diff --git a/demo/kitchen-sink/docs/matlab.matlab b/demo/kitchen-sink/docs/matlab.matlab
index 30404ce4..b2ca44d5 100644
--- a/demo/kitchen-sink/docs/matlab.matlab
+++ b/demo/kitchen-sink/docs/matlab.matlab
@@ -1 +1,17 @@
-TODO
\ No newline at end of file
+%{
+   %{
+      Ace Matlab demo
+   %}
+%}
+
+classdef hello
+   methods
+      function greet(this)
+         disp('Hello!')  % say hi
+      end
+   end
+end
+
+% transpose 
+a = [ 'x''y', "x\n\
+      y", 1' ]' + 2'
\ No newline at end of file
diff --git a/lib/ace/mode/matlab_highlight_rules.js b/lib/ace/mode/matlab_highlight_rules.js
index 14474e2c..ee0e1ca8 100644
--- a/lib/ace/mode/matlab_highlight_rules.js
+++ b/lib/ace/mode/matlab_highlight_rules.js
@@ -164,15 +164,53 @@ var keywords = (
     }, "identifier", true);
 
     this.$rules = {
-        "start" : [ {
+        // allowQstring
+        start: [{ 
+            token : "string",
+            regex : "'",
+            stateName : "qstring",
+            next  : [{
+                token : "constant.language.escape",
+                regex : "''"
+            }, {
+                token : "string",
+                regex : "'|$",
+                next  : "start"
+            }, {
+                defaultToken: "string"
+            }]
+        }, {
+            token : "text",
+            regex : "\\s+"
+        }, {
+            regex: "",
+            next: "noQstring"
+        }],        
+        noQstring : [{
+            regex: "^\\s*%{\\s*$",
+            token: "comment.start",
+            push: "blockComment"
+        }, {
             token : "comment",
             regex : "%[^\r\n]*"
         }, {
-             token : "string",           // " string
-            regex : '".*?"'
-        }, {
-            token : "string",           // ' string
-            regex : "'.*?'"
+            token : "string",
+            regex : '"',
+            stateName : "qqstring",
+            next  : [{
+                token : "constant.language.escape",
+                regex : /\\./
+            }, {
+                token : "string",
+                regex : "\\\\$",
+                next  : "qqstring"
+            }, {
+                token : "string",
+                regex : '"|$',
+                next  : "start"
+            }, {
+                defaultToken: "string"
+            }]
         }, {
             token : "constant.numeric", // float
             regex : "[+-]?\\d+(?:(?:\\.\\d*)?(?:[eE][+-]?\\d+)?)?\\b"
@@ -181,21 +219,41 @@ var keywords = (
             regex : "[a-zA-Z_$][a-zA-Z0-9_$]*\\b"
         }, {
             token : "keyword.operator",
-            regex : "\\+|\\-|\\/|\\/\\/|<@>|@>|<@|&|\\^|~|<|>|<=|=>|==|!=|<>|="
+            regex : "\\+|\\-|\\/|\\/\\/|<@>|@>|<@|&|\\^|~|<|>|<=|=>|==|!=|<>|=",
+            next: "start"
         }, {
-             token : "punctuation.operator",
-             regex : "\\?|\\:|\\,|\\;|\\."
+            token : "punctuation.operator",
+            regex : "\\?|\\:|\\,|\\;|\\.",
+            next: "start"
         }, {
             token : "paren.lparen",
-            regex : "[\\(]"
+            regex : "[({\\[]",
+            next: "start"
         }, {
             token : "paren.rparen",
-            regex : "[\\)]"
+            regex : "[\\]})]"
         }, {
             token : "text",
             regex : "\\s+"
-        } ]
+        }, {
+            token : "text",
+            regex : "$",
+            next  : "start"
+        }],
+        blockComment: [{
+            regex: "^\\s*%{\\s*$",
+            token: "comment.start",
+            push: "blockComment"
+        }, {
+            regex: "^\\s*%}\\s*$",
+            token: "comment.end",
+            next: "pop"
+        }, {
+            defaultToken: "comment"
+        }],
     };
+    
+    this.normalizeRules();
 };
 
 oop.inherits(MatlabHighlightRules, TextHighlightRules);