diff --git a/hgext/releasenotes.py b/hgext/releasenotes.py
--- a/hgext/releasenotes.py
+++ b/hgext/releasenotes.py
@@ -185,8 +185,8 @@ def parsereleasenotesfile(sections, text
 
     blocks = minirst.parse(text)[0]
 
-    def gatherparagraphs(offset):
-        paragraphs = []
+    def gatherparagraphsbullets(offset, title=False):
+        notefragment = []
 
         for i in range(offset + 1, len(blocks)):
             block = blocks[i]
@@ -198,17 +198,27 @@ def parsereleasenotesfile(sections, text
             elif block['type'] == 'bullet':
                 if block['indent'] != 0:
                     raise error.Abort(_('indented bullet lists not supported'))
+                if title:
+                    lines = [l[1:].strip() for l in block['lines']]
+                    notefragment.append(lines)
+                    continue
+                else:
+                    lines = [[l[1:].strip() for l in block['lines']]]
 
-                lines = [l[1:].strip() for l in block['lines']]
-                paragraphs.append(lines)
-                continue
+                    for block in blocks[i + 1:]:
+                        if block['type'] in ('bullet', 'section'):
+                            break
+                        if block['type'] == 'paragraph':
+                            lines.append(block['lines'])
+                    notefragment.append(lines)
+                    continue
             elif block['type'] != 'paragraph':
                 raise error.Abort(_('unexpected block type in release notes: '
                                     '%s') % block['type'])
+            if title:
+                notefragment.append(block['lines'])
 
-            paragraphs.append(block['lines'])
-
-        return paragraphs
+        return notefragment
 
     currentsection = None
     for i, block in enumerate(blocks):
@@ -226,16 +236,18 @@ def parsereleasenotesfile(sections, text
                                   title)
 
             currentsection = name
-            paragraphs = gatherparagraphs(i)
-            if paragraphs:
-                notes.addnontitleditem(currentsection, paragraphs)
+            bullet_points = gatherparagraphsbullets(i)
+            if bullet_points:
+                for para in bullet_points:
+                    notes.addnontitleditem(currentsection, para)
 
         elif block['underline'] == '-':  # sub-section
-            paragraphs = gatherparagraphs(i)
-
             if title == BULLET_SECTION:
-                notes.addnontitleditem(currentsection, paragraphs)
+                bullet_points = gatherparagraphsbullets(i)
+                for para in bullet_points:
+                    notes.addnontitleditem(currentsection, para)
             else:
+                paragraphs = gatherparagraphsbullets(i, True)
                 notes.addtitleditem(currentsection, title, paragraphs)
         else:
             raise error.Abort(_('unsupported section type for %s') % title)
diff --git a/tests/test-releasenotes-merging.t b/tests/test-releasenotes-merging.t
--- a/tests/test-releasenotes-merging.t
+++ b/tests/test-releasenotes-merging.t
@@ -34,8 +34,7 @@ A fix directive from commit message is a
   
   * Fix from commit message.
 
-Processing again will no-op
-TODO this is buggy
+Processing again ignores the already added bullet.
 
   $ hg releasenotes -r . $TESTTMP/single-fix-bullet
 
@@ -45,8 +44,6 @@ TODO this is buggy
   
   * Fix from release notes.
   
-    Fix from commit message.
-  
   * Fix from commit message.
 
   $ cd ..
@@ -111,7 +108,7 @@ Doing it again won't add another section
 
   $ cd ..
 
-Bullets don't merge properly
+Bullets from rev merge with those from notes file.
 
   $ hg init bullets
   $ cd bullets
@@ -157,7 +154,7 @@ Bullets don't merge properly
   
   * this is fix1.
   
-    this is fix2.
+  * this is fix2.
   
   * this is fix3.
 
diff --git a/tests/test-releasenotes-parsing.t b/tests/test-releasenotes-parsing.t
--- a/tests/test-releasenotes-parsing.t
+++ b/tests/test-releasenotes-parsing.t
@@ -59,7 +59,9 @@ Multiple bullet points. With some entrie
   section: feature
     bullet point:
       paragraph: First bullet point. It has a single line.
+    bullet point:
       paragraph: Second bullet point. It consists of multiple lines.
+    bullet point:
       paragraph: Third bullet point. It has a single line.
 
 Bullet point without newline between items
@@ -77,8 +79,11 @@ Bullet point without newline between ite
   section: feature
     bullet point:
       paragraph: First bullet point
+    bullet point:
       paragraph: Second bullet point And it has multiple lines
+    bullet point:
       paragraph: Third bullet point
+    bullet point:
       paragraph: Fourth bullet point
 
 Sub-section contents are read
@@ -130,10 +135,12 @@ Multiple sections are read
   section: feature
     bullet point:
       paragraph: Feature 1
+    bullet point:
       paragraph: Feature 2
   section: fix
     bullet point:
       paragraph: Fix 1
+    bullet point:
       paragraph: Fix 2
 
 Mixed sub-sections and bullet list
@@ -166,4 +173,5 @@ Mixed sub-sections and bullet list
       paragraph: Some words about the second feature. That span multiple lines.
     bullet point:
       paragraph: Bullet item 1
+    bullet point:
       paragraph: Bullet item 2