diff --git a/extensions/markdown-language-features/src/features/foldingProvider.ts b/extensions/markdown-language-features/src/features/foldingProvider.ts
index 69e6daabf3f..2de47bd78ca 100644
--- a/extensions/markdown-language-features/src/features/foldingProvider.ts
+++ b/extensions/markdown-language-features/src/features/foldingProvider.ts
@@ -88,7 +88,10 @@ export default class MarkdownFoldingProvider implements vscode.FoldingRangeProvi
 		const multiLineListItems = tokens.filter(isFoldableToken);
 		return multiLineListItems.map(listItem => {
 			const start = listItem.map[0];
-			const end = listItem.map[1] - 1;
+			let end = listItem.map[1] - 1;
+			if (document.lineAt(end).isEmptyOrWhitespace && end >= start + 1) {
+				end = end - 1;
+			}
 			return new vscode.FoldingRange(start, end);
 		});
 	}
diff --git a/extensions/markdown-language-features/src/test/foldingProvider.test.ts b/extensions/markdown-language-features/src/test/foldingProvider.test.ts
index 285d5e58325..2ad8444d967 100644
--- a/extensions/markdown-language-features/src/test/foldingProvider.test.ts
+++ b/extensions/markdown-language-features/src/test/foldingProvider.test.ts
@@ -114,7 +114,7 @@ d`);
 		assert.strictEqual(firstFold.end, 3);
 	});
 
-	test('Should fold if list has multiple lines of content', async () => {
+	test('lists folds should span multiple lines of content', async () => {
 		const folds = await getFoldsForDocument(`a
 - This list item\n  spans multiple\n  lines.`);
 		assert.strictEqual(folds.length, 1);
@@ -123,6 +123,18 @@ d`);
 		assert.strictEqual(firstFold.end, 3);
 	});
 
+	test('List should leave single blankline before new element', async () => {
+		const folds = await getFoldsForDocument(`- a
+a
+
+
+b`);
+		assert.strictEqual(folds.length, 1);
+		const firstFold = folds[0];
+		assert.strictEqual(firstFold.start, 0);
+		assert.strictEqual(firstFold.end, 3);
+	});
+
 	test('Should fold fenced code blocks', async () => {
 		const folds = await getFoldsForDocument(`~~~ts
 a