diff --git a/nbconvert.py b/nbconvert.py
index 7177508..9934e43 100755
--- a/nbconvert.py
+++ b/nbconvert.py
@@ -475,9 +475,12 @@ def highlight(src, lang='python'):
 class ConverterMarkdown(Converter):
     extension = 'md'
 
-    def __init__(self, infile, highlight_source=False):
+    def __init__(self, infile, highlight_source=True, show_prompts=False,
+                 inline_prompt=False):
         super(ConverterMarkdown, self).__init__(infile)
         self.highlight_source = highlight_source
+        self.show_prompts = show_prompts
+        self.inline_prompt = inline_prompt
 
     @DocInherit
     def render_heading(self, cell):
@@ -488,13 +491,18 @@ class ConverterMarkdown(Converter):
         if not cell.input:
             return []
         lines = []
-        #lines.append('----')
-        lines.extend(['*In[%s]:*' % cell.prompt_number, ''])
-        src = highlight(cell.input) if self.highlight_source else \
-          indent(cell.input)
+        if self.show_prompts and not self.inline_prompt:
+            lines.extend(['*In[%s]:*' % cell.prompt_number, ''])
+        if self.show_prompts and self.inline_prompt:
+            prompt = 'In[%s]: ' % cell.prompt_number
+            input_lines = cell.input.split('\n')
+            src = prompt + input_lines[0] + '\n' + indent('\n'.join(input_lines[1:]), nspaces=len(prompt))
+        else:
+            src = cell.input
+        src = highlight(src) if self.highlight_source else indent(src)
         lines.extend([src, ''])
-        if cell.outputs:
-            lines.extend(['==>', ''])
+        if cell.outputs and self.show_prompts and not self.inline_prompt:
+            lines.extend(['*Out[%s]:*' % cell.prompt_number, ''])
         for output in cell.outputs:
             conv_fn = self.dispatch(output.output_type)
             lines.extend(conv_fn(output))
@@ -538,7 +546,7 @@ class ConverterMarkdown(Converter):
 
     @DocInherit
     def _img_lines(self, img_file):
-        return ['', '![image](%s)' % img_file, '']
+        return ['', '![](%s)' % img_file, '']
     
     @DocInherit
     def render_display_format_text(self, output):