diff --git a/Atom/src/Atom.mm b/Atom/src/Atom.mm
index 20b2eceae..84acbaad8 100755
--- a/Atom/src/Atom.mm
+++ b/Atom/src/Atom.mm
@@ -24,7 +24,7 @@
 
 - (void)dealloc {
   [_hiddenWindow release];
-  [self dealloc];
+  [super dealloc];
 }
 
 - (BOOL)isHandlingSendEvent {
@@ -40,7 +40,8 @@
 
   if ([[self mainMenu] performKeyEquivalent:event]) return;
   
-  if (_clientHandler && ![self keyWindow] && [event type] == NSKeyDown) {
+  bool windowHandlesKeyEvents = [[[self keyWindow] windowController] handlesKeyEvents];
+  if (_clientHandler && !windowHandlesKeyEvents && [event type] == NSKeyDown) {
     [_hiddenWindow makeKeyAndOrderFront:self];
     [_hiddenWindow sendEvent:event];
   }
diff --git a/Atom/src/AtomController.h b/Atom/src/AtomController.h
index fd630dc11..a9853c827 100644
--- a/Atom/src/AtomController.h
+++ b/Atom/src/AtomController.h
@@ -9,6 +9,8 @@ class ClientHandler;
   NSView *_webView;
   NSString *_bootstrapScript;
   NSString *_pathToOpen;
+
+  bool _handlesKeyEvents;
   
   CefRefPtr<CefV8Context> _atomContext;
   CefRefPtr<ClientHandler> _clientHandler;
@@ -17,6 +19,7 @@ class ClientHandler;
 - (id)initWithBootstrapScript:(NSString *)bootstrapScript atomContext:(CefRefPtr<CefV8Context>) context;
 - (id)initWithPath:(NSString *)path atomContext:(CefRefPtr<CefV8Context>)atomContext;
 - (id)initSpecsWithAtomContext:(CefRefPtr<CefV8Context>)atomContext;
+- (bool)handlesKeyEvents;
 
 - (void)createBrowser;
 
diff --git a/Atom/src/AtomController.mm b/Atom/src/AtomController.mm
index f07edbd2a..7d3ea1450 100644
--- a/Atom/src/AtomController.mm
+++ b/Atom/src/AtomController.mm
@@ -29,10 +29,12 @@
 
 - (id)initWithPath:(NSString *)path atomContext:(CefRefPtr<CefV8Context>)atomContext {
   _pathToOpen = [path retain];
+  _handlesKeyEvents = YES;
   return [self initWithBootstrapScript:@"window-bootstrap" atomContext:atomContext];
 }
 
 - (id)initSpecsWithAtomContext:(CefRefPtr<CefV8Context>)atomContext {
+  _handlesKeyEvents = NO;
   return [self initWithBootstrapScript:@"spec-bootstrap" atomContext:atomContext];
 }
 
@@ -56,6 +58,10 @@
   CefBrowser::CreateBrowser(window_info, _clientHandler.get(), [indexURLString UTF8String], settings);  
 }
 
+- (bool)handlesKeyEvents {
+  return _handlesKeyEvents;
+}
+
 #pragma mark BrowserDelegate
 
 - (void)loadStart {
diff --git a/spec/atom/editor-spec.coffee b/spec/atom/editor-spec.coffee
index 57273e0b1..8a5ad0fbb 100644
--- a/spec/atom/editor-spec.coffee
+++ b/spec/atom/editor-spec.coffee
@@ -12,6 +12,7 @@ describe "Editor", ->
   beforeEach ->
     buffer = new Buffer(require.resolve('fixtures/sample.js'))
     editor = new Editor
+    editor.autoIndent = false
     editor.enableKeymap()
     editor.setBuffer(buffer)
 
@@ -458,6 +459,30 @@ describe "Editor", ->
             editor.lines.trigger 'mouseup'
             expect(editor.getSelectedText()).toBe "    if (items.length <= 1) return items;"
 
+  describe "auto indent/outdent", ->
+    beforeEach ->
+      editor.autoIndent = true
+
+    describe "when newline is inserted", ->
+      it "indents cursor based on the indentation of previous line", ->
+        editor.setCursorBufferPosition([4, 29])
+        editor.insertText("\n")
+        expect(editor.buffer.lineForRow(5)).toEqual("      ")
+
+      it "indents cursor based on the indentation of previous line", ->
+        editor.setCursorBufferPosition([4, 29])
+        editor.insertText("\nvar thisIsCool")
+        expect(editor.buffer.lineForRow(5)).toEqual("      var thisIsCool")
+
+    describe "when text that closes a scope entered", ->
+      it "outdents the text", ->
+        editor.setCursorBufferPosition([1, 30])
+        editor.insertText("\n")
+        expect(editor.buffer.lineForRow(2)).toEqual("    ")
+        editor.insertText("}")
+        expect(editor.buffer.lineForRow(2)).toEqual("  }")
+        expect(editor.getCursorBufferPosition().column).toBe 3
+
   describe "selection", ->
     selection = null
 
