diff --git a/format-master.xml b/format-master.xml
index 81c8282..0948659 100755
--- a/format-master.xml
+++ b/format-master.xml
@@ -71,7 +71,6 @@
 	<template name="italic" match="italic"><latex><xsl:text>\textit{</xsl:text><xsl:apply-templates/><xsl:text>}</xsl:text></latex><html><I><xsl:apply-templates/></I></html></template>
 	<template name="strong" match="strong"><latex>\textbf{<xsl:apply-templates/>}</latex><html><STRONG><xsl:apply-templates/></STRONG></html></template>
 	<template name="bold" match="bold"><latex>\textbf{<xsl:apply-templates/>}</latex><html><B><xsl:apply-templates/></B></html></template>
-	<template name="quote" match="quote"><latex><xsl:text>``{</xsl:text><xsl:apply-templates/><xsl:text>}''</xsl:text></latex><html><xsl:text>&#8220;</xsl:text><xsl:apply-templates/><xsl:text>&#8221;</xsl:text></html></template>
 	<template name="term" match="term"><latex>\term<xsl:apply-templates/>}</latex><html><I CLASS="term"><xsl:apply-templates/></I></html></template>
 	<template name="foreign" match="foreign"><latex><xsl:text>\foreign{</xsl:text><xsl:apply-templates/><xsl:text>}</xsl:text></latex><html><I CLASS="foreign"><xsl:apply-templates/></I></html></template>
 	<template name="code" match="code">
@@ -79,6 +78,42 @@
 		<html><CODE><xsl:apply-templates/></CODE></html>
 	</template>
 
+	<!-- Quoted text. Handles nested quotes correctly. -->
+	<template name="single-quote" match="quote[@single='yes']">
+		<latex>`{<xsl:apply-templates/>}'</latex>
+		<html>&#8216;<xsl:apply-templates/>&#8217;</html>
+	</template>
+	<template name="double-quote" match="quote">
+		<latex>``{<xsl:apply-templates/>}''</latex>
+		<html>&#8220;<xsl:apply-templates/>&#8221;</html>
+	</template>
+	<template name="nested-double-quote" match="quote//quote">
+		<common>
+			<xsl:choose>
+				<xsl:when test="(count(ancestor::quote) mod 2) = 0">
+					<xsl:call-template name="double-quote"/>
+				</xsl:when>
+				<xsl:otherwise>
+					<xsl:call-template name="single-quote"/>
+				</xsl:otherwise>
+			</xsl:choose>
+		</common>
+	</template>
+	<template name="nested-single-quote" match="quote[@single='yes']//quote" priority="2">
+		<common>
+			<xsl:choose>
+				<xsl:when test="(count(ancestor::quote) mod 2) = 0">
+					<xsl:call-template name="single-quote"/>
+				</xsl:when>
+				<xsl:otherwise>
+					<xsl:call-template name="double-quote"/>
+				</xsl:otherwise>
+			</xsl:choose>
+		</common>
+	</template>
+	<alias source="q" target="single-quote"/>
+	<alias source="qq" target="double-quote"/>
+
 	<template name="code-block" match="code-block">
 		<latex>
 			<xsl:text>\begin{verbatim}</xsl:text>
