diff --git a/compiler/generate/index.js b/compiler/generate/index.js
index 841f87f17b..b7fb973375 100644
--- a/compiler/generate/index.js
+++ b/compiler/generate/index.js
@@ -410,7 +410,7 @@ export default function generate ( parsed, template ) {
 							}
 
 							const iteration = ${name}_iterations[i];
-							${name}_iterations[i].update( ${current.contextChain.join( ', ' )}, ${expression}[i] );
+							${name}_iterations[i].update( ${current.contextChain.join( ', ' )}, ${expression}[i]${node.index ? `, i` : ''} );
 						}
 
 						for ( var i = ${expression}.length; i < ${name}_iterations.length; i += 1 ) {
@@ -425,18 +425,28 @@ export default function generate ( parsed, template ) {
 						for ( let i = 0; i < ${name}_iterations.length; i += 1 ) {
 							${name}_iterations[i].teardown();
 						}
+
+						${name}_anchor.parentNode.removeChild( ${name}_anchor );
 					` );
 
 					const contexts = Object.assign( {}, current.contexts );
+					const contextChain = current.contextChain.concat( node.context );
+
 					contexts[ node.context ] = true;
 
+					if ( node.index ) {
+						// not strictly a context, but we can treat it as such
+						contextChain.push( node.index );
+						contexts[ node.index ] = true;
+					}
+
 					current = {
 						useAnchor: false,
 						name: renderer,
 						target: 'target',
 
 						contexts,
-						contextChain: current.contextChain.concat( node.context ),
+						contextChain,
 
 						initStatements: [],
 						updateStatements: [],
diff --git a/test/compiler/each-block-indexed/_config.js b/test/compiler/each-block-indexed/_config.js
new file mode 100644
index 0000000000..34640e18cb
--- /dev/null
+++ b/test/compiler/each-block-indexed/_config.js
@@ -0,0 +1,6 @@
+export default {
+	data: {
+		animals: [ 'adder', 'blue whale', 'chameleon' ]
+	},
+	html: `<p>0: adder</p><p>1: blue whale</p><p>2: chameleon</p><!--#each animals-->`
+};
diff --git a/test/compiler/each-block-indexed/main.svelte b/test/compiler/each-block-indexed/main.svelte
new file mode 100644
index 0000000000..5c1c74da66
--- /dev/null
+++ b/test/compiler/each-block-indexed/main.svelte
@@ -0,0 +1,3 @@
+{{#each animals as animal, i}}
+	<p>{{i}}: {{animal}}</p>
+{{/each}}