diff --git a/app/assets/javascripts/discourse/components/d-editor.js.es6 b/app/assets/javascripts/discourse/components/d-editor.js.es6
index 3b2aa374073..21639fd76f3 100644
--- a/app/assets/javascripts/discourse/components/d-editor.js.es6
+++ b/app/assets/javascripts/discourse/components/d-editor.js.es6
@@ -32,6 +32,8 @@ const OP = {
   ADDED: 2
 };
 
+const FOUR_SPACES_INDENT = '4-spaces-indent';
+
 const _createCallbacks = [];
 
 class Toolbar {
@@ -534,14 +536,21 @@ export default Ember.Component.extend({
 
     formatCode() {
       const sel = this._getSelected();
-      if (sel.value.indexOf("\n") !== -1) {
-        return (this.siteSettings.code_formatting_style === "4-spaces-indent") ?
+      const hasNewLine = sel.value.indexOf("\n") !== -1
+
+      if (this.siteSettings.code_formatting_style === FOUR_SPACES_INDENT) {
+        return (hasNewLine ?
                 this._applySurround(sel, '    ', '', 'code_text') :
-                this._addText(sel, '```\n' + sel.value + '\n```');
+                this._applySurround(sel, '`', '`', 'code_text'));
       } else {
-        return (this.siteSettings.code_formatting_style === "4-spaces-indent") ?
-                this._applySurround(sel, '`', '`', 'code_text') :
-                this._applySurround(sel, '```\n', '\n```', 'paste_code_text');
+        const preNewline = (sel.pre[-1] !== "\n" && sel.pre !== "") ? "\n" : "";
+        const postNewline = sel.post[0] !== "\n" ? "\n" : "";
+
+        if (hasNewLine) {
+          return this._addText(sel, `${preNewline}\`\`\`\n${sel.value}\n\`\`\`${postNewline}`);
+        } else {
+          return this._applySurround(sel, `${preNewline}\`\`\`\n`, `\n\`\`\`${postNewline}`, 'paste_code_text');
+        }
       }
     },
 
diff --git a/test/javascripts/components/d-editor-test.js.es6 b/test/javascripts/components/d-editor-test.js.es6
index abebfe9cf5b..eea8e277c87 100644
--- a/test/javascripts/components/d-editor-test.js.es6
+++ b/test/javascripts/components/d-editor-test.js.es6
@@ -259,11 +259,13 @@ componentTest('advanced code', {
   setup() {
     this.siteSettings.code_formatting_style = '4-spaces-indent';
     this.set('value',
-`function xyz(x, y, z) {
+`
+function xyz(x, y, z) {
   if (y === z) {
     return true;
   }
-}`);
+}
+`   );
   },
 
   test(assert) {
@@ -274,11 +276,14 @@ componentTest('advanced code', {
     click('button.code');
     andThen(() => {
       assert.equal(this.get('value'),
-`    function xyz(x, y, z) {
+`
+    function xyz(x, y, z) {
       if (y === z) {
         return true;
       }
-    }`);
+    }
+`
+      );
     });
   }
 
@@ -338,6 +343,122 @@ componentTest('code button', {
   }
 });
 
+componentTest('code fences', {
+  template: '{{d-editor value=value}}',
+  setup() {
+    this.set('value', '');
+  },
+
+  test(assert) {
+    const textarea = jumpEnd(this.$('textarea.d-editor-input')[0]);
+
+    click('button.code');
+    andThen(() => {
+      assert.equal(this.get('value'),
+`\`\`\`
+${I18n.t("composer.paste_code_text")}
+\`\`\`
+`
+      );
+
+      assert.equal(textarea.selectionStart, 4);
+      assert.equal(textarea.selectionEnd, 27);
+
+      this.set('value', 'first line\nsecond line\nthird line');
+
+      textarea.selectionStart = 0;
+      textarea.selectionEnd = textarea.value.length;
+    });
+
+    click('button.code');
+    andThen(() => {
+      assert.equal(this.get('value'),
+`\`\`\`
+first line
+second line
+third line
+\`\`\`
+`
+      );
+
+      assert.equal(textarea.selectionStart, textarea.value.length);
+      assert.equal(textarea.selectionEnd, textarea.value.length);
+
+      this.set('value', 'first line\nsecond line\nthird line');
+
+      textarea.selectionStart = 0;
+      textarea.selectionEnd = 0;
+    });
+
+    click('button.code');
+    andThen(() => {
+      assert.equal(this.get('value'),
+`\`\`\`
+${I18n.t('composer.paste_code_text')}
+\`\`\`
+first line
+second line
+third line`
+      );
+
+      assert.equal(textarea.selectionStart, 4);
+      assert.equal(textarea.selectionEnd, 27);
+
+      this.set('value', 'first line\nsecond line\nthird line');
+
+      textarea.selectionStart = 0;
+      textarea.selectionEnd = 10;
+    });
+
+    click('button.code');
+    andThen(() => {
+      assert.equal(this.get('value'),
+`\`\`\`
+first line
+\`\`\`
+second line
+third line`
+      );
+
+      assert.equal(textarea.selectionStart, 4);
+      assert.equal(textarea.selectionEnd, 14);
+
+      this.set('value', 'first line\nsecond line\nthird line');
+
+      textarea.selectionStart = 0;
+      textarea.selectionEnd = 23;
+    });
+
+    click('button.code');
+    andThen(() => {
+      assert.equal(this.get('value'),
+`\`\`\`
+first line
+second line
+\`\`\`
+third line`
+      );
+
+      assert.equal(textarea.selectionStart, 30);
+      assert.equal(textarea.selectionEnd, 30);
+
+      this.set('value', 'first line\nsecond line\nthird line');
+
+      textarea.selectionStart = 6;
+      textarea.selectionEnd = 17;
+    });
+
+    click('button.code');
+    andThen(() => {
+      assert.equal(this.get('value'), `first \n\`\`\`\nline\nsecond\n\`\`\`\n line\nthird line`);
+
+      assert.equal(textarea.selectionStart, 27);
+      assert.equal(textarea.selectionEnd, 27);
+    });
+  }
+});
+
+
 testCase('quote button', function(assert, textarea) {
   click('button.quote');
   andThen(() => {