diff --git a/packages/jupyter-ai/jupyter_ai/chat_handlers/generate.py b/packages/jupyter-ai/jupyter_ai/chat_handlers/generate.py
index 4b8dffc3e..1f633acf2 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)
+        return False
+    except (SyntaxError, ValueError):
+        return True
+
+
 def create_notebook(outline):
     """Create an nbformat Notebook object for a notebook outline."""
     nbf = nbformat.v4
@@ -213,14 +223,23 @@ def create_notebook(outline):
         for code_block in section["code"].split("\n\n"):
             nb["cells"].append(nbf.new_code_cell(code_block))
 
-    # Post process notebook for hanging cells: merge hanging cell with the previous cell
-    nb_cells = []
+    # Post process notebook for hanging code cells: merge hanging cell with the previous cell
+    merged_cells = []
     for cell in nb["cells"]:
-        if (cell["cell_type"] == "code") and (cell["source"][0] == " "):
-            nb_cells[-1]["source"] = nb_cells[-1]["source"] + "\n\n" + cell["source"]
+        # 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:
-            nb_cells.append(cell)
-    nb["cells"] = nb_cells
+            merged_cells.append(cell)
+
+    # Fix code cells that should be markdown
+    for j in range(len(merged_cells)):
+        if merged_cells[j]["cell_type"]=="code" and is_not_python_code(merged_cells[j]["source"]):
+            merged_cells[j]["cell_type"] = "markdown"
+
+    nb["cells"] = merged_cells
     return nb