diff --git a/config.json b/config.json
index d8c6bb9b71..491a5e9d5c 100644
--- a/config.json
+++ b/config.json
@@ -863,6 +863,14 @@
         "conditionals"
       ]
     },
+    {
+      "uuid": "1818f134-0ed9-e680-9b29-45ffd2b3344b0f841c7",
+      "slug": "markdown",
+      "difficulty": 3,
+      "topics": [
+        "refactoring"
+      ]
+    },
     {
       "uuid": "e348a307-078c-5280-65af-a159283d4e79438b755",
       "slug": "forth",
diff --git a/exercises/markdown/README.md b/exercises/markdown/README.md
new file mode 100644
index 0000000000..8a772cb3fc
--- /dev/null
+++ b/exercises/markdown/README.md
@@ -0,0 +1,30 @@
+# Markdown
+
+The markdown exercise is a refactoring exercise. There is code that parses a
+given string with [Markdown
+syntax](https://guides.github.com/features/mastering-markdown/) and returns the
+associated HTML for that string. Even though this code is confusingly written
+and hard to follow, somehow it works and all the tests are passing! Your
+challenge is to re-write this code to make it easier to read and maintain
+while still making sure that all the tests keep passing.
+
+It would be helpful if you made notes of what you did in your refactoring in
+comments so reviewers can see that, but it isn't strictly necessary. The most
+important thing is to make the code better!
+
+### Submitting Exercises
+
+Note that, when trying to submit an exercise, make sure the solution is in the `exercism/python/<exerciseName>` directory.
+
+For example, if you're submitting `bob.py` for the Bob exercise, the submit command would be something like `exercism submit <path_to_exercism_dir>/python/bob/bob.py`.
+
+
+For more detailed information about running tests, code style and linting,
+please see the [help page](http://exercism.io/languages/python).
+
+## Source
+
+Syntax [https://guides.github.com/features/mastering-markdown/](https://guides.github.com/features/mastering-markdown/)
+
+## Submitting Incomplete Solutions
+It's possible to submit an incomplete solution so you can see how others have completed the exercise.
diff --git a/exercises/markdown/example.py b/exercises/markdown/example.py
new file mode 100644
index 0000000000..7321ad6f34
--- /dev/null
+++ b/exercises/markdown/example.py
@@ -0,0 +1,80 @@
+import re
+
+
+def parse_markdown(markdown):
+    lines = markdown.split('\n')
+    html = ''
+    in_list = False
+    for line in lines:
+        res = parse_line(line, in_list)
+        html += res['line']
+        in_list = res['in_list']
+    if in_list:
+        html += '</ul>'
+    return html
+
+
+def wrap(line, tag):
+    return '<{tag}>{line}</{tag}>'.format(line=line, tag=tag)
+
+
+def check_headers(line):
+    pattern = '# (.*)'
+    for i in range(6):
+        if re.match(pattern, line):
+            return wrap(line[(i + 2):], 'h' + str(i + 1))
+        pattern = '#' + pattern
+    return line
+
+
+def check_bold(line):
+    bold_pattern = '(.*)__(.*)__(.*)'
+    bold_match = re.match(bold_pattern, line)
+    if bold_match:
+        return bold_match.group(1) + wrap(bold_match.group(2), 'strong')\
+            + bold_match.group(3)
+    else:
+        return None
+
+
+def check_italic(line):
+    italic_pattern = '(.*)_(.*)_(.*)'
+    italic_match = re.match(italic_pattern, line)
+    if italic_match:
+        return italic_match.group(1) + wrap(italic_match.group(2), 'em')\
+            + italic_match.group(3)
+    else:
+        return None
+
+
+def parse_line(line, in_list):
+    res = check_headers(line)
+
+    list_match = re.match(r'\* (.*)', res)
+
+    if (list_match):
+        if not in_list:
+            res = '<ul>' + wrap(list_match.group(1), 'li')
+            in_list = True
+        else:
+            res = wrap(list_match.group(1), 'li')
+    else:
+        if in_list:
+            res += '</ul>'
+            in_list = False
+
+    if not re.match('<h|<ul|<li', res):
+        res = wrap(res, 'p')
+
+    if not re.match('(<ul>)?<li>_(.*)', res):
+        res = re.sub('(.*)(<li>)(.*)(</li>)(.*)', r'\1\2<p>\3</p>\4\5', res)
+
+    while check_bold(res):
+        res = check_bold(res)
+    while check_italic(res):
+        res = check_italic(res)
+
+    return {
+        'line': res,
+        'in_list': in_list
+    }
diff --git a/exercises/markdown/markdown.py b/exercises/markdown/markdown.py
new file mode 100644
index 0000000000..456a11e935
--- /dev/null
+++ b/exercises/markdown/markdown.py
@@ -0,0 +1,71 @@
+import re
+
+
+def parse_markdown(markdown):
+    lines = markdown.split('\n')
+    res = ''
