diff --git a/tools/generation/lib/template.py b/tools/generation/lib/template.py
index 609724b6f3..53bd03ba19 100644
--- a/tools/generation/lib/template.py
+++ b/tools/generation/lib/template.py
@@ -11,18 +11,40 @@ from test import Test
 indentPattern = re.compile(r'^(\s*)')
 interpolatePattern = re.compile(r'\{\s*(\S+)\s*\}')
 
-def indent(text, prefix = '    '):
+def indent(text, prefix = '    ', js_value = False):
     '''Prefix a block of text (as defined by the "line break" control
-    character) with some character sequence.'''
+    character) with some character sequence.
+
+    :param prefix: String value to insert before each line
+    :param js_value: If True, the text will be interpreted as a JavaScript
+        value, meaning that indentation will not occur for lines that would
+        effect the runtime value; defaults to False
+    '''
 
     if isinstance(text, list):
         lines = text
     else:
         lines = text.split('\n')
 
-    indented = map(
-        lambda line: line if len(line) == 0 else prefix + line,
-        lines)
+    indented = [prefix + lines[0]]
+    str_char = None
+
+    for line in lines[1:]:
+        # Determine if the beginning of the current line is part of some
+        # previously-opened literal value.
+        if js_value:
+            for char in indented[-1]:
+                if char == str_char:
+                    str_char = None
+                elif str_char is None and char in '\'"`':
+                    str_char = char
+
+        # Do not indent the current line if it is a continuation of a literal
+        # value or if it is empty.
+        if str_char or len(line) == 0:
+            indented.append(line)
+        else:
+            indented.append(prefix + line)
 
     return '\n'.join(indented)
 
@@ -90,7 +112,7 @@ class Template:
                 value = value.replace('\n', '\\\n')
 
             source = source[:region['firstchar']] + \
-                indent(value, whitespace).lstrip() + \
+                indent(value, whitespace, True).lstrip() + \
                 source[region['lastchar']:]
 
