diff --git a/src/ast-to-react.js b/src/ast-to-react.js
index 64d0bbc8..db8cacf1 100644
--- a/src/ast-to-react.js
+++ b/src/ast-to-react.js
@@ -80,7 +80,7 @@ function getNodeProps(node, key, opts, renderer, parent, index) {
       props.tight = !node.loose
       props.ordered = node.ordered
       props.index = node.index
-      props.children = (props.tight ? unwrapParagraphs(node) : node.children).map((childNode, i) => {
+      props.children = getListItemChildren(node, parent).map((childNode, i) => {
         return astToReact(childNode, opts, {node: node, props: props}, i)
       })
       break
@@ -200,6 +200,18 @@ function flattenPosition(pos) {
     .join('')
 }
 
+function getListItemChildren(node, parent) {
+  if (node.loose) {
+    return node.children;
+  }
+
+  if (parent.node && node.index > 0 && parent.node.children[node.index - 1].loose) {
+    return node.children;
+  }
+
+  return unwrapParagraphs(node);
+}
+
 function unwrapParagraphs(node) {
   return node.children.reduce((array, child) => {
     return array.concat(child.type === 'paragraph' ? child.children || [] : [child])
diff --git a/test/__snapshots__/react-markdown.test.js.snap b/test/__snapshots__/react-markdown.test.js.snap
index 790851ff..2d54f825 100644
--- a/test/__snapshots__/react-markdown.test.js.snap
+++ b/test/__snapshots__/react-markdown.test.js.snap
@@ -186,7 +186,9 @@ Array [
       </p>
     </li>
     <li>
-      bar
+      <p>
+        bar
+      </p>
     </li>
   </ul>,
   <h2>
@@ -657,7 +659,9 @@ Array [
       </p>
     </li>
     <li>
-      bar
+      <p>
+        bar
+      </p>
     </li>
   </ul>,
   <h2>
@@ -1618,7 +1622,9 @@ exports[`should handle loose, unordered lists 1`] = `
     </p>
   </li>
   <li>
-    bar
+    <p>
+      bar
+    </p>
   </li>
 </ul>
 `;