diff --git a/Gruntfile.js b/Gruntfile.js
index 85c58c2..f909a9b 100644
--- a/Gruntfile.js
+++ b/Gruntfile.js
@@ -257,6 +257,36 @@ module.exports = function(grunt) {
         dest: 'tmp/process_all_jade.js'
       },
 
+      process_pug: {
+        src: ['test/fixtures/process_pug.pug'],
+        dest: 'tmp/process_pug.js'
+      },
+
+      process_pug_custom: {
+        options: {
+          pug: {doctype: 'html'}
+        },
+        src: ['test/fixtures/process_pug_custom.pug'],
+        dest: 'tmp/process_pug_custom.js'
+      },
+
+      process_pug_with_include: {
+        options: {
+          pug: {}
+        },
+        src: ['test/fixtures/process_pug_with_include.pug'],
+        dest: 'tmp/process_pug_with_include.js'
+      },
+
+      process_all_pug: {
+        options: {
+          pug: {},
+          watch: true
+        },
+        src: ['test/fixtures/*.pug'],
+        dest: 'tmp/process_all_pug.js'
+      },
+      
       single_module: {
         options: {
           singleModule: true
diff --git a/package.json b/package.json
index 036db91..067eb8c 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
   "name": "grunt-html2js",
   "description": "Compiles AngularJS templates to JavaScript",
-  "version": "0.3.6",
+  "version": "1.0.0",
   "homepage": "https://github.com/karlgoldstein/grunt-html2js",
   "author": {
     "name": "Karl Goldstein",
@@ -28,10 +28,10 @@
     "test": "grunt test"
   },
   "devDependencies": {
-    "grunt-contrib-jshint": "~0.1.1",
+    "grunt": "~0.4.0",
     "grunt-contrib-clean": "~0.4.0",
+    "grunt-contrib-jshint": "~0.1.1",
     "grunt-contrib-nodeunit": "^0.3.3",
-    "grunt": "~0.4.0",
     "grunt-conventional-changelog": "~1.0.0",
     "load-grunt-tasks": "~0.2.0"
   },
@@ -39,7 +39,8 @@
     "grunt": ">=0.4.0"
   },
   "optionalDependencies": {
-    "jade": "^1.3.1"
+    "jade": "^1.3.1",
+    "pug": "^2.0.0-beta6"
   },
   "keywords": [
     "gruntplugin"
diff --git a/tasks/html2js.js b/tasks/html2js.js
index b60b477..1856b31 100644
--- a/tasks/html2js.js
+++ b/tasks/html2js.js
@@ -42,6 +42,11 @@ module.exports = function(grunt) {
     var jadeExtension = /\.jade$/;
     return jadeExtension.test(filepath);
   }
+  
+  function isPugTemplate(filepath) {
+    var pugExtension = /\.pug$/;
+    return pugExtension.test(filepath);
+  }
 
   // return template content
   var getContent = function(filepath, options) {
@@ -50,6 +55,10 @@ module.exports = function(grunt) {
       var jade = require('jade');
       options.jade.filename = filepath;
       content = jade.render(content, options.jade);
+    } else if (isPugTemplate(filepath)) {
+      var pug = require('pug');
+      options.pug.filename = filepath;
+      content = pug.render(content, options.pug);
     }
 
