diff --git a/crates/story/examples/html.html b/crates/story/examples/html.html
index 460b0080..7baebc6c 100644
--- a/crates/story/examples/html.html
+++ b/crates/story/examples/html.html
@@ -5,8 +5,9 @@
         <p>
             This is a paragraph inside a div element, have
             <mention>@Mention Tag</mention>
-            <a href="https://google.com">Link with: <b>Bold <i>italic</i></b></a>, <strong>bold</strong>,
-            <em>italic</em>, and
+            <a href="https://google.com"
+                >Link with: <b>Bold <i>italic</i></b></a
+            >, <strong>bold</strong>, <em>italic</em>, and
             <code>code</code> text.
         </p>
         <script>
@@ -24,7 +25,10 @@
             }
         </style>
         <p>
-            <img src="https://is1-ssl.mzstatic.com/image/thumb/avICmr1PbBRB-PAeplGreA/1378x774.jpg" height="400px" />
+            <img
+                src="https://is1-ssl.mzstatic.com/image/thumb/avICmr1PbBRB-PAeplGreA/1378x774.jpg"
+                height="400px"
+            />
         </p>
         <div>
             <p>This is second paragraph.</p>
@@ -47,11 +51,11 @@
             <li>
                 Numbered item 1
                 <ol>
-                    <li>Sub item 1</li>
-                    <li>Sub item 2</li>
+                    <li>Sub <strong>item</strong> 1</li>
+                    <li>Sub <foo>item</foo> 2</li>
                 </ol>
             </li>
-            <li>Numbered item 2</li>
+            <li>Numbered <em>item</em> 2</li>
             <li>Numbered item 3</li>
         </ol>
         Text after the Numbered List.
@@ -95,15 +99,27 @@
     Text after the section.
     <section>
         <h2>Images</h2>
-        <img src="https://is1-ssl.mzstatic.com/image/thumb/5tQkYfzU9bSMUol0GajO4w/1378x774.jpg" height="400px" />
+        <img
+            src="https://is1-ssl.mzstatic.com/image/thumb/5tQkYfzU9bSMUol0GajO4w/1378x774.jpg"
+            height="400px"
+        />
         <p>
             (A Tesla Model X on display at the June 2024 Shanghai new energy
             vehicle show. Image credit: CnEVPost)
         </p>
-        <img src="https://miro.medium.com/v2/resize:fit:1400/format:webp/1*-Y9ozbNWSViiCmal1TT32w.jpeg" width="100%" />
+        <img
+            src="https://miro.medium.com/v2/resize:fit:1400/format:webp/1*-Y9ozbNWSViiCmal1TT32w.jpeg"
+            width="100%"
+        />
         Text before the image.
-        <img src="https://miro.medium.com/v2/resize:fit:1400/format:webp/0*u4La03Nh6E4zIc9-.jpeg" width="100%" />
+        <img
+            src="https://miro.medium.com/v2/resize:fit:1400/format:webp/0*u4La03Nh6E4zIc9-.jpeg"
+            width="100%"
+        />
         Text after the image.
-        <img src="https://miro.medium.com/v2/resize:fit:1400/format:webp/0*Q_JiltniByWLWoUv" style="width: 100%" />
+        <img
+            src="https://miro.medium.com/v2/resize:fit:1400/format:webp/0*Q_JiltniByWLWoUv"
+            style="width: 100%"
+        />
     </section>
-</article>
\ No newline at end of file
+</article>
diff --git a/crates/ui/src/text/element.rs b/crates/ui/src/text/element.rs
index 2808f2ec..80a4f54d 100644
--- a/crates/ui/src/text/element.rs
+++ b/crates/ui/src/text/element.rs
@@ -2,7 +2,7 @@ use std::ops::Range;
 
