diff --git a/extensions/markdown-language-features/src/features/foldingProvider.ts b/extensions/markdown-language-features/src/features/foldingProvider.ts
index 236908a1f1f..5f0d6480ff3 100644
--- a/extensions/markdown-language-features/src/features/foldingProvider.ts
+++ b/extensions/markdown-language-features/src/features/foldingProvider.ts
@@ -7,6 +7,7 @@ import * as vscode from 'vscode';
 
 import { MarkdownEngine } from '../markdownEngine';
 import { TableOfContentsProvider } from '../tableOfContentsProvider';
+import { Token } from 'markdown-it';
 
 const rangeLimit = 5000;
 
@@ -16,15 +17,44 @@ export default class MarkdownFoldingProvider implements vscode.FoldingRangeProvi
 		private readonly engine: MarkdownEngine
 	) { }
 
+	private async getRegions(document: vscode.TextDocument): Promise<vscode.FoldingRange[]> {
+
+		const isStartRegion = (t: string) => /^\s*<!--\s*#?region\b.*-->/.test(t);
+		const isEndRegion = (t: string) => /^\s*<!--\s*#?endregion\b.*-->/.test(t);
+
+		const isRegionMarker = (token: Token) => token.type === 'html_block' &&
+			(isStartRegion(token.content) || isEndRegion(token.content));
+
+
+		const tokens = await this.engine.parse(document.uri, document.getText());
+		const regionMarkers = tokens.filter(isRegionMarker)
+			.map(token => ({ line: token.map[0], isStart: isStartRegion(token.content) }));
+
+		const nestingStack: { line: number, isStart: boolean }[] = [];
+		return regionMarkers
+			.map(marker => {
+				if (marker.isStart) {
+					nestingStack.push(marker);
+				} else if (nestingStack.length && nestingStack[nestingStack.length - 1].isStart) {
+					return new vscode.FoldingRange(nestingStack.pop()!.line, marker.line, vscode.FoldingRangeKind.Region);
+				} else {
+					// noop: invalid nesting (i.e. [end, start] or [start, end, end])
+				}
+				return null;
+			})
+			.filter((region: vscode.FoldingRange | null): region is vscode.FoldingRange => !!region);
+	}
+
 	public async provideFoldingRanges(
 		document: vscode.TextDocument,
 		_: vscode.FoldingContext,
 		_token: vscode.CancellationToken
 	): Promise<vscode.FoldingRange[]> {
 		const tocProvider = new TableOfContentsProvider(this.engine, document);
-		let toc = await tocProvider.getToc();
-		if (toc.length > rangeLimit) {
-			toc = toc.slice(0, rangeLimit);
+		let [regions, toc] = await Promise.all([this.getRegions(document), tocProvider.getToc()]);
+
+		if (toc.length > rangeLimit - regions.length) {
+			toc = toc.slice(0, rangeLimit - regions.length);
 		}
 
 		const foldingRanges = toc.map((entry, startIndex) => {
@@ -44,7 +74,6 @@ export default class MarkdownFoldingProvider implements vscode.FoldingRangeProvi
 				typeof end === 'number' ? end : document.lineCount - 1);
 		});
 
-
-		return foldingRanges;
+		return [...regions, ...foldingRanges];
 	}
 }
\ No newline at end of file
diff --git a/extensions/markdown-language-features/src/test/foldingProvider.test.ts b/extensions/markdown-language-features/src/test/foldingProvider.test.ts
index 44c570d64d4..cd3b82d599e 100644
--- a/extensions/markdown-language-features/src/test/foldingProvider.test.ts
+++ b/extensions/markdown-language-features/src/test/foldingProvider.test.ts
@@ -78,6 +78,31 @@ y`);
 		assert.strictEqual(firstFold.end, 2);
 	});
 
+	test('Should fold nested <!-- #region --> markers', async () => {
+		const folds = await getFoldsForDocument(`a
+<!-- #region -->
+b
+<!-- #region hello!-->
+b.a
+<!-- #endregion -->
+b
+<!-- #region: foo! -->
+b.b
+<!-- #endregion: foo -->
+b
+<!-- #endregion -->
+a`);
+		assert.strictEqual(folds.length, 3);
+		const [outer, first, second] = folds.sort((a, b) => a.start - b.start);
+
+		assert.strictEqual(outer.start, 1);
+		assert.strictEqual(outer.end, 11);
+		assert.strictEqual(first.start, 3);
+		assert.strictEqual(first.end, 5);
+		assert.strictEqual(second.start, 7);
+		assert.strictEqual(second.end, 9);
+	});
+
 });