diff --git a/lib/liquid/tags/capture.rb b/lib/liquid/tags/capture.rb
index 52db6169..a0cbe345 100644
--- a/lib/liquid/tags/capture.rb
+++ b/lib/liquid/tags/capture.rb
@@ -26,7 +26,7 @@ module Liquid
 
     def render(context)
       output = super
-      context[@to] = output.join
+      context.scopes.last[@to.to_s] = output.join
       ''
     end
   end
diff --git a/test/capture_test.rb b/test/capture_test.rb
new file mode 100644
index 00000000..ea934064
--- /dev/null
+++ b/test/capture_test.rb
@@ -0,0 +1,41 @@
+require File.dirname(__FILE__) + '/helper'
+
+class CaptureTest < Test::Unit::TestCase
+  include Liquid
+  
+  def test_captures_block_content_in_variable
+    assert_template_result("test string", "{% capture 'var' %}test string{% endcapture %}{{var}}", {})    
+  end
+
+  def test_capture_to_variable_from_outer_scope_if_existing
+    template_source = <<-END_TEMPLATE
+      {% assign var = '' %}
+      {% if true %}
+        {% capture var %}first-block-string{% endcapture %}
+      {% endif %}
+      {% if true %}
+        {% capture var %}test-string{% endcapture %}
+      {% endif %}
+      {{var}}
+    END_TEMPLATE
+    template = Template.parse(template_source)
+    rendered = template.render
+    assert_equal "test-string", rendered.gsub(/\s/, '')
+  end
+  
+  def test_assigning_from_capture
+    template_source = <<-END_TEMPLATE
+      {% assign first = '' %}
+      {% assign second = '' %}
+      {% for number in (1..3) %}
+        {% capture first %}{{number}}{% endcapture %}
+        {% assign second = first %}
+      {% endfor %}
+      {{ first }}-{{ second }}
+    END_TEMPLATE
+    template = Template.parse(template_source)
+    rendered = template.render
+    assert_equal "3-3", rendered.gsub(/\s/, '')
+  end
+  
+end
\ No newline at end of file