diff --git a/addon/utils/compile-markdown.js b/addon/utils/compile-markdown.js
index a4c442c36..88f3c3c46 100644
--- a/addon/utils/compile-markdown.js
+++ b/addon/utils/compile-markdown.js
@@ -135,6 +135,7 @@ function compactParagraphs(tokens) {
 
     balance += count(/{{#/g, textWithoutCode);
     balance += count(/<[A-Z]/g, textWithoutCode);
+    balance -= count(/[A-Z][^<>]+\/>/g, textWithoutCode);
     balance -= count(/{{\//g, textWithoutCode);
     balance -= count(/<\/[A-Z]/g, textWithoutCode);
   }
diff --git a/tests-node/unit/utils/compile-markdown-test.js b/tests-node/unit/utils/compile-markdown-test.js
index 0552a2827..4223c3c3c 100644
--- a/tests-node/unit/utils/compile-markdown-test.js
+++ b/tests-node/unit/utils/compile-markdown-test.js
@@ -20,6 +20,38 @@ describe('Unit | compile-markdown', function(hooks) {
     assert.equal(result, expected);
   });
 
+  it('compacting sequential curly bracket paragraphs - non-void angle bracket children', function() {
+    let input = stripIndent`
+      {{#foo-bar}}<Foo></Foo>{{/foo-bar}}
+
+      {{#foo-bar}}<Foo></Foo>{{/foo-bar}}
+    `;
+
+    let result = compileMarkdown(input, { targetHandlebars: true });
+    let expected = stripIndent`
+      <div class="docs-md"><p>{{#foo-bar}}<Foo></Foo>{{/foo-bar}}</p>
+      <p>{{#foo-bar}}<Foo></Foo>{{/foo-bar}}</p></div>
+    `;
+
+    assert.equal(result, expected);
+  });
+
+  it('compacting sequential curly bracket paragraphs - self-closing angle bracket children', function() {
+    let input = stripIndent`
+      {{#foo-bar}}<Foo/>{{/foo-bar}}
+
+      {{#foo-bar}}<Foo></Foo>{{/foo-bar}}
+    `;
+
+    let result = compileMarkdown(input, { targetHandlebars: true });
+    let expected = stripIndent`
+      <div class="docs-md"><p>{{#foo-bar}}<Foo/>{{/foo-bar}}</p>
+      <p>{{#foo-bar}}<Foo></Foo>{{/foo-bar}}</p></div>
+    `;
+
+    assert.equal(result, expected);
+  });
+
   it('compacting angle bracket paragraphs', function() {
     let input = stripIndent`
       <FooBar>
@@ -38,6 +70,38 @@ describe('Unit | compile-markdown', function(hooks) {
     assert.equal(result, expected);
   });
 
+  it('compacting sequential angle bracket paragraphs - non-void angle bracket children', function() {
+    let input = stripIndent`
+      <Baz><Foo></Foo></Baz>
+
+      <Baz><Foo></Foo></Baz>
+    `;
+
+    let result = compileMarkdown(input, { targetHandlebars: true });
+    let expected = stripIndent`
+      <div class="docs-md"><p><Baz><Foo></Foo></Baz></p>
+      <p><Baz><Foo></Foo></Baz></p></div>
+    `;
+
+    assert.equal(result, expected);
+  });
+
+  it('compacting sequential angle bracket paragraphs - self-closing angle bracket children', function() {
+    let input = stripIndent`
+      <Baz><Foo/></Baz>
+
+      <Baz><Foo></Foo></Baz>
+    `;
+
+    let result = compileMarkdown(input, { targetHandlebars: true });
+    let expected = stripIndent`
+      <div class="docs-md"><p><Baz><Foo/></Baz></p>
+      <p><Baz><Foo></Foo></Baz></p></div>
+    `;
+
+    assert.equal(result, expected);
+  });
+
   it('compacting implicit code blocks', function() {
     // Surrounding whitespace + 4-space indent = code block in MD
     let input = stripIndent`