diff --git a/mustache.js b/mustache.js
index a03e2e0..e1099b0 100644
--- a/mustache.js
+++ b/mustache.js
@@ -496,8 +496,9 @@
         break;
       case '>':
         if (!partials) continue;
-        value = this.parse(isFunction(partials) ? partials(token[1]) : partials[token[1]]);
-        if (value != null) buffer += this.renderTokens(value, context, partials, originalTemplate);
+        var partialTemplate = isFunction(partials) ? partials(token[1]) : partials[token[1]];
+        value = this.parse(partialTemplate);
+        if (value != null) buffer += this.renderTokens(value, context, partials, partialTemplate);
         break;
       case '&':
         value = context.lookup(token[1]);
diff --git a/test/_files/section_functions_in_partials.js b/test/_files/section_functions_in_partials.js
new file mode 100644
index 0000000..4672778
--- /dev/null
+++ b/test/_files/section_functions_in_partials.js
@@ -0,0 +1,7 @@
+({
+  bold: function(){
+    return function(text, render) {
+      return "<b>" + render(text) + "</b>";
+    }
+  }
+})
diff --git a/test/_files/section_functions_in_partials.mustache b/test/_files/section_functions_in_partials.mustache
new file mode 100644
index 0000000..8164932
--- /dev/null
+++ b/test/_files/section_functions_in_partials.mustache
@@ -0,0 +1,3 @@
+{{> partial}}
+
+<p>some more text</p>
diff --git a/test/_files/section_functions_in_partials.partial b/test/_files/section_functions_in_partials.partial
new file mode 100644
index 0000000..3e90b00
--- /dev/null
+++ b/test/_files/section_functions_in_partials.partial
@@ -0,0 +1 @@
+{{#bold}}Hello There{{/bold}}
diff --git a/test/_files/section_functions_in_partials.txt b/test/_files/section_functions_in_partials.txt
new file mode 100644
index 0000000..2f5955c
--- /dev/null
+++ b/test/_files/section_functions_in_partials.txt
@@ -0,0 +1,3 @@
+<b>Hello There</b>
+
+<p>some more text</p>