diff --git a/ICSharpCode.NRefactory.CSharp/Formatter/CSharpIndentEngine.cs b/ICSharpCode.NRefactory.CSharp/Formatter/CSharpIndentEngine.cs
new file mode 100644
index 0000000000..b6a300817a
--- /dev/null
+++ b/ICSharpCode.NRefactory.CSharp/Formatter/CSharpIndentEngine.cs
@@ -0,0 +1,324 @@
+using System;
+using ICSharpCode.NRefactory.Editor;
+using System.Text;
+
+namespace ICSharpCode.NRefactory.CSharp
+{
+	public class CSharpIndentEngine
+	{
+		readonly IDocument document;
+		readonly CSharpFormattingOptions options;
+		readonly TextEditorOptions textEditorOptions;
+		readonly StringBuilder wordBuf = new StringBuilder();
+		Indent thisLineindent;
+		Indent indent;
+
+		public string ThisLineIndent {
+			get {
+				return thisLineindent.IndentString;
+			}
+		}
+
+		public string NewLineIndent {
+			get {
+				return indent.IndentString;
+			}
+		}
+
+		public CSharpIndentEngine(IDocument document, TextEditorOptions textEditorOptions, CSharpFormattingOptions formattingOptions)
+		{
+			this.document = document;
+			this.options = formattingOptions;
+			this.textEditorOptions = textEditorOptions;
+			this.indent = new Indent(textEditorOptions);
+			this.thisLineindent = new Indent(textEditorOptions);
+		}
+
+		int offset;
+
+		void Reset()
+		{
+			offset = 0;
+			thisLineindent.Reset();
+			indent.Reset();
+			pc = '\0';
+			IsLineStart = true;
+			addContinuation = false;
+			inside = Inside.Empty;
+			nextBody = currentBody = Body.None;
+		}
+
+		public void UpdateToOffset (int toOffset)
+		{
+			if (toOffset < offset)
+				Reset();
+			for (int i = offset; i < toOffset; i++)
+				Push(document.GetCharAt(i));
+		}
+
+		Inside inside = Inside.Empty;
+		bool IsLineStart = true;
+
+		bool IsInStringOrChar {
+			get {
+				return inside.HasFlag (Inside.StringOrChar);
+			}
+		}
+
+		bool IsInComment {
+			get {
+				return inside.HasFlag (Inside.Comment);
+			}
+		}
+
+		[Flags]
+		public enum Inside {
+			Empty              = 0,
+			
+			PreProcessor       = (1 << 0),
+			
+			MultiLineComment   = (1 << 1),
+			LineComment        = (1 << 2),
+			DocComment         = (1 << 11),
+			Comment            = (MultiLineComment | LineComment | DocComment),
+			
+			VerbatimString     = (1 << 3),
+			StringLiteral      = (1 << 4),
+			CharLiteral        = (1 << 5),
+			String             = (VerbatimString | StringLiteral),
+			StringOrChar       = (String | CharLiteral),
+			
+			Attribute          = (1 << 6),
+			ParenList          = (1 << 7),
+			
+			FoldedStatement    = (1 << 8),
+			Block              = (1 << 9),
+			Case               = (1 << 10),
+			
+			FoldedOrBlock      = (FoldedStatement | Block),
+			FoldedBlockOrCase  = (FoldedStatement | Block | Case)
+		}
+
+		char pc;
+		int parens = 0;
+		void Push(char ch)
+		{
+			if (inside.HasFlag (Inside.VerbatimString) && pc == '"' && ch != '"') {
+				inside &= ~Inside.String;
+			}
+			Console.WriteLine(ch);
+			switch (ch) {
+				case '#':
+					if (IsLineStart)
+						inside = Inside.PreProcessor;
+					break;
+				case '/':
+					if (IsInStringOrChar)
+						break;
+					if (pc == '/') {
+						if (inside.HasFlag (Inside.Comment)) {
+							inside |= Inside.DocComment;
+						} else {
+							inside |= Inside.Comment;
+						}
+					}
+					break;
+				case '*':
+					if (IsInStringOrChar || IsInComment)
+						break;
+					if (pc == '/')
+						inside |= Inside.MultiLineComment;
+					break;
+				case '\n':
+				case '\r':
+					inside &= ~(Inside.Comment | Inside.String | Inside.CharLiteral | Inside.PreProcessor);
+					CheckKeyword(wordBuf.ToString());
+					wordBuf.Length = 0;
+					if (addContinuation) {
+						indent.Push (IndentType.Continuation);
+					}
