diff --git a/packages/jupyter-ai/jupyter_ai/chat_handlers/generate.py b/packages/jupyter-ai/jupyter_ai/chat_handlers/generate.py
index a69b5ed28..6318e0979 100644
--- a/packages/jupyter-ai/jupyter_ai/chat_handlers/generate.py
+++ b/packages/jupyter-ai/jupyter_ai/chat_handlers/generate.py
@@ -1,3 +1,4 @@
+import ast
 import asyncio
 import os
 import time
@@ -198,6 +199,15 @@ async def afill_outline(outline, llm, verbose=False):
     await asyncio.gather(*all_coros)
 
 
+# Check if the content of the cell is python code or not
+def is_not_python_code(source: str) -> bool:
+    try:
+        ast.parse(source)
+    except:
+        return True
+    return False
+
+
 def create_notebook(outline):
     """Create an nbformat Notebook object for a notebook outline."""
     nbf = nbformat.v4
@@ -212,6 +222,26 @@ def create_notebook(outline):
         nb["cells"].append(nbf.new_markdown_cell("## " + section["title"]))
         for code_block in section["code"].split("\n\n"):
             nb["cells"].append(nbf.new_code_cell(code_block))
+
+    # Post process notebook for hanging code cells: merge hanging cell with the previous cell
+    merged_cells = []
+    for cell in nb["cells"]:
+        # Fix a hanging code cell
+        follows_code_cell = merged_cells and merged_cells[-1]["cell_type"] == "code"
+        is_incomplete = cell["cell_type"] == "code" and cell["source"].startswith(" ")
+        if follows_code_cell and is_incomplete:
+            merged_cells[-1]["source"] = (
+                merged_cells[-1]["source"] + "\n\n" + cell["source"]
+            )
+        else:
+            merged_cells.append(cell)
+
+    # Fix code cells that should be markdown
+    for cell in merged_cells:
+        if cell["cell_type"] == "code" and is_not_python_code(cell["source"]):
+            cell["cell_type"] = "markdown"
+
+    nb["cells"] = merged_cells
     return nb