diff --git a/CHANGES.md b/CHANGES.md
index d8008741..e880d4fe 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -2,6 +2,7 @@
 
 ## python-markdown2 2.4.12 (not yet released)
 
+- [pull #547] Update `markdown-in-html` extra to handle markdown on same line as HTML (#546)
 - [pull #550] Fix tables with trailing whitespace not being recognized (#549)
 
 
diff --git a/lib/markdown2.py b/lib/markdown2.py
index 1ec7da20..6ea3901e 100755
--- a/lib/markdown2.py
+++ b/lib/markdown2.py
@@ -783,8 +783,15 @@ def _detab(self, text):
     def _hash_html_block_sub(self, match, raw=False):
         if isinstance(match, str):
             html = match
+            tag = None
         else:
             html = match.group(1)
+            try:
+                tag = match.group(2)
+            except IndexError:
+                tag = None
+
+        tag = tag or re.match(r'^<(\S).*?>', html).group(1)
 
         if raw and self.safe_mode:
             html = self._sanitize_html(html)
@@ -793,6 +800,10 @@ def _hash_html_block_sub(self, match, raw=False):
             m = self._html_markdown_attr_re.search(first_line)
             if m:
                 lines = html.split('\n')
+                if len(lines) < 3:  # if MD is on same line as HTML
+                    lines = re.split(r'(<%s.*markdown=.*?>)' % tag, lines[0])[1:] + lines[1:]
+                    first_line = lines[0]
+                    lines = lines[:-1] + re.split(r'(</%s>.*?$)' % tag, lines[-1])[:-1]
                 middle = '\n'.join(lines[1:-1])
                 last_line = lines[-1]
                 first_line = first_line[:m.start()] + first_line[m.end():]
diff --git a/test/tm-cases/markdown_in_html_on_same_line.html b/test/tm-cases/markdown_in_html_on_same_line.html
new file mode 100644
index 00000000..658e944b
--- /dev/null
+++ b/test/tm-cases/markdown_in_html_on_same_line.html
@@ -0,0 +1,23 @@
+<p>
+
+<p><strong>text</strong></p>
+
+</p>
+
+<p>
+
+<p><strong>text</strong></p>
+
+</p>
+
+<p>
+
+<p><strong>text</strong></p>
+
+</p>
+
+<p>
+
+<p><strong>text</strong></p>
+
+</p>
diff --git a/test/tm-cases/markdown_in_html_on_same_line.opts b/test/tm-cases/markdown_in_html_on_same_line.opts
new file mode 100644
index 00000000..25fea79f
--- /dev/null
+++ b/test/tm-cases/markdown_in_html_on_same_line.opts
@@ -0,0 +1 @@
+{"extras": ["markdown-in-html"]}
diff --git a/test/tm-cases/markdown_in_html_on_same_line.text b/test/tm-cases/markdown_in_html_on_same_line.text
new file mode 100644
index 00000000..09de8a4a
--- /dev/null
+++ b/test/tm-cases/markdown_in_html_on_same_line.text
@@ -0,0 +1,12 @@
+<p markdown="1">**text**</p>
+
+
+<p markdown="1">
+**text**</p>
+
+<p markdown="1">**text**
+</p>
+
+<p markdown="1">
+**text**
+</p>