+					thisLineindent = indent.Clone ();
+					addContinuation = false;
+					IsLineStart = true;
+					break;
+				case '"':
+					if (IsInComment)
+						break;
+					if (inside.HasFlag (Inside.String)) {
+						if (pc != '\\')
+							inside &= ~Inside.String;
+						break;
+					}
+
+					if (pc =='@') {
+						inside |= Inside.VerbatimString;
+					} else {
+						inside |= Inside.String;
+					}
+					break;
+				case '<':
+				case '[':
+				case '(':
+					if (IsInComment || IsInStringOrChar)
+						break;
+					parens++;
+					indent.Push (IndentType.Block);
+					break;
+				case '>':
+				case ']':
+				case ')':
+					if (IsInComment || IsInStringOrChar)
+						break;
+					parens--;
+					indent.Pop ();
+					break;
+				case '{':
+					if (IsInComment || IsInStringOrChar)
+						break;
+					currentBody = nextBody;
+					if (indent.Count > 0 && indent.Peek() == IndentType.Continuation)
+						indent.Pop();
+					addContinuation = false;
+					AddIndentation (currentBody);
+					break;
+				case '}':
+					if (IsInComment || IsInStringOrChar)
+						break;
+					indent.Pop ();
+					if (indent.Count > 0 && indent.Peek() == IndentType.Continuation)
+						indent.Pop();
+					break;
+				case ';':
+					if (indent.Count > 0 && indent.Peek() == IndentType.Continuation)
+						indent.Pop();
+					break;
+				case '\'':
+					if (IsInComment || inside.HasFlag (Inside.String))
+						break;
+					if (inside.HasFlag (Inside.CharLiteral)) {
+						if (pc != '\\')
+							inside &= ~Inside.CharLiteral;
+					} else {
+						inside &= Inside.CharLiteral;
+					}
+					break;
+			}
+
+			if (!IsInComment && !IsInStringOrChar) {
+				if ((wordBuf.Length == 0 ? char.IsLetter(ch) : char.IsLetterOrDigit(ch)) || ch == '_') {
+					wordBuf.Append(ch);
+				} else {
+					CheckKeyword(wordBuf.ToString());
+					wordBuf.Length = 0;
+				}
+			}
+			if (addContinuation) {
+				indent.Push (IndentType.Continuation);
+				addContinuation = false;
+			}
+			IsLineStart &= ch == ' ' || ch == '\t' || ch == '\n' || ch == '\r';
+			pc = ch;
+		}
+
+
+		void AddIndentation(BraceStyle braceStyle)
+		{
+			switch (braceStyle) {
+				case BraceStyle.DoNotChange:
+				case BraceStyle.EndOfLine:
+				case BraceStyle.EndOfLineWithoutSpace:
+				case BraceStyle.NextLine:
+				case BraceStyle.NextLineShifted:
+				case BraceStyle.BannerStyle:
+					indent.Push (IndentType.Block);
+					break;
+				
+				case BraceStyle.NextLineShifted2:
+					indent.Push (IndentType.DoubleBlock);
+					break;
+			}
+		}
+
+		void AddIndentation(Body body)
+		{
+			switch (body) {
+				case Body.None:
+					indent.Push (IndentType.Block);
+					break;
+				case Body.Namespace:
+					AddIndentation (options.NamespaceBraceStyle);
+					break;
+				case Body.Class:
+					AddIndentation (options.ClassBraceStyle);
+					break;
+				case Body.Struct:
+					AddIndentation (options.StructBraceStyle);
+					break;
+				case Body.Interface:
+					AddIndentation (options.InterfaceBraceStyle);
+					break;
+				case Body.Enum:
+					AddIndentation (options.EnumBraceStyle);
+					break;
+				case Body.Switch:
+					if (options.IndentSwitchBody)
+						indent.Push (IndentType.Empty);
+					break;
+				default:
+					throw new ArgumentOutOfRangeException();
+			}
+		}
+
+		enum Body
+		{
+			None,
+			Namespace,
+			Class, Struct, Interface, Enum,
+			Switch
+		}
+
+		Body currentBody;
+		Body nextBody;
+		bool addContinuation;
+		void CheckKeyword (string keyword)
+		{
+			switch (currentBody) {
+				case Body.None:
+					if (keyword == "namespace") {
+						nextBody = Body.Namespace;
+						return;
+					}
+					goto case Body.Namespace;
+				case Body.Namespace:
+					if (keyword == "class") {
