
 <p>This text is after the markdown in html.</p>
 <div name="issue308">
 <p><span>1</span>
 <span>2</span></p>
-</div>
\ No newline at end of file
+</div>
+<div name="issue368">
+<p>Markdown is <em>active</em> here.</p>
+<div name="RawHtml">
+Raw html blocks may also be nested.
+</div>
+
+<p>Markdown is <em>still</em> active here.</p>
+</div>
+<p>Markdown is <em>active again</em> here.</p>
\ No newline at end of file
diff --git a/tests/extensions/extra/raw-html.txt b/tests/extensions/extra/raw-html.txt
index 0a82ccf70..72f530b99 100644
--- a/tests/extensions/extra/raw-html.txt
+++ b/tests/extensions/extra/raw-html.txt
@@ -51,3 +51,17 @@ This text is after the markdown in html.
 <span>2</span>
 
 </div>
+
+<div markdown="1" name="issue368">
+
+Markdown is *active* here.
+
+<div name="RawHtml">
+Raw html blocks may also be nested.
+</div>
+
+Markdown is *still* active here.
+
+</div>
+
+Markdown is *active again* here.