diff --git a/exec.cpp b/exec.cpp
index 599158865..10baa76bf 100644
--- a/exec.cpp
+++ b/exec.cpp
@@ -525,9 +525,6 @@ static void internal_exec_helper(parser_t &parser,
         return;
     }
 
-    int is_block_old=is_block;
-    is_block=1;
-
     signal_unblock();
 
     if (node_offset == NODE_OFFSET_INVALID)
@@ -544,7 +541,6 @@ static void internal_exec_helper(parser_t &parser,
     morphed_chain.clear();
     io_cleanup_fds(opened_fds);
     job_reap(0);
-    is_block=is_block_old;
 }
 
 /* Returns whether we can use posix spawn for a given process in a given job.
diff --git a/parser.cpp b/parser.cpp
index 3740f1fbe..be7e494af 100644
--- a/parser.cpp
+++ b/parser.cpp
@@ -278,6 +278,12 @@ void parser_t::push_block(block_t *new_current)
 
     this->block_stack.push_back(new_current);
 
+    // Types TOP and SUBST are not considered blocks for the purposes of `status -b`
+    if (type != TOP && type != SUBST)
+    {
+        is_block = 1;
+    }
+
     if ((new_current->type() != FUNCTION_DEF) &&
             (new_current->type() != FAKE) &&
             (new_current->type() != TOP))
@@ -305,6 +311,19 @@ void parser_t::pop_block()
         env_pop();
 
     delete old;
+
+    // Figure out if `status -b` should consider us to be in a block now
+    int new_is_block=0;
+    for (std::vector<block_t*>::const_iterator it = block_stack.begin(), end = block_stack.end(); it != end; ++it)
+    {
+        const enum block_type_t type = (*it)->type();
+        if (type != TOP && type != SUBST)
+        {
+            new_is_block = 1;
+            break;
+        }
+    }
+    is_block = new_is_block;
 }
 
 void parser_t::pop_block(const block_t *expected)
diff --git a/tests/status.in b/tests/status.in
index 14dff2320..875f62f38 100644
--- a/tests/status.in
+++ b/tests/status.in
@@ -1,9 +1,17 @@
 # vim: set filetype=fish:
 
+status -b
+or echo 'top level'
+
+begin
+    status -b
+end
+and echo 'block'
+
 # Issue #1728
 # Bad file redirection on a block causes `status --is-block` to return 0 forever.
 begin; end >/ # / is a directory, it can't be opened for writing
 status -b
-and echo 'block'
+and echo 'unexpected block'
 
 true
diff --git a/tests/status.out b/tests/status.out
index e69de29bb..a6546ffd0 100644
--- a/tests/status.out
+++ b/tests/status.out
@@ -0,0 +1,2 @@
+top level
+block