+						nextBody = Body.Class;
+						return;
+					}
+					if (keyword == "enum") {
+						nextBody = Body.Enum;
+						return;
+					}
+					if (keyword == "struct") {
+						nextBody = Body.Struct;
+						return;
+					}
+					if (keyword == "interface") {
+						nextBody = Body.Interface;
+						return;
+					}
+					break;
+				case Body.Class:
+				case Body.Enum:
+				case Body.Struct:
+				case Body.Interface:
+					if (keyword == "switch")
+						nextBody = Body.Switch;
+					if (keyword == "do" || keyword == "if" || keyword == "for" || keyword == "foreach" || keyword == "while") {
+						addContinuation = true;
+					}
+					break;
+			}
+		}
+	}
+}
+
diff --git a/ICSharpCode.NRefactory.CSharp/Formatter/Indent.cs b/ICSharpCode.NRefactory.CSharp/Formatter/Indent.cs
index 1db659b8f0..27f31e7ebc 100644
--- a/ICSharpCode.NRefactory.CSharp/Formatter/Indent.cs
+++ b/ICSharpCode.NRefactory.CSharp/Formatter/Indent.cs
@@ -30,8 +30,10 @@ namespace ICSharpCode.NRefactory.CSharp
 {
 	public enum IndentType {
 		Block,
+		DoubleBlock,
 		Continuation,
-		Label
+		Label,
+		Empty
 	}
 
 	public class Indent
@@ -44,8 +46,28 @@ namespace ICSharpCode.NRefactory.CSharp
 		public Indent(TextEditorOptions options)
 		{
 			this.options = options;
+			Reset();
 		}
 
+		Indent(TextEditorOptions options, Stack<IndentType> indentStack, int curIndent) : this(options)
+		{
+			this.indentStack = indentStack;
+			this.curIndent = curIndent;
+		}
+
+		public Indent Clone()
+		{
+			var result = new Indent(options, new Stack<IndentType> (indentStack), curIndent);
+			result.indentString = indentString;
+			return result;
+		}
+
+		public void Reset()
+		{
+			curIndent = 0;
+			indentString = "";
+			indentStack.Clear();
+		}
 
 		public void Push(IndentType type)
 		{
@@ -60,15 +82,30 @@ namespace ICSharpCode.NRefactory.CSharp
 			Update();
 		}
 
+		public int Count {
+			get {
+				return indentStack.Count;
+			}
+		}
+
+		public IndentType Peek ()
+		{
+			return indentStack.Peek();
+		}
+
 		int GetIndent(IndentType indentType)
 		{
 			switch (indentType) {
 				case IndentType.Block:
 					return options.IndentSize;
+				case IndentType.DoubleBlock:
+					return options.IndentSize * 2;
 				case IndentType.Continuation:
 					return options.ContinuationIndent;
 				case IndentType.Label:
 					return options.LabelIndent;
+				case IndentType.Empty:
+					return 0;
 				default:
 					throw new ArgumentOutOfRangeException();
 			}
diff --git a/ICSharpCode.NRefactory.CSharp/ICSharpCode.NRefactory.CSharp.csproj b/ICSharpCode.NRefactory.CSharp/ICSharpCode.NRefactory.CSharp.csproj
index 8d788bbac9..72477e16a5 100644
--- a/ICSharpCode.NRefactory.CSharp/ICSharpCode.NRefactory.CSharp.csproj
+++ b/ICSharpCode.NRefactory.CSharp/ICSharpCode.NRefactory.CSharp.csproj
@@ -505,6 +505,7 @@
     <Compile Include="Refactoring\CodeActions\ConvertToInitializer\AccessPath.cs" />
     <Compile Include="Refactoring\LocalReferenceFinder.cs" />
     <Compile Include="Refactoring\CodeActions\SortUsingsAction.cs" />
+    <Compile Include="Formatter\CSharpIndentEngine.cs" />
   </ItemGroup>
   <ItemGroup>
     <ProjectReference Include="..\ICSharpCode.NRefactory\ICSharpCode.NRefactory.csproj">
diff --git a/ICSharpCode.NRefactory.Tests/ICSharpCode.NRefactory.Tests.csproj b/ICSharpCode.NRefactory.Tests/ICSharpCode.NRefactory.Tests.csproj
index 8a81b60746..c36d411fd7 100644
--- a/ICSharpCode.NRefactory.Tests/ICSharpCode.NRefactory.Tests.csproj
+++ b/ICSharpCode.NRefactory.Tests/ICSharpCode.NRefactory.Tests.csproj
@@ -362,6 +362,7 @@
     <Compile Include="CSharp\CodeIssues\RedundantWhereWithPredicateIssueTests.cs" />
     <Compile Include="CSharp\CodeActions\SortUsingsTests.cs" />
