diff --git a/extensions/html/client/src/htmlMain.ts b/extensions/html/client/src/htmlMain.ts
index 303d87b7a2f..5453ea343fd 100644
--- a/extensions/html/client/src/htmlMain.ts
+++ b/extensions/html/client/src/htmlMain.ts
@@ -62,4 +62,19 @@ export function activate(context: ExtensionContext) {
 			}
 		],
 	});
+
+	languages.setLanguageConfiguration('handlebars', {
+		wordPattern: /("(?:[^\\\"]*(?:\\.)?)*"?)|('(?:[^\\\']*(?:\\.)?)*'?)|[^\s<>={}\[\],]+/,
+		onEnterRules:[
+			{
+				beforeText: new RegExp(`<(?!(?:${EMPTY_ELEMENTS.join('|')}))([_:\\w][_:\\w-.\\d]*)([^/>]*(?!/)>)[^<]*$`, 'i'),
+				afterText: /^<\/([_:\w][_:\w-.\d]*)\s*>$/i,
+				action: { indentAction: IndentAction.IndentOutdent }
+			},
+			{
+				beforeText: new RegExp(`<(?!(?:${EMPTY_ELEMENTS.join('|')}))(\\w[\\w\\d]*)([^/>]*(?!/)>)[^<]*$`, 'i'),
+				action: { indentAction: IndentAction.Indent }
+			}
+		],
+	});
 }
\ No newline at end of file
diff --git a/extensions/html/server/src/service/parser/htmlScanner.ts b/extensions/html/server/src/service/parser/htmlScanner.ts
index 2bb5c33ac7b..b6ea9566b5d 100644
--- a/extensions/html/server/src/service/parser/htmlScanner.ts
+++ b/extensions/html/server/src/service/parser/htmlScanner.ts
@@ -206,6 +206,10 @@ export interface Scanner {
 	getScannerState(): ScannerState;
 }
 
+const htmlScriptContents = {
+	'text/x-handlebars-template': true
+};
+
 export function createScanner(input: string, initialOffset = 0, initialState: ScannerState = ScannerState.WithinContent) : Scanner {
 
 	let stream = new MultiLineStream(input, initialOffset);
@@ -216,6 +220,8 @@ export function createScanner(input: string, initialOffset = 0, initialState: Sc
 
 	let hasSpaceAfterTag: boolean;
 	let lastTag: string;
+	let lastAttributeName: string;
+	let lastTypeValue: string;
 
 	function nextElementName(): string {
 		return stream.advanceIfRegExp(/^[_:\w][_:\w-.\d]*/).toLowerCase();
@@ -299,6 +305,8 @@ export function createScanner(input: string, initialOffset = 0, initialState: Sc
 				break;
 			case ScannerState.AfterOpeningStartTag:
 				lastTag = nextElementName();
+				lastTypeValue = null;
+				lastAttributeName = null;
 				if (lastTag.length > 0) {
 					hasSpaceAfterTag = false;
 					state = ScannerState.WithinTag;
@@ -316,8 +324,8 @@ export function createScanner(input: string, initialOffset = 0, initialState: Sc
 					return finishToken(offset, TokenType.Whitespace);
 				}
 				if (hasSpaceAfterTag) {
-					let name = nextAttributeName();
-					if (name.length > 0) {
+					lastAttributeName = nextAttributeName();
+					if (lastAttributeName.length > 0) {
 						state = ScannerState.AfterAttributeName;
 						hasSpaceAfterTag = false;
 						return finishToken(offset, TokenType.AttributeName);
@@ -329,7 +337,12 @@ export function createScanner(input: string, initialOffset = 0, initialState: Sc
 				}
 				if (stream.advanceIfChar(_RAN)) { // >
 					if (lastTag === 'script') {
-						state = ScannerState.WithinScriptContent;
+						if (lastTypeValue && htmlScriptContents[lastTypeValue]) {
+							// stay in html
+							state = ScannerState.WithinContent;
+						} else {
+							state = ScannerState.WithinScriptContent;
+						}	
 					} else if (lastTag === 'style') {
 						state = ScannerState.WithinStyleContent;
 					} else {
@@ -357,6 +370,9 @@ export function createScanner(input: string, initialOffset = 0, initialState: Sc
 				}
 				let attributeValue = stream.advanceIfRegExp(/^[^\s"'`=<>]+/);
 				if (attributeValue.length > 0) {
+					if (lastAttributeName === 'type') {
+						lastTypeValue = attributeValue;
+					}
 					state = ScannerState.WithinTag;
 					hasSpaceAfterTag = false;
 					return finishToken(offset, TokenType.AttributeValue);
@@ -367,6 +383,9 @@ export function createScanner(input: string, initialOffset = 0, initialState: Sc
 					if (stream.advanceUntilChar(ch)) {
 						stream.advance(1); // consume quote
 					}
+					if (lastAttributeName === 'type') {
+						lastTypeValue = stream.getSource().substring(offset + 1, stream.pos() - 1);
+					}
 					state = ScannerState.WithinTag;
 					hasSpaceAfterTag = false;
 					return finishToken(offset, TokenType.AttributeValue);
diff --git a/extensions/html/server/src/service/test/completion.test.ts b/extensions/html/server/src/service/test/completion.test.ts
index 04237fe03f3..f369bb3f408 100644
--- a/extensions/html/server/src/service/test/completion.test.ts
+++ b/extensions/html/server/src/service/test/completion.test.ts
@@ -269,6 +269,17 @@ suite('HTML Completion', () => {
 		], testDone);
 	});
 
+	suite('Handlevar Completion', (testDone) => {
+		run([
+		
+			testCompletionFor('<script id="entry-template" type="text/x-handlebars-template"> | </script>' , {
+				items: [
+					{ label: 'div', resultText: '<script id="entry-template" type="text/x-handlebars-template"> <div></div> </script>' },
+				]
+			})
+		], testDone);
+	});
+
 	test('Intellisense aria', function (testDone): any {
 		let expectedAriaAttributes = [
 			{ label: 'aria-activedescendant' },
diff --git a/src/vs/editor/editor.main.ts b/src/vs/editor/editor.main.ts
index 0fbf6472d3b..dbbf54ef04e 100644
--- a/src/vs/editor/editor.main.ts
+++ b/src/vs/editor/editor.main.ts
@@ -12,6 +12,7 @@ import 'vs/editor/contrib/quickOpen/browser/quickCommand';
 import 'vs/languages/languages.main';
 import 'vs/languages/php/common/php.contribution';
 import 'vs/languages/html/common/html.contribution';
+import 'vs/languages/handlebars/common/handlebars.contribution';
 
 import {createMonacoBaseAPI} from 'vs/editor/common/standalone/standaloneBase';
 import {createMonacoEditorAPI} from 'vs/editor/browser/standalone/standaloneEditor';
diff --git a/src/vs/languages/languages.main.ts b/src/vs/languages/languages.main.ts
index c8d49d4dda4..ecaf274b2af 100644
--- a/src/vs/languages/languages.main.ts
+++ b/src/vs/languages/languages.main.ts
@@ -6,5 +6,4 @@
 'use strict';
 
 
-import 'vs/languages/handlebars/common/handlebars.contribution';
 import 'vs/languages/razor/common/razor.contribution';