 use gpui::{
     div, img, prelude::FluentBuilder as _, px, relative, rems, AnyElement, App, DefiniteLength,
-    ElementId, FontStyle, FontWeight, Half, HighlightStyle, InteractiveElement as _,
+    Div, ElementId, FontStyle, FontWeight, Half, HighlightStyle, InteractiveElement as _,
     InteractiveText, IntoElement, Length, ObjectFit, ParentElement, Rems, RenderOnce, SharedString,
     SharedUri, Styled, StyledImage as _, StyledText, Window,
 };
@@ -310,14 +310,7 @@ impl RenderOnce for Paragraph {
 
                 for text_node in children.into_iter() {
                     let text_len = text_node.text.len();
-                    let part = if text.len() == 0 {
-                        // trim start for first text
-                        text_node.text.trim_start()
-                    } else {
-                        text_node.text.as_str()
-                    };
-
-                    text.push_str(part);
+                    text.push_str(&text_node.text);
 
                     let mut node_highlights = vec![];
                     for (range, style) in text_node.marks {
@@ -415,10 +408,33 @@ impl Node {
             } => v_flex()
                 .when(spread, |this| this.child(div()))
                 .children({
-                    let mut items = Vec::with_capacity(children.len());
-                    for child in children.into_iter() {
+                    let mut items: Vec<Div> = Vec::with_capacity(children.len());
+                    for (child_ix, child) in children.iter().enumerate() {
                         match &child {
                             Node::Paragraph(_) => {
+                                let last_not_list = child_ix > 0
+                                    && !matches!(children[child_ix - 1], Node::List { .. });
+
+                                let text = child.clone().render(
+                                    Some(ListState {
+                                        depth: state.depth + 1,
+                                        ordered: state.ordered,
+                                        todo: checked.is_some(),
+                                    }),
+                                    true,
+                                    text_view_style,
+                                    window,
+                                    cx,
+                                );
+
+                                // merge content into last item.
+                                if last_not_list {
+                                    if let Some(item_item) = items.last_mut() {
+                                        item_item.extend(vec![text.into_any_element()]);
+                                        continue;
+                                    }
+                                }
+
                                 items.push(
                                     h_flex()
                                         .relative()
@@ -455,23 +471,11 @@ impl Node {
                                                     }),
                                             )
                                         })
-                                        .child(div().flex_1().overflow_hidden().child(
-                                            child.render(
-                                                Some(ListState {
-                                                    depth: state.depth + 1,
-                                                    ordered: state.ordered,
-                                                    todo: checked.is_some(),
-                                                }),
-                                                true,
-                                                text_view_style,
-                                                window,
-                                                cx,
-                                            ),
-                                        )),
+                                        .child(text),
                                 );
                             }
                             Node::List { .. } => {
-                                items.push(div().ml(rems(1.)).child(child.render(
+                                items.push(div().ml(rems(1.)).child(child.clone().render(
                                     Some(ListState {
                                         depth: state.depth + 1,
                                         ordered: state.ordered,
diff --git a/crates/ui/src/text/html.rs b/crates/ui/src/text/html.rs
index 3cd62b0e..4f21f207 100644
--- a/crates/ui/src/text/html.rs
+++ b/crates/ui/src/text/html.rs
@@ -417,7 +417,6 @@ fn parse_paragraph(
                     let (child_text, child_marks) = parse_paragraph(&mut child_paragraph, &child);
                     merge_child_text(&mut text, &mut marks, &child_text, &child_marks);
                 }
-
                 marks.push((
                     0..text.len(),
                     InlineTextStyle {
@@ -530,7 +529,7 @@ fn parse_paragraph(
                 let (child_text, child_marks) = parse_paragraph(&mut child_paragraph, &child);
                 merge_child_text(&mut text, &mut marks, &child_text, &child_marks);
             }
-            paragraph.push(element::TextNode {
+            paragraph.push(TextNode {
                 text: text.clone(),
                 marks: marks.clone(),
             });
@@ -639,6 +638,7 @@ fn parse_node(node: &Rc<Node>, paragraph: &mut Paragraph) -> element::Node {
                 let ordered = name.local == local_name!("ol");
 
                 let mut list_children = vec![];
+
                 for child in node.children.borrow().iter() {
                     let mut child_paragraph = Paragraph::default();
                     list_children.push(parse_node(child, &mut child_paragraph));