         setup = context['regions'].get('setup')
diff --git a/tools/generation/test/expected/indentation/spaces-indent-code.js b/tools/generation/test/expected/indentation/spaces-indent-code.js
new file mode 100644
index 0000000000..41fa3c22d7
--- /dev/null
+++ b/tools/generation/test/expected/indentation/spaces-indent-code.js
@@ -0,0 +1,19 @@
+// This file was procedurally generated from the following sources:
+// - tools/generation/test/fixtures/indent-code.case
+// - tools/generation/test/fixtures/indentation/spaces.template
+/*---
+description: Multiple lines of code (Preserving "soft" indentation across newlines)
+flags: [generated]
+---*/
+
+(function() {
+  'These literals are each contained on a single line...';
+  "...which means they may be indented...";
+  `...without effecting the semantics of the generated source code.`;
+
+  if (true) {
+    'These literals are each contained on a single line...';
+    "...which means they may be indented...";
+    `...without effecting the semantics of the generated source code.`;
+  }
+}());
diff --git a/tools/generation/test/expected/indentation/spaces-indent-string-continuation.js b/tools/generation/test/expected/indentation/spaces-indent-string-continuation.js
new file mode 100644
index 0000000000..da98f99a3f
--- /dev/null
+++ b/tools/generation/test/expected/indentation/spaces-indent-string-continuation.js
@@ -0,0 +1,19 @@
+// This file was procedurally generated from the following sources:
+// - tools/generation/test/fixtures/indent-string-continuation.case
+// - tools/generation/test/fixtures/indentation/spaces.template
+/*---
+description: Multiline string via a line continuation character (Preserving "soft" indentation across newlines)
+flags: [generated]
+---*/
+
+(function() {
+  'this string is declared across multiple lines\
+\
+which disqualifies it as a candidate for indentation';
+
+  if (true) {
+    'this string is declared across multiple lines\
+\
+which disqualifies it as a candidate for indentation';
+  }
+}());
diff --git a/tools/generation/test/expected/indentation/spaces-indent-string-template.js b/tools/generation/test/expected/indentation/spaces-indent-string-template.js
new file mode 100644
index 0000000000..504b9a6e64
--- /dev/null
+++ b/tools/generation/test/expected/indentation/spaces-indent-string-template.js
@@ -0,0 +1,21 @@
+// This file was procedurally generated from the following sources:
+// - tools/generation/test/fixtures/indent-string-template.case
+// - tools/generation/test/fixtures/indentation/spaces.template
+/*---
+description: String template spanning multiple lines (Preserving "soft" indentation across newlines)
+flags: [generated]
+---*/
+
+(function() {
+  `this string template is declared across multiple lines
+
+which disqualifies it as a candidate for indentation
+it also happens to contain ' and ".`;
+
+  if (true) {
+    `this string template is declared across multiple lines
+
+which disqualifies it as a candidate for indentation
+it also happens to contain ' and ".`;
+  }
+}());
diff --git a/tools/generation/test/expected/indentation/tabs-indent-code.js b/tools/generation/test/expected/indentation/tabs-indent-code.js
new file mode 100644
index 0000000000..ccfc7c71d1
--- /dev/null
+++ b/tools/generation/test/expected/indentation/tabs-indent-code.js
@@ -0,0 +1,19 @@
+// This file was procedurally generated from the following sources:
+// - tools/generation/test/fixtures/indent-code.case
+// - tools/generation/test/fixtures/indentation/tabs.template
+/*---
+description: Multiple lines of code (Preserving "hard" indentation across newlines)
+flags: [generated]
+---*/
+
+(function() {
+	'These literals are each contained on a single line...';
+	"...which means they may be indented...";
+	`...without effecting the semantics of the generated source code.`;
+
+	if (true) {
+		'These literals are each contained on a single line...';
+		"...which means they may be indented...";
+		`...without effecting the semantics of the generated source code.`;
+	}
+}());
diff --git a/tools/generation/test/expected/indentation/tabs-indent-string-continuation.js b/tools/generation/test/expected/indentation/tabs-indent-string-continuation.js
new file mode 100644
index 0000000000..a4719748e3
--- /dev/null
+++ b/tools/generation/test/expected/indentation/tabs-indent-string-continuation.js
@@ -0,0 +1,19 @@
+// This file was procedurally generated from the following sources:
+// - tools/generation/test/fixtures/indent-string-continuation.case
+// - tools/generation/test/fixtures/indentation/tabs.template
+/*---
+description: Multiline string via a line continuation character (Preserving "hard" indentation across newlines)
+flags: [generated]
+---*/
+
+(function() {
+	'this string is declared across multiple lines\
+\
+which disqualifies it as a candidate for indentation';
+
+	if (true) {
+		'this string is declared across multiple lines\
+\
