diff --git a/jekyll.gemspec b/jekyll.gemspec
index 1d39d222..cd395683 100644
--- a/jekyll.gemspec
+++ b/jekyll.gemspec
@@ -28,7 +28,7 @@ Gem::Specification.new do |s|
   s.add_runtime_dependency('directory_watcher', "~> 1.1")
   s.add_runtime_dependency('maruku', "~> 0.5")
   s.add_runtime_dependency('kramdown', "~> 0.13.4")
-  s.add_runtime_dependency('pygments.rb', "~> 0.2.12")
+  s.add_runtime_dependency('pygments.rb', "~> 0.3.2")
 
   s.add_development_dependency('rake', "~> 0.9")
   s.add_development_dependency('rdoc', "~> 3.11")
@@ -38,7 +38,7 @@ Gem::Specification.new do |s|
   s.add_development_dependency('cucumber', "1.1")
   s.add_development_dependency('RedCloth', "~> 4.2")
   s.add_development_dependency('rdiscount', "~> 1.6")
-  s.add_development_dependency('redcarpet', "~> 1.9")
+  s.add_development_dependency('redcarpet', "~> 2.1.1")
   
   # = MANIFEST =
   s.files = %w[
diff --git a/lib/jekyll/converters/markdown.rb b/lib/jekyll/converters/markdown.rb
index cb94c8d0..3c6ba539 100644
--- a/lib/jekyll/converters/markdown.rb
+++ b/lib/jekyll/converters/markdown.rb
@@ -8,12 +8,28 @@ module Jekyll
 
     def setup
       return if @setup
-      # Set the Markdown interpreter (and Maruku self.config, if necessary)
       case @config['markdown']
         when 'redcarpet'
           begin
             require 'redcarpet'
-            @redcarpet_extensions = @config['redcarpet']['extensions'].map { |e| e.to_sym }
+
+            @renderer ||= Class.new(Redcarpet::Render::HTML) do
+              def block_code(code, lang)
+                lang = lang && lang.split.first || "text"
+                output = add_code_tags(
+                  Pygments.highlight(code, :lexer => lang, :options => { :encoding => 'utf-8' }),
+                  lang
+                )
+              end
+
+              def add_code_tags(code, lang)
+                code = code.sub(/<pre>/,'<pre><code class="' + lang + '">')
+                code = code.sub(/<\/pre>/,"</code></pre>")
+              end
+            end
+
+            @redcarpet_extensions = {}
+            @config['redcarpet']['extensions'].each { |e| @redcarpet_extensions[e.to_sym] = true }
           rescue LoadError
             STDERR.puts 'You are missing a library required for Markdown. Please run:'
             STDERR.puts '  $ [sudo] gem install redcarpet'
@@ -30,8 +46,6 @@ module Jekyll
         when 'rdiscount'
           begin
             require 'rdiscount'
-
-            # Load rdiscount extensions
             @rdiscount_extensions = @config['rdiscount']['extensions'].map { |e| e.to_sym }
           rescue LoadError
             STDERR.puts 'You are missing a library required for Markdown. Please run:'
@@ -88,7 +102,10 @@ module Jekyll
       setup
       case @config['markdown']
         when 'redcarpet'
-          Redcarpet.new(content, *@redcarpet_extensions).to_html
+          @redcarpet_extensions[:fenced_code_blocks] = !@redcarpet_extensions[:no_fenced_code_blocks]
+          @renderer.send :include, Redcarpet::Render::SmartyPants if @redcarpet_extensions[:smart]
+          markdown = Redcarpet::Markdown.new(@renderer.new(@redcarpet_extensions), @redcarpet_extensions)
+          markdown.render(content)
         when 'kramdown'
           # Check for use of coderay
           if @config['kramdown']['use_coderay']
diff --git a/test/test_redcarpet.rb b/test/test_redcarpet.rb
index 05596a92..43ec4331 100644
--- a/test/test_redcarpet.rb
+++ b/test/test_redcarpet.rb
@@ -4,7 +4,7 @@ class TestRedcarpet < Test::Unit::TestCase
   context "redcarpet" do
     setup do
       config = {
-        'redcarpet' => { 'extensions' => ['smart'] },
+        'redcarpet' => { 'extensions' => ['smart', 'strikethrough', 'filter_html'] },
         'markdown' => 'redcarpet'
       }
       @markdown = MarkdownConverter.new config
@@ -14,8 +14,26 @@ class TestRedcarpet < Test::Unit::TestCase
       assert_equal "<h1>Some Header</h1>", @markdown.convert('# Some Header #').strip
     end
     
-    should "pass redcarpet extensions" do
+    should "pass redcarpet SmartyPants options" do
       assert_equal "<p>&ldquo;smart&rdquo;</p>", @markdown.convert('"smart"').strip
     end
+
+    should "pass redcarpet extensions" do
+      assert_equal "<p><del>deleted</del></p>", @markdown.convert('~~deleted~~').strip
+    end
+
+    should "pass redcarpet render options" do
+      assert_equal "<p><strong>bad code not here</strong>: i am bad</p>", @markdown.convert('**bad code not here**: <script>i am bad</script>').strip
+    end
+
+    should "render fenced code blocks" do
+      assert_equal "<div class=\"highlight\"><pre><code class=\"ruby\"><span class=\"nb\">puts</span> <span class=\"s2\">&quot;Hello world&quot;</span>\n</code></pre>\n</div>", @markdown.convert(
+        <<-EOS
+```ruby
+puts "Hello world"
+```
+EOS
+      ).strip  
+    end
   end
 end