diff --git a/lib/ace/mode/ruby.js b/lib/ace/mode/ruby.js
index 27bc6c38..76bc2d6f 100644
--- a/lib/ace/mode/ruby.js
+++ b/lib/ace/mode/ruby.js
@@ -74,14 +74,21 @@ oop.inherits(Mode, TextMode);
     };
 
     this.checkOutdent = function(state, line, input) {
-        return /^\s+end$/.test(line + input) || /^\s+}$/.test(line + input) || /^\s+else$/.test(line + input);
+        return /^\s+(end|else)$/.test(line + input) || this.$outdent.checkOutdent(line, input);
     };
 
-    this.autoOutdent = function(state, doc, row) {
-        var indent = this.$getIndent(doc.getLine(row));
-        var tab = doc.getTabString();
-        if (indent.slice(-tab.length) == tab)
-            doc.remove(new Range(row, indent.length-tab.length, row, indent.length));
+    this.autoOutdent = function(state, session, row) {
+        var line = session.getLine(row);
+        if (/}/.test(line))
+            return this.$outdent.autoOutdent(session, row);
+        var indent = this.$getIndent(line);
+        var prevLine = session.getLine(row - 1);
+        var prevIndent = this.$getIndent(prevLine);
+        var tab = session.getTabString();
+        if (prevIndent.length <= indent.length) {
+            if (indent.slice(-tab.length) == tab)
+                session.remove(new Range(row, indent.length-tab.length, row, indent.length));
+        }
     };
 
     this.$id = "ace/mode/ruby";