diff --git a/src/atom/ace-outdent-adaptor.coffee b/src/atom/ace-outdent-adaptor.coffee
new file mode 100644
index 000000000..5e54d9fa4
--- /dev/null
+++ b/src/atom/ace-outdent-adaptor.coffee
@@ -0,0 +1,21 @@
+Range = require 'range'
+
+module.exports =
+class AceOutdentAdaptor
+  constructor: (@buffer, @editor) ->
+
+  getLine: (row) ->
+    @buffer.lineForRow(row)
+
+  # We don't care where the bracket is; we always outdent one level
+  findMatchingBracket: ({row, column}) ->
+    {row: 0, column: 0}
+
+  # Does not actually replace text, just line at range.start outdents one level
+  replace: (range, text) ->
+    {row, column} = @editor.getCursorBufferPosition()
+    start = range.start
+    end = {row: range.start.row, column: range.start.column + atom.tabText.length}
+    @buffer.change(new Range(start, end), "")
+    @editor.setCursorBufferPosition({row, column: column - atom.tabText.length})
+
diff --git a/src/atom/app.coffee b/src/atom/app.coffee
index f5e79057b..37bd69570 100644
--- a/src/atom/app.coffee
+++ b/src/atom/app.coffee
@@ -6,15 +6,17 @@ module.exports =
 class App
   keymap: null
   windows: null
+  tabText: null
 
   constructor: (@loadPath, nativeMethods)->
     @windows = []
     @setupKeymap()
+    @tabText = "  "
 
   setupKeymap: ->
     @keymap = new GlobalKeymap()
-    
     $(document).on 'keydown', (e) => @keymap.handleKeyEvent(e)
+    @keymap.bindDefaultKeys()
 
   open: (url) ->
     $native.open url
diff --git a/src/atom/buffer.coffee b/src/atom/buffer.coffee
index 1567498a8..bdd4f9f10 100644
--- a/src/atom/buffer.coffee
+++ b/src/atom/buffer.coffee
@@ -95,9 +95,10 @@ class Buffer
     if not @path then throw new Error("Tried to save buffer with no url")
     fs.write @path, @getText()
 
-  modeName: ->
+  getMode: ->
+    return @mode if @mode
     extension = if @path then @path.split('/').pop().split('.').pop() else null
-    switch extension
+    modeName = switch extension
       when 'js' then 'javascript'
       when 'coffee' then 'coffee'
       when 'rb', 'ru' then 'ruby'
@@ -106,4 +107,6 @@ class Buffer
       when 'css' then 'css'
       else 'text'
 
+    @mode = new (require("ace/mode/#{modeName}").Mode)
+
 _.extend(Buffer.prototype, EventEmitter)
diff --git a/src/atom/editor.coffee b/src/atom/editor.coffee
index f1e5e2194..8b0cbdfb0 100644
--- a/src/atom/editor.coffee
+++ b/src/atom/editor.coffee
@@ -1,4 +1,5 @@
 {View, $$} = require 'space-pen'
+AceOutdentAdaptor = require 'ace-outdent-adaptor'
 Buffer = require 'buffer'
 Cursor = require 'cursor'
 Gutter = require 'gutter'
@@ -32,6 +33,7 @@ class Editor extends View
   highlighter: null
   renderer: null
   undoManager: null
+  autoIndent: null
 
   initialize: () ->
     requireStylesheet 'editor.css'
@@ -40,6 +42,7 @@ class Editor extends View
     @buildCursorAndSelection()
     @handleEvents()
     @setBuffer(new Buffer)
+    @autoIndent = true
 
   bindKeys: ->
     window.keymap.bindKeys '*:not(.editor *)',
@@ -70,7 +73,7 @@ class Editor extends View
     @on 'select-left', => @selectLeft()
     @on 'select-up', => @selectUp()
     @on 'select-down', => @selectDown()
-    @on 'newline', =>  @insertNewline()
+    @on 'newline', =>  @insertText("\n")
     @on 'backspace', => @backspace()
     @on 'delete', => @delete()
     @on 'cut', => @cutSelection()
@@ -297,12 +300,34 @@ class Editor extends View
   selectToBufferPosition: (position) ->
     @selection.selectToBufferPosition(position)
 