     // Process files as templates if requested.
@@ -139,6 +148,7 @@ module.exports = function(grunt) {
       htmlmin: {},
       process: false,
       jade: { pretty: true },
+      pug: { pretty: true },
       singleModule: false,
       existingModule: false,
       watch: false,
diff --git a/test/expected/process_all_pug.js b/test/expected/process_all_pug.js
new file mode 100644
index 0000000..3fc6e77
--- /dev/null
+++ b/test/expected/process_all_pug.js
@@ -0,0 +1,21 @@
+angular.module('templates-process_all_pug', ['../test/fixtures/process_pug.pug', '../test/fixtures/process_pug_custom.pug', '../test/fixtures/process_pug_with_include.pug', '../test/fixtures/pug_include.pug']);
+
+angular.module("../test/fixtures/process_pug.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug.pug",
+    "<p class=\"example\">Hello World!</p><div id=\"greeting\">Nice</div><div id=\"watch\">test</div>");
+}]);
+
+angular.module("../test/fixtures/process_pug_custom.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug_custom.pug",
+    "<a href=\"href\">Great</a>");
+}]);
+
+angular.module("../test/fixtures/process_pug_with_include.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug_with_include.pug",
+    "<h1>I'm an include!</h1>");
+}]);
+
+angular.module("../test/fixtures/pug_include.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/pug_include.pug",
+    "<h1>I'm an include!</h1>");
+}]);
diff --git a/test/expected/process_all_pug_after_change.js b/test/expected/process_all_pug_after_change.js
new file mode 100644
index 0000000..3fc6e77
--- /dev/null
+++ b/test/expected/process_all_pug_after_change.js
@@ -0,0 +1,21 @@
+angular.module('templates-process_all_pug', ['../test/fixtures/process_pug.pug', '../test/fixtures/process_pug_custom.pug', '../test/fixtures/process_pug_with_include.pug', '../test/fixtures/pug_include.pug']);
+
+angular.module("../test/fixtures/process_pug.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug.pug",
+    "<p class=\"example\">Hello World!</p><div id=\"greeting\">Nice</div><div id=\"watch\">test</div>");
+}]);
+
+angular.module("../test/fixtures/process_pug_custom.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug_custom.pug",
+    "<a href=\"href\">Great</a>");
+}]);
+
+angular.module("../test/fixtures/process_pug_with_include.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug_with_include.pug",
+    "<h1>I'm an include!</h1>");
+}]);
+
+angular.module("../test/fixtures/pug_include.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/pug_include.pug",
+    "<h1>I'm an include!</h1>");
+}]);
diff --git a/test/expected/process_pug.js b/test/expected/process_pug.js
new file mode 100644
index 0000000..b766fe9
--- /dev/null
+++ b/test/expected/process_pug.js
@@ -0,0 +1,7 @@
+angular.module('templates-process_pug', ['../test/fixtures/process_pug.pug']);
+
+angular.module("../test/fixtures/process_pug.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug.pug",
+    "<p class=\"example\">Hello World!</p>\n" +
+    "<div id=\"greeting\">Nice</div>");
+}]);
diff --git a/test/expected/process_pug_custom.js b/test/expected/process_pug_custom.js
new file mode 100644
index 0000000..5bb28ae
--- /dev/null
+++ b/test/expected/process_pug_custom.js
@@ -0,0 +1,6 @@
+angular.module('templates-process_pug_custom', ['../test/fixtures/process_pug_custom.pug']);
+
+angular.module("../test/fixtures/process_pug_custom.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug_custom.pug",
+    "<a href>Great</a>");
+}]);
diff --git a/test/expected/process_pug_with_include.js b/test/expected/process_pug_with_include.js
new file mode 100644
index 0000000..303be55
--- /dev/null
+++ b/test/expected/process_pug_with_include.js
@@ -0,0 +1,6 @@
+angular.module('templates-process_pug_with_include', ['../test/fixtures/process_pug_with_include.pug']);
+
+angular.module("../test/fixtures/process_pug_with_include.pug", []).run(["$templateCache", function($templateCache) {
+  $templateCache.put("../test/fixtures/process_pug_with_include.pug",
+    "<h1>I'm an include!</h1>");
+}]);
diff --git a/test/fixtures/process_pug.pug b/test/fixtures/process_pug.pug
new file mode 100644
index 0000000..0d11df6
--- /dev/null
+++ b/test/fixtures/process_pug.pug
@@ -0,0 +1,2 @@
+p.example Hello World!
+#greeting Nice
diff --git a/test/fixtures/process_pug_custom.pug b/test/fixtures/process_pug_custom.pug
new file mode 100644
index 0000000..064e768
--- /dev/null
+++ b/test/fixtures/process_pug_custom.pug
@@ -0,0 +1 @@
+a(href) Great
diff --git a/test/fixtures/process_pug_with_include.pug b/test/fixtures/process_pug_with_include.pug
new file mode 100644
index 0000000..51e68aa
--- /dev/null
+++ b/test/fixtures/process_pug_with_include.pug
@@ -0,0 +1 @@
+include ./pug_include
diff --git a/test/fixtures/pug_include.pug b/test/fixtures/pug_include.pug
new file mode 100644
index 0000000..ccfc1f3
--- /dev/null
+++ b/test/fixtures/pug_include.pug
@@ -0,0 +1 @@
+h1 I'm an include!
diff --git a/test/html2js_test.js b/test/html2js_test.js
index 2d3e661..7970a36 100644
--- a/test/html2js_test.js
+++ b/test/html2js_test.js
@@ -328,6 +328,57 @@ exports.html2js = {
             test.done();
         }, 1000);
 
+    },
+    process_pug: function (test) {
+        test.expect(1);
+
+        assertFileContentsEqual(test, 'tmp/process_pug.js',
+            'test/expected/process_pug.js',
+            'expected pug template to be processed');
+
+        test.done();
+    },
+    process_pug_with_custom_options: function (test) {
+        test.expect(1);
+
+        assertFileContentsEqual(test, 'tmp/process_pug_custom.js',
+            'test/expected/process_pug_custom.js',
+            'expected pug template to be processed with custom options');
+
+        test.done();
+    },
+    process_pug_with_include: function (test) {
+        test.expect(1);
+        assertFileContentsEqual(test, 'tmp/process_pug_with_include.js',
+            'test/expected/process_pug_with_include.js',
+            'expected pug template to be processed with custom options');
+
+        test.done();
+    },
+    process_all_pug: function (test) {
+        test.expect(1);
+
+        // This test is run with options.watch on
+        // We need to edit a fixture file to make sure it is watched and re-compiled
+        var file2Change = 'test/fixtures/process_pug.pug';
+        var contents = grunt.file.read(file2Change);
+        var newContents = contents + "\n#watch test";
+
+        // Write edited fixture file
+        grunt.file.write(file2Change, grunt.util.normalizelf(newContents));
+
+        // wait for the watch-change to process
+        setTimeout(function () {
+            // Check re-compiled with changes were added
+            assertFileContentsEqual(test, 'tmp/process_all_pug.js',
+                'test/expected/process_all_pug_after_change.js',
+                'expected pug template to be processed with custom options');
+
+            //reset fixture file to original contents
+            grunt.file.write(file2Change, grunt.util.normalizelf(contents));
+            test.done();
+        }, 1500);
+
     },
     single_module: function (test) {
         test.expect(1);