+    in_list = False
+    for i in lines:
+        if re.match('###### (.*)', i) is not None:
+            i = '<h6>' + i[7:] + '</h6>'
+        elif re.match('## (.*)', i) is not None:
+            i = '<h2>' + i[3:] + '</h2>'
+        elif re.match('# (.*)', i) is not None:
+            i = '<h1>' + i[2:] + '</h1>'
+        m = re.match(r'\* (.*)', i)
+        if m:
+            if not in_list:
+                in_list = True
+                is_bold = False
+                is_italic = False
+                curr = m.group(1)
+                m1 = re.match('(.*)__(.*)__(.*)', curr)
+                if m1:
+                    curr = m1.group(1) + '<strong>' + \
+                        m1.group(2) + '</strong>' + m1.group(3)
+                    is_bold = True
+                m1 = re.match('(.*)_(.*)_(.*)', curr)
+                if m1:
+                    curr = m1.group(1) + '<em>' + m1.group(2) + \
+                        '</em>' + m1.group(3)
+                    is_italic = True
+                if is_italic or is_bold:
+                    i = '<ul><li>' + curr + '</li>'
+                else:
+                    i = '<ul><li><p>' + curr + '</p></li>'
+            else:
+                is_bold = False
+                is_italic = False
+                curr = m.group(1)
+                m1 = re.match('(.*)__(.*)__(.*)', curr)
+                if m1:
+                    curr = m1.group(1) + '<strong>' + \
+                        m1.group(2) + '</strong>' + m1.group(3)
+                    is_bold = True
+                m1 = re.match('(.*)_(.*)_(.*)', curr)
+                if m1:
+                    curr = m1.group(1) + '<em>' + m1.group(2) + \
+                        '</em>' + m1.group(3)
+                    is_italic = True
+                if is_italic or is_bold:
+                    i = '<li>' + curr + '</li>'
+                else:
+                    i = '<li><p>' + curr + '</p></li>'
+        else:
+            if in_list:
+                i = '</ul>+i'
+                in_list = False
+
+        m = re.match('<h|<ul|<p|<li', i)
+        if not m:
+            i = '<p>' + i + '</p>'
+        m = re.match('(.*)__(.*)__(.*)', i)
+        if m:
+            i = m.group(1) + '<strong>' + m.group(2) + '</strong>' + m.group(3)
+        m = re.match('(.*)_(.*)_(.*)', i)
+        if m:
+            i = m.group(1) + '<em>' + m.group(2) + '</em>' + m.group(3)
+        res += i
+    if in_list:
+        res += '</ul>'
+    return res
diff --git a/exercises/markdown/markdown_test.py b/exercises/markdown/markdown_test.py
new file mode 100644
index 0000000000..6042594ff3
--- /dev/null
+++ b/exercises/markdown/markdown_test.py
@@ -0,0 +1,51 @@
+import unittest
+from markdown import parse_markdown
+
+
+# Tests adapted from `problem-specifications//canonical-data.json` @ v1.0.0
+
+
+class TestMarkdown(unittest.TestCase):
+
+    def test_paragraph(self):
+        self.assertEqual(parse_markdown('This will be a paragraph'),
+                         '<p>This will be a paragraph</p>')
+
+    def test_italics(self):
+        self.assertEqual(parse_markdown('_This will be italic_'),
+                         '<p><em>This will be italic</em></p>')
+
+    def test_bold(self):
+        self.assertEqual(parse_markdown('__This will be bold__'),
+                         '<p><strong>This will be bold</strong></p>')
+
+    def test_mixed(self):
+        self.assertEqual(parse_markdown('This will _be_ __mixed__'),
+                         '<p>This will <em>be</em> <strong>mixed</strong></p>')
+
+    def test_h1(self):
+        self.assertEqual(parse_markdown('# This will be an h1'),
+                         '<h1>This will be an h1</h1>')
+
+    def test_h2(self):
+        self.assertEqual(parse_markdown('## This will be an h2'),
+                         '<h2>This will be an h2</h2>')
+
+    def test_h6(self):
+        self.assertEqual(parse_markdown(
+            '###### This will be an h6'), '<h6>This will be an h6</h6>')
+
+    def test_unordered_lists(self):
+        self.assertEqual(parse_markdown('* Item 1\n* Item 2'),
+                         '<ul><li><p>Item 1</p></li>'
+                         '<li><p>Item 2</p></li></ul>')
+
+    def test_little_bit_of_everything(self):
+        self.assertEqual(parse_markdown(
+            '# Header!\n* __Bold Item__\n* _Italic Item_'),
+            '<h1>Header!</h1><ul><li><strong>Bold Item</strong></li>'
+            '<li><em>Italic Item</em></li></ul>')
+
+
+if __name__ == '__main__':
+    unittest.main()