     <Compile Include="CSharp\CodeActions\CreateEventInvocatorTests.cs" />
+    <Compile Include="IndentationTests\IndentationTests.cs" />
   </ItemGroup>
   <ItemGroup>
     <ProjectReference Include="..\..\Mono.Cecil\Mono.Cecil.csproj">
diff --git a/ICSharpCode.NRefactory.Tests/IndentationTests/IndentationTests.cs b/ICSharpCode.NRefactory.Tests/IndentationTests/IndentationTests.cs
new file mode 100644
index 0000000000..8507fa04d4
--- /dev/null
+++ b/ICSharpCode.NRefactory.Tests/IndentationTests/IndentationTests.cs
@@ -0,0 +1,173 @@
+using System;
+
+using System;
+using System.IO;
+using NUnit.Framework;
+using ICSharpCode.NRefactory.CSharp;
+using ICSharpCode.NRefactory.Editor;
+using System.Text;
+
+namespace ICSharpCode.NRefactory.CSharp.Indentation
+{
+	[TestFixture]
+	public class IndentationTests
+	{
+		static CSharpIndentEngine CreateEngine (string text)
+		{
+			var policy = FormattingOptionsFactory.CreateMono ();
+
+			var sb = new StringBuilder();
+			int offset = 0;
+			for (int i = 0; i < text.Length; i++) {
+				var ch = text [i];
+				if (ch == '$') {
+					offset = i;
+					continue;
+				}
+				sb.Append (ch);
+			}
+			var document = new ReadOnlyDocument(sb.ToString ());
+
+			var options = new TextEditorOptions();
+
+			var result = new CSharpIndentEngine(document, options, policy);
+			result.UpdateToOffset(offset);
+			return result;
+		}
+
+		[Test]
+		public void TestNamespaceIndent ()
+		{
+			var indent = CreateEngine("namespace Foo {$");
+			Assert.AreEqual("", indent.ThisLineIndent);
+			Assert.AreEqual("\t", indent.NewLineIndent);
+		}
+
+		[Ignore ("TODO")]
+		[Test]
+		public void TestPreProcessorDirectives ()
+		{
+			var indent = CreateEngine(@"
+namespace Foo {
+	class Foo {
+#if NOTTHERE
+	{
+#endif
+		$");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t", indent.NewLineIndent);
+		}
+
+		[Test]
+		public void TestIf ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		if (true)$");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t\t", indent.NewLineIndent);
+		}
+
+		[Test]
+		public void TestFor ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		for (;;)$");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t\t", indent.NewLineIndent);
+		}
+
+		[Test]
+		public void TestForEach ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		foreach (;;)$");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t\t", indent.NewLineIndent);
+		}
+
+
+		[Test]
+		public void TestDo ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		do
+$");
+			Assert.AreEqual("\t\t\t", indent.ThisLineIndent);
+		}
+
+		[Test]
+		public void TestNestedDo ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		do do
+$");
+			Assert.AreEqual("\t\t\t\t", indent.ThisLineIndent);
+		}
+
+		[Test]
+		public void TestNestedDoContinuationSetBack ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		do do do
+foo();$");
+			Assert.AreEqual("\t\t\t\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t\t\t", indent.NewLineIndent);
+		}
+
+		[Test]
+		public void TestWhile ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		while(true)$");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t\t", indent.NewLineIndent);
+		}
+
+		[Ignore ("TODO")]
+		[Test]
+		public void TestParameters ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		Foo(true,$");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t    ", indent.NewLineIndent);
+		}
+
+		[Test]
+		public void TestParametersCase2 ()
+		{
+			var indent = CreateEngine(@"
+class Foo {
+	void Test ()
+	{
+		Foo($");
+			Assert.AreEqual("\t\t", indent.ThisLineIndent);
+			Assert.AreEqual("\t\t\t", indent.NewLineIndent);
+		}
+	}
+}
+