diff --git a/hledger-lib/Hledger/Read/JournalReader.hs b/hledger-lib/Hledger/Read/JournalReader.hs
index ad0290226..a5cd09e4e 100644
--- a/hledger-lib/Hledger/Read/JournalReader.hs
+++ b/hledger-lib/Hledger/Read/JournalReader.hs
@@ -549,10 +549,14 @@ definedirectivep        = do string "define"  >> lift restofline >> return ()
 exprdirectivep          = do string "expr"    >> lift restofline >> return ()
 valuedirectivep         = do string "value"   >> lift restofline >> return ()
 evaldirectivep          = do string "eval"   >> lift restofline >> return ()
-pythondirectivep        = do string "python" >> lift restofline >> many (indented $ lift restofline) >> return ()
-  where
-    indented = (lift skipNonNewlineSpaces1 >>)
 commandlineflagdirectivep = do string "--" >> lift restofline >> return ()
+pythondirectivep = do
+  string "python" >> lift restofline
+  many $ indentedline <|> blankline
+  return ()
+  where
+    indentedline = lift skipNonNewlineSpaces1 >> lift restofline
+    blankline = lift skipNonNewlineSpaces >> newline >> return "" <?> "blank line"
 
 keywordp :: String -> JournalParser m ()
 keywordp = void . string . fromString
diff --git a/hledger/test/ledger-compat/syntax/hledger-other.test b/hledger/test/ledger-compat/syntax/hledger-other.test
index e77af5403..0ae6d4c80 100644
--- a/hledger/test/ledger-compat/syntax/hledger-other.test
+++ b/hledger/test/ledger-compat/syntax/hledger-other.test
@@ -69,7 +69,11 @@ tag Receipt
   assert value != "foobar"
 value some_func
 python
-  import os
+    def option_pyfirst(context):
+        print("In --pyfirst (from %s)" % context)
+
+    def option_pysecond(context, val):
+        print("In --pysecond=%s (from %s)" % (val, context))
 eval foo
 --command-line-flag