diff --git a/IPython/nbconvert/exporters/exporter.py b/IPython/nbconvert/exporters/exporter.py
index e84b6fe..b9ba3e6 100755
--- a/IPython/nbconvert/exporters/exporter.py
+++ b/IPython/nbconvert/exporters/exporter.py
@@ -68,7 +68,8 @@ default_filters = {
         'strip_math_space': filters.strip_math_space,
         'wrap_text': filters.wrap_text,
         'escape_latex': filters.escape_latex,
-        'citation2latex': filters.citation2latex
+        'citation2latex': filters.citation2latex,
+        'path2url': filters.path2url,
 }
 
 #-----------------------------------------------------------------------------
diff --git a/IPython/nbconvert/exporters/markdown.py b/IPython/nbconvert/exporters/markdown.py
index 160fd67..5bce932 100644
--- a/IPython/nbconvert/exporters/markdown.py
+++ b/IPython/nbconvert/exporters/markdown.py
@@ -13,6 +13,7 @@ Exporter that will export your ipynb to Markdown.
 # Imports
 #-----------------------------------------------------------------------------
 
+from IPython.config import Config
 from IPython.utils.traitlets import Unicode
 
 from .exporter import Exporter
@@ -29,3 +30,9 @@ class MarkdownExporter(Exporter):
     file_extension = Unicode(
         'md', config=True, 
         help="Extension of the file that should be written to disk")
+
+    @property
+    def default_config(self):
+        c = Config({'ExtractOutputPreprocessor':{'enabled':True}})
+        c.merge(super(MarkdownExporter,self).default_config)
+        return c
diff --git a/IPython/nbconvert/filters/strings.py b/IPython/nbconvert/filters/strings.py
index 36d8b4b..be647bb 100755
--- a/IPython/nbconvert/filters/strings.py
+++ b/IPython/nbconvert/filters/strings.py
@@ -19,6 +19,7 @@ templates.
 import os
 import re
 import textwrap
+from urllib2 import quote
 from xml.etree import ElementTree
 
 from IPython.core.interactiveshell import InteractiveShell
@@ -38,6 +39,7 @@ __all__ = [
     'get_lines',
     'ipython2python',
     'posix_path',
+    'path2url',
 ]
 
 
@@ -181,3 +183,8 @@ def posix_path(path):
     if os.path.sep != '/':
         return path.replace(os.path.sep, '/')
     return path
+
+def path2url(path):
+    """Turn a file path into a URL"""
+    parts = path.split(os.path.sep)
+    return '/'.join(quote(part) for part in parts)
diff --git a/IPython/nbconvert/templates/markdown.tpl b/IPython/nbconvert/templates/markdown.tpl
index 20791b0..399c012 100644
--- a/IPython/nbconvert/templates/markdown.tpl
+++ b/IPython/nbconvert/templates/markdown.tpl
@@ -31,15 +31,15 @@
 {% endblock stream %}
 
 {% block data_svg %}
-[!image]({{ output.svg_filename }})
+![svg]({{ output.svg_filename | path2url }})
 {% endblock data_svg %}
 
 {% block data_png %}
-[!image]({{ output.png_filename }})
+![png]({{ output.png_filename | path2url }})
 {% endblock data_png %}
 
 {% block data_jpg %}
-[!image]({{ output.jpg_filename }})
+![jpeg]({{ output.jpeg_filename | path2url }})
 {% endblock data_jpg %}
 
 {% block data_latex %}