-  insertText: (text) -> @selection.insertText(text)
-  insertNewline: -> @selection.insertNewline()
+  insertText: (text) ->
+    { text, shouldOutdent } = @autoIndentText(text)
+
+    @selection.insertText(text)
+
+    @autoOutdentText() if shouldOutdent
+
+  autoIndentText: (text) ->
+    if @autoIndent
+      state = @renderer.lineForRow(@getCursorRow()).state
+
+      if text[0] == "\n"
+        indent = @buffer.mode.getNextLineIndent(state, @getCurrentLine(), atom.tabText)
+        text = text[0] + indent + text[1..]
+      else if @buffer.mode.checkOutdent(state, @getCurrentLine(), text)
+        shouldOutdent = true
+
+    console.log text
+
+    {text, shouldOutdent}
+
+  autoOutdentText: ->
+    state = @renderer.lineForRow(@getCursorRow()).state
+    @buffer.mode.autoOutdent(state, new AceOutdentAdaptor(@buffer, this), @getCursorRow())
 
   cutSelection: -> @selection.cut()
   copySelection: -> @selection.copy()
-  paste: -> @selection.insertText($native.readFromPasteboard())
+  paste: -> @insertText($native.readFromPasteboard())
 
   foldSelection: -> @selection.fold()
 
diff --git a/src/atom/global-keymap.coffee b/src/atom/global-keymap.coffee
index 1fe11643c..ec1eaf14e 100644
--- a/src/atom/global-keymap.coffee
+++ b/src/atom/global-keymap.coffee
@@ -9,15 +9,15 @@ class GlobalKeymap
   constructor: ->
     @bindingSets = []
 
+  bindDefaultKeys: ->
     @bindKeys "*",
       'meta-n': 'newWindow'
       'meta-o': 'open'
 
     $(document).on 'newWindow', => $native.newWindow()
-    $(document).on 'open', => 
+    $(document).on 'open', =>
       url = $native.openDialog()
       atom.open(url) if url
-  
 
   bindKeys: (selector, bindings) ->
     @bindingSets.unshift(new BindingSet(selector, bindings))
@@ -29,7 +29,7 @@ class GlobalKeymap
 
   handleKeyEvent: (event) ->
     event.keystroke = @keystrokeStringForEvent(event)
-    currentNode = $(event.target)    
+    currentNode = $(event.target)
     while currentNode.length
       candidateBindingSets = @bindingSets.filter (set) -> currentNode.is(set.selector)
       candidateBindingSets.sort (a, b) -> b.specificity - a.specificity
diff --git a/src/atom/highlighter.coffee b/src/atom/highlighter.coffee
index 67dd3b8f1..061228ff5 100644
--- a/src/atom/highlighter.coffee
+++ b/src/atom/highlighter.coffee
@@ -5,18 +5,12 @@ EventEmitter = require 'event-emitter'
 module.exports =
 class Highlighter
   buffer: null
-  tokenizer: null
   screenLines: []
 
   constructor: (@buffer) ->
-    @buildTokenizer()
     @screenLines = @buildLinesForScreenRows('start', 0, @buffer.lastRow())
     @buffer.on 'change', (e) => @handleBufferChange(e)
 
-  buildTokenizer: ->
-    Mode = require("ace/mode/#{@buffer.modeName()}").Mode
-    @tokenizer = (new Mode).getTokenizer()
-
   handleBufferChange: (e) ->
     oldRange = e.oldRange.copy()
     newRange = e.newRange.copy()
@@ -56,8 +50,9 @@ class Highlighter
       screenLine
 
   buildLineForScreenRow: (state, row) ->
+    tokenizer = @buffer.getMode().getTokenizer()
     line = @buffer.lineForRow(row)
-    {tokens, state} = @tokenizer.getLineTokens(line, state)
+    {tokens, state} = tokenizer.getLineTokens(line, state)
     new ScreenLineFragment(tokens, line, [1, 0], [1, 0], { state })
 
   lineForScreenRow: (row) ->
diff --git a/src/atom/selection.coffee b/src/atom/selection.coffee
index 8fe9b8a67..b292143b6 100644
--- a/src/atom/selection.coffee
+++ b/src/atom/selection.coffee
@@ -81,9 +81,6 @@ class Selection extends View
   insertText: (text) ->
     @editor.buffer.change(@getBufferRange(), text)
 
-  insertNewline: ->
-    @insertText('\n')
-
   delete: ->
     range = @getBufferRange()
     @editor.buffer.change(range, '') unless range.isEmpty()
diff --git a/src/atom/window.coffee b/src/atom/window.coffee
index 70e7f9798..7b732da7f 100644
--- a/src/atom/window.coffee
+++ b/src/atom/window.coffee
@@ -17,11 +17,11 @@ windowAdditions =
   startup: (url) ->
     @setupKeymap()
     @attachRootView(url)
-    
-    $(window).on 'close', => 
+
+    $(window).on 'close', =>
       @shutdown()
       @close()
-    
+
     $(window).focus()
     atom.windowOpened this
 
@@ -33,7 +33,7 @@ windowAdditions =
 
   setupKeymap: ->
     @keymap = new GlobalKeymap()
-
+    @keymap.bindDefaultKeys()
     $(document).on 'keydown', (e) => @keymap.handleKeyEvent(e)
 
   attachRootView: (url) ->