+which disqualifies it as a candidate for indentation';
+	}
+}());
diff --git a/tools/generation/test/expected/indentation/tabs-indent-string-template.js b/tools/generation/test/expected/indentation/tabs-indent-string-template.js
new file mode 100644
index 0000000000..b40bd7578d
--- /dev/null
+++ b/tools/generation/test/expected/indentation/tabs-indent-string-template.js
@@ -0,0 +1,21 @@
+// This file was procedurally generated from the following sources:
+// - tools/generation/test/fixtures/indent-string-template.case
+// - tools/generation/test/fixtures/indentation/tabs.template
+/*---
+description: String template spanning multiple lines (Preserving "hard" indentation across newlines)
+flags: [generated]
+---*/
+
+(function() {
+	`this string template is declared across multiple lines
+
+which disqualifies it as a candidate for indentation
+it also happens to contain ' and ".`;
+
+	if (true) {
+		`this string template is declared across multiple lines
+
+which disqualifies it as a candidate for indentation
+it also happens to contain ' and ".`;
+	}
+}());
diff --git a/tools/generation/test/fixtures/indent-code.case b/tools/generation/test/fixtures/indent-code.case
new file mode 100644
index 0000000000..e10f49a8df
--- /dev/null
+++ b/tools/generation/test/fixtures/indent-code.case
@@ -0,0 +1,11 @@
+// Copyright (C) 2017 Mike Pennisi. All rights reserved.
+// This code is governed by the BSD license found in the LICENSE file.
+/*---
+template: indentation
+desc: Multiple lines of code
+---*/
+
+//- value
+'These literals are each contained on a single line...';
+"...which means they may be indented...";
+`...without effecting the semantics of the generated source code.`;
diff --git a/tools/generation/test/fixtures/indent-string-continuation.case b/tools/generation/test/fixtures/indent-string-continuation.case
new file mode 100644
index 0000000000..e22d9690c9
--- /dev/null
+++ b/tools/generation/test/fixtures/indent-string-continuation.case
@@ -0,0 +1,11 @@
+// Copyright (C) 2017 Mike Pennisi. All rights reserved.
+// This code is governed by the BSD license found in the LICENSE file.
+/*---
+template: indentation
+desc: Multiline string via a line continuation character
+---*/
+
+//- value
+'this string is declared across multiple lines\
+\
+which disqualifies it as a candidate for indentation';
diff --git a/tools/generation/test/fixtures/indent-string-template.case b/tools/generation/test/fixtures/indent-string-template.case
new file mode 100644
index 0000000000..56daee9a14
--- /dev/null
+++ b/tools/generation/test/fixtures/indent-string-template.case
@@ -0,0 +1,12 @@
+// Copyright (C) 2017 Mike Pennisi. All rights reserved.
+// This code is governed by the BSD license found in the LICENSE file.
+/*---
+template: indentation
+desc: String template spanning multiple lines
+---*/
+
+//- value
+`this string template is declared across multiple lines
+
+which disqualifies it as a candidate for indentation
+it also happens to contain ' and ".`;
diff --git a/tools/generation/test/fixtures/indentation/spaces.template b/tools/generation/test/fixtures/indentation/spaces.template
new file mode 100644
index 0000000000..0796dac5a0
--- /dev/null
+++ b/tools/generation/test/fixtures/indentation/spaces.template
@@ -0,0 +1,14 @@
+// Copyright (C) 2017 Mike Pennisi. All rights reserved.
+// This code is governed by the BSD license found in the LICENSE file.
+/*---
+name: Preserving "soft" indentation across newlines
+path: indentation/spaces-
+---*/
+
+(function() {
+  /*{ value }*/
+
+  if (true) {
+    /*{ value }*/
+  }
+}());
diff --git a/tools/generation/test/fixtures/indentation/tabs.template b/tools/generation/test/fixtures/indentation/tabs.template
new file mode 100644
index 0000000000..87130571f5
--- /dev/null
+++ b/tools/generation/test/fixtures/indentation/tabs.template
@@ -0,0 +1,14 @@
+// Copyright (C) 2017 Mike Pennisi. All rights reserved.
+// This code is governed by the BSD license found in the LICENSE file.
+/*---
+name: Preserving "hard" indentation across newlines
+path: indentation/tabs-
+---*/
+
+(function() {
+	/*{ value }*/
+
+	if (true) {
+		/*{ value }*/
+	}
+}());
diff --git a/tools/generation/test/run.py b/tools/generation/test/run.py
index 9fc9ee3a1b..c21efa1b83 100755
--- a/tools/generation/test/run.py
+++ b/tools/generation/test/run.py
@@ -59,5 +59,14 @@ class TestGeneration(unittest.TestCase):
         self.assertEqual(result['returncode'], 0)
         self.compareTrees('negative')
 
+    def test_indentation(self):
+        result = self.fixture('indent-code.case')
+        self.assertEqual(result['returncode'], 0)
+        result = self.fixture('indent-string-continuation.case')
+        self.assertEqual(result['returncode'], 0)
+        result = self.fixture('indent-string-template.case')
+        self.assertEqual(result['returncode'], 0)
+        self.compareTrees('indentation')
+
 if __name__ == '__main__':
     unittest.main()