diff --git a/src/main/java/com/samskivert/mustache/Mustache.java b/src/main/java/com/samskivert/mustache/Mustache.java
index 2a09c43..2c69f41 100644
--- a/src/main/java/com/samskivert/mustache/Mustache.java
+++ b/src/main/java/com/samskivert/mustache/Mustache.java
@@ -336,14 +336,14 @@ public class Mustache
             int v;
             while ((v = nextChar()) != -1) {
                 char c = (char)v;
-                if (c == '\n') {
+                if (c == '\r' && skipNewline) {
+                    // skip this \r and stay in skip newline mode
+                    continue;
+                } else if (c == '\n') {
                     column = 0;
                     line++;
-                    // skip this newline character if we're configured to do so; TODO: handle CR
+                    // skip this newline character if we're configured to do so
                     if (skipNewline) {
-                        // if the preceding character is '\r', strip that off too
-                        int lastIdx = text.length()-1;
-                        if (lastIdx >= 0 && text.charAt(lastIdx) == '\r') text.setLength(lastIdx);
                         skipNewline = false;
                         continue;
                     }
@@ -619,7 +619,7 @@ public class Mustache
         }
 
         protected static void requireNoNewlines (String tag, int line) {
-            if (tag.indexOf("\n") != -1 || tag.indexOf("\r") != -1) {
+            if (tag.indexOf('\n') != -1 || tag.indexOf('\r') != -1) {
                 throw new MustacheParseException(
                     "Invalid tag name: contains newline '" + tag + "'", line);
             }
diff --git a/src/test/java/com/samskivert/mustache/MustacheTest.java b/src/test/java/com/samskivert/mustache/MustacheTest.java
index bba2bf0..d57024f 100644
--- a/src/test/java/com/samskivert/mustache/MustacheTest.java
+++ b/src/test/java/com/samskivert/mustache/MustacheTest.java
@@ -447,6 +447,25 @@ public class MustacheTest
              "endlist", tmpl, context("items", Collections.emptyList()));
     }
 
+    @Test public void testNewlineSkippingCRLF () {
+        String tmpl = "list:\r\n" +
+            "{{#items}}\r\n" +
+            "{{this}}\r\n" +
+            "{{/items}}\r\n" +
+            "{{^items}}\r\n" +
+            "no items\r\n" +
+            "{{/items}}\r\n" +
+            "endlist";
+        test("list:\r\n" +
+             "one\r\n" +
+             "two\r\n" +
+             "three\r\n" +
+             "endlist", tmpl, context("items", Arrays.asList("one", "two", "three")));
+        test("list:\r\n" +
+             "no items\r\n" +
+             "endlist", tmpl, context("items", Collections.emptyList()));
+    }
+
     @Test public void testNewlineNonSkipping () {
         // only when a section tag is by itself on a line should we absorb the newline following it
         String tmpl = "thing?: {{#thing}}yes{{/thing}}{{^thing}}no{{/thing}}\n" +