diff --git a/src/compiler/compile/nodes/Text.ts b/src/compiler/compile/nodes/Text.ts
index 7500f5ff30d9..a4514f56f26e 100644
--- a/src/compiler/compile/nodes/Text.ts
+++ b/src/compiler/compile/nodes/Text.ts
@@ -12,7 +12,7 @@ export default class Text extends Node {
 		super(component, parent, scope, info);
 		this.data = info.data;
 
-		if (!component.component_options.preserveWhitespace && !/\S/.test(info.data)) {
+		if (!component.component_options.preserveWhitespace && !/[\S\u00A0]/.test(info.data)) {
 			let node = parent;
 			while (node) {
 				if (node.type === 'Element' && node.name === 'pre') {
diff --git a/test/runtime/samples/nbsp-div/_config.js b/test/runtime/samples/nbsp-div/_config.js
new file mode 100644
index 000000000000..6026af2c9090
--- /dev/null
+++ b/test/runtime/samples/nbsp-div/_config.js
@@ -0,0 +1,19 @@
+export default {
+	html: `<div>&nbsp;hello</div>
+	<div>&nbsp;hello&nbsp;&nbsp;</div>
+	<div>&nbsp;hello&nbsp; &nbsp;hello</div>`,
+
+	test({ assert, component, target }) {
+		var divList = target.querySelectorAll('div')
+		assert.equal( divList[0].textContent.charCodeAt( 0 ), 160 );
+		assert.equal( divList[1].textContent.charCodeAt( 0 ), 160 );
+		assert.equal( divList[1].textContent.charCodeAt( 6 ), 160 );
+		assert.equal( divList[1].textContent.charCodeAt( 7 ), 160 );
+		assert.equal( divList[2].textContent.charCodeAt( 0 ), 160 );
+		assert.equal( divList[2].textContent.charCodeAt( 6 ), 160 );
+		assert.equal( divList[2].textContent.charCodeAt( 7 ), 32 );//normal space
+		assert.equal( divList[2].textContent.charCodeAt( 8 ), 160 );
+
+		
+	}
+};
\ No newline at end of file
diff --git a/test/runtime/samples/nbsp-div/main.svelte b/test/runtime/samples/nbsp-div/main.svelte
new file mode 100644
index 000000000000..64557bfeb142
--- /dev/null
+++ b/test/runtime/samples/nbsp-div/main.svelte
@@ -0,0 +1,7 @@
+<script>
+	let name = 'hello';
+</script>
+
+<div>&nbsp;{name}</div>
+<div>&nbsp;{name}&nbsp;&nbsp;</div>
+<div>&nbsp;{name}&nbsp; &nbsp;{name}</div>
\ No newline at end of file