diff --git a/test/snapshots/seattlerb/pct_w_heredoc_interp_nested.txt b/test/snapshots/seattlerb/pct_w_heredoc_interp_nested.txt
new file mode 100644
index 0000000000..89ce74ce19
--- /dev/null
+++ b/test/snapshots/seattlerb/pct_w_heredoc_interp_nested.txt
@@ -0,0 +1,28 @@
+ProgramNode(0...30)(
+  [],
+  StatementsNode(0...30)(
+    [ArrayNode(0...30)(
+       [StringNode(4...5)(nil, (4...5), nil, "1"),
+        InterpolatedStringNode(0...12)(
+          nil,
+          [EmbeddedStatementsNode(6...12)(
+             (6...8),
+             StatementsNode(8...19)(
+               [InterpolatedStringNode(8...19)(
+                  (8...11),
+                  [StringNode(15...17)(nil, (15...17), nil, "2\n")],
+                  (17...19)
+                )]
+             ),
+             (11...12)
+           )],
+          nil
+        ),
+        StringNode(13...14)(nil, (13...14), nil, "3"),
+        StringNode(25...26)(nil, (25...26), nil, "4"),
+        StringNode(27...28)(nil, (27...28), nil, "5")],
+       (0...3),
+       (29...30)
+     )]
+  )
+)
diff --git a/test/yarp/parse_test.rb b/test/yarp/parse_test.rb
index 3eff7d447f..b6020b82db 100644
--- a/test/yarp/parse_test.rb
+++ b/test/yarp/parse_test.rb
@@ -28,7 +28,6 @@ class ParseTest < Test::Unit::TestCase
 
   known_failures = %w[
     seattlerb/heredoc_nested.txt
-    seattlerb/pct_w_heredoc_interp_nested.txt
   ]
 
   def find_source_file_node(node)
diff --git a/yarp/util/yp_char.c b/yarp/util/yp_char.c
index 9befcb5105..1c0c20edd9 100644
--- a/yarp/util/yp_char.c
+++ b/yarp/util/yp_char.c
@@ -75,7 +75,7 @@ yp_strspn_whitespace(const char *string, ptrdiff_t length) {
 // whitespace while also tracking the location of each newline. Disallows
 // searching past the given maximum number of characters.
 size_t
-yp_strspn_whitespace_newlines(const char *string, long length, yp_newline_list_t *newline_list) {
+yp_strspn_whitespace_newlines(const char *string, long length, yp_newline_list_t *newline_list, bool stop_at_newline) {
     if (length <= 0) return 0;
 
     size_t size = 0;
@@ -83,7 +83,12 @@ yp_strspn_whitespace_newlines(const char *string, long length, yp_newline_list_t
 
     while (size < maximum && (yp_char_table[(unsigned char) string[size]] & YP_CHAR_BIT_WHITESPACE)) {
         if (string[size] == '\n') {
-            yp_newline_list_append(newline_list, string + size);
+            if (stop_at_newline) {
+                return size + 1;
+            }
+            else {
+                yp_newline_list_append(newline_list, string + size);
+            }
         }
 
         size++;
diff --git a/yarp/util/yp_char.h b/yarp/util/yp_char.h
index 85e5ce4c65..dcc011f0a1 100644
--- a/yarp/util/yp_char.h
+++ b/yarp/util/yp_char.h
@@ -15,7 +15,7 @@ size_t yp_strspn_whitespace(const char *string, ptrdiff_t length);
 // whitespace while also tracking the location of each newline. Disallows
 // searching past the given maximum number of characters.
 size_t
-yp_strspn_whitespace_newlines(const char *string, long length, yp_newline_list_t *newline_list);
+yp_strspn_whitespace_newlines(const char *string, long length, yp_newline_list_t *newline_list, bool);
 
 // Returns the number of characters at the start of the string that are inline
 // whitespace. Disallows searching past the given maximum number of characters.
diff --git a/yarp/util/yp_newline_list.c b/yarp/util/yp_newline_list.c
index c619e83c92..8b24f82a02 100644
--- a/yarp/util/yp_newline_list.c
+++ b/yarp/util/yp_newline_list.c
@@ -25,13 +25,15 @@ yp_newline_list_init(yp_newline_list_t *list, const char *start, size_t capacity
 bool
 yp_newline_list_append(yp_newline_list_t *list, const char *cursor) {
     if (list->size == list->capacity) {
-        list->capacity = list->capacity * 3 / 2;
+        list->capacity = (list->capacity * 3) / 2;
         list->offsets = (size_t *) realloc(list->offsets, list->capacity * sizeof(size_t));
         if (list->offsets == NULL) return false;
     }
 
     assert(cursor >= list->start);
-    list->offsets[list->size++] = (size_t) (cursor - list->start + 1);
+    size_t newline_offset = (size_t) (cursor - list->start + 1);
+    assert(list->size == 0 || newline_offset > list->offsets[list->size - 1]);
+    list->offsets[list->size++] = newline_offset;
 
     return true;
 }
diff --git a/yarp/yarp.c b/yarp/yarp.c
index c80aa5499a..2ae3b3ea28 100644
--- a/yarp/yarp.c
+++ b/yarp/yarp.c
@@ -6505,14 +6505,26 @@ parser_lex(yp_parser_t *parser) {
             }
         }
         case YP_LEX_LIST:
+            if (parser->next_start != NULL) {
+                parser->current.end = parser->next_start;
+                parser->next_start = NULL;
+            }
+
             // First we'll set the beginning of the token.
             parser->current.start = parser->current.end;
 
             // If there's any whitespace at the start of the list, then we're
             // going to trim it off the beginning and create a new token.
             size_t whitespace;
-            if ((whitespace = yp_strspn_whitespace_newlines(parser->current.end, parser->end - parser->current.end, &parser->newline_list)) > 0) {
+
+            bool should_stop = parser->heredoc_end;
+
+            if ((whitespace = yp_strspn_whitespace_newlines(parser->current.end, parser->end - parser->current.end, &parser->newline_list, should_stop)) > 0) {
                 parser->current.end += whitespace;
+                if (parser->current.end[-1] == '\n') {
+                    // mutates next_start
+                    parser_flush_heredoc_end(parser);
+                }
                 LEX(YP_TOKEN_WORDS_SEP);
             }