diff --git a/decoder_test.go b/decoder_test.go
index b5d17de..a8e7085 100644
--- a/decoder_test.go
+++ b/decoder_test.go
@@ -94,7 +94,12 @@ func TestDecode_interface(t *testing.T) {
 		{
 			"multiline_indented.hcl",
 			false,
-			map[string]interface{}{"foo": "        bar\n        baz\n"},
+			map[string]interface{}{"foo": "  bar\n  baz\n"},
+		},
+		{
+			"multiline_no_hanging_indent.hcl",
+			false,
+			map[string]interface{}{"foo": "  baz\n    bar\n      foo\n"},
 		},
 		{
 			"multiline_no_eof.hcl",
diff --git a/hcl/token/token.go b/hcl/token/token.go
index 58868c0..6e99498 100644
--- a/hcl/token/token.go
+++ b/hcl/token/token.go
@@ -142,14 +142,7 @@ func (t Token) Value() interface{} {
 	case IDENT:
 		return t.Text
 	case HEREDOC:
-		// We need to find the end of the marker
-		idx := strings.IndexByte(t.Text, '\n')
-		if idx == -1 {
-			panic("heredoc doesn't contain newline")
-		}
-
-		// Trim any trailing whitespace from the start of the marker
-		return strings.TrimRight(string(t.Text[idx+1:len(t.Text)-idx+1]), " \t")
+		return unindentHeredoc(t.Text)
 	case STRING:
 		// Determine the Unquote method to use. If it came from JSON,
 		// then we need to use the built-in unquote since we have to
@@ -169,3 +162,53 @@ func (t Token) Value() interface{} {
 		panic(fmt.Sprintf("unimplemented Value for type: %s", t.Type))
 	}
 }
+
+// unindentHeredoc returns the string content of a HEREDOC if it is started with <<
+// and the content of a HEREDOC with the hanging indent removed if it is started with
+// a <<-, and the terminating line is at least as indented as the least indented line.
+func unindentHeredoc(heredoc string) string {
+	// We need to find the end of the marker
+	idx := strings.IndexByte(heredoc, '\n')
+	if idx == -1 {
+		panic("heredoc doesn't contain newline")
+	}
+
+	unindent := heredoc[2] == '-'
+
+	// We can optimize if the heredoc isn't marked for indentation
+	if !unindent {
+		return string(heredoc[idx+1 : len(heredoc)-idx+1])
+	}
+
+	// We need to unindent each line based on the indentation level of the marker
+	lines := strings.Split(string(heredoc[idx+1:len(heredoc)-idx+2]), "\n")
+	whitespacePrefix := lines[len(lines)-1]
+
+	isIndented := true
+	for _, v := range lines {
+		if strings.HasPrefix(v, whitespacePrefix) {
+			continue
+		}
+
+		isIndented = false
+		break
+	}
+
+	// If all lines are not at least as indented as the terminating mark, return the
+	// heredoc as is, but trim the leading space from the marker on the final line.
+	if !isIndented {
+		return strings.TrimRight(string(heredoc[idx+1:len(heredoc)-idx+1]), " \t")
+	}
+
+	unindentedLines := make([]string, len(lines))
+	for k, v := range lines {
+		if k == len(lines)-1 {
+			unindentedLines[k] = ""
+			break
+		}
+
+		unindentedLines[k] = strings.TrimPrefix(v, whitespacePrefix)
+	}
+
+	return strings.Join(unindentedLines, "\n")
+}
diff --git a/test-fixtures/multiline_indented.hcl b/test-fixtures/multiline_indented.hcl
index 8ac2ecc..f1d7a84 100644
--- a/test-fixtures/multiline_indented.hcl
+++ b/test-fixtures/multiline_indented.hcl
@@ -1,4 +1,4 @@
 foo = <<-EOF
         bar
         baz
-    EOF
+      EOF
diff --git a/test-fixtures/multiline_no_hanging_indent.hcl b/test-fixtures/multiline_no_hanging_indent.hcl
new file mode 100644
index 0000000..c4331ee
--- /dev/null
+++ b/test-fixtures/multiline_no_hanging_indent.hcl
@@ -0,0 +1,5 @@
+foo = <<-EOF
+  baz
+    bar
+      foo
+      EOF