diff --git a/package.json b/package.json
index d1b9122a62..f8f0106a32 100644
--- a/package.json
+++ b/package.json
@@ -26,10 +26,9 @@
   "dependencies": {
     "browser-request": "^0.3.3",
     "classnames": "^2.1.2",
-    "draft-js": "^0.7.0",
-    "draft-js-export-html": "^0.2.2",
+    "draft-js": "^0.8.1",
+    "draft-js-export-html": "^0.4.0",
     "draft-js-export-markdown": "^0.2.0",
-    "draft-js-import-markdown": "^0.1.6",
     "emojione": "2.2.3",
     "favico.js": "^0.3.10",
     "filesize": "^3.1.2",
diff --git a/src/RichText.js b/src/RichText.js
index 7cd78a14c9..073d873945 100644
--- a/src/RichText.js
+++ b/src/RichText.js
@@ -14,23 +14,7 @@ import {
 } from 'draft-js';
 import * as sdk from  './index';
 import * as emojione from 'emojione';
-
-const BLOCK_RENDER_MAP = DefaultDraftBlockRenderMap.set('unstyled', {
-    element: 'span',
-    /*
-     draft uses <div> by default which we don't really like, so we're using <span>
-     this is probably not a good idea since <span> is not a block level element but
-     we're trying to fix things in contentStateToHTML below
-     */
-});
-
-const STYLES = {
-    BOLD: 'strong',
-    CODE: 'code',
-    ITALIC: 'em',
-    STRIKETHROUGH: 's',
-    UNDERLINE: 'u',
-};
+import {stateToHTML} from 'draft-js-export-html';
 
 const MARKDOWN_REGEX = {
     LINK: /(?:\[([^\]]+)\]\(([^\)]+)\))|\<(\w+:\/\/[^\>]+)\>/g,
@@ -42,36 +26,7 @@ const USERNAME_REGEX = /@\S+:\S+/g;
 const ROOM_REGEX = /#\S+:\S+/g;
 const EMOJI_REGEX = new RegExp(emojione.unicodeRegexp, 'g');
 
-export function contentStateToHTML(contentState: ContentState): string {
-    return contentState.getBlockMap().map((block) => {
-        let elem = BLOCK_RENDER_MAP.get(block.getType()).element;
-        let content = [];
-        block.findStyleRanges(
-            () => true, // always return true => don't filter any ranges out
-            (start, end) => {
-                // map style names to elements
-                let tags = block.getInlineStyleAt(start).map(style => STYLES[style]).filter(style => !!style);
-                // combine them to get well-nested HTML
-                let open = tags.map(tag => `<${tag}>`).join('');
-                let close = tags.map(tag => `</${tag}>`).reverse().join('');
-                // and get the HTML representation of this styled range (this .substring() should never fail)
-                let text = block.getText().substring(start, end);
-                // http://shebang.brandonmintern.com/foolproof-html-escaping-in-javascript/
-                let div = document.createElement('div');
-                div.appendChild(document.createTextNode(text));
-                let safeText = div.innerHTML;
-                content.push(`${open}${safeText}${close}`);
-            }
-        );
-
-        let result = `<${elem}>${content.join('')}</${elem}>`;
-
-        // dirty hack because we don't want block level tags by default, but breaks
-        if (elem === 'span')
-            result += '<br />';
-        return result;
-    }).join('');
-}
+export const contentStateToHTML = stateToHTML;
 
 export function HTMLtoContentState(html: string): ContentState {
     return ContentState.createFromBlockArray(convertFromHTML(html));
@@ -98,6 +53,19 @@ function unicodeToEmojiUri(str) {
     return str;
 }
 
+/**
+ * Utility function that looks for regex matches within a ContentBlock and invokes {callback} with (start, end)
+ * From https://facebook.github.io/draft-js/docs/advanced-topics-decorators.html
+ */
+function findWithRegex(regex, contentBlock: ContentBlock, callback: (start: number, end: number) => any) {
+    const text = contentBlock.getText();
+    let matchArr, start;
+    while ((matchArr = regex.exec(text)) !== null) {
+        start = matchArr.index;
+        callback(start, start + matchArr[0].length);
+    }
+}
+
 // Workaround for https://github.com/facebook/draft-js/issues/414
 let emojiDecorator = {
     strategy: (contentBlock, callback) => {
@@ -178,19 +146,6 @@ export function getScopedMDDecorators(scope: any): CompositeDecorator {
     return markdownDecorators;
 }
 
-/**
- * Utility function that looks for regex matches within a ContentBlock and invokes {callback} with (start, end)
- * From https://facebook.github.io/draft-js/docs/advanced-topics-decorators.html
- */
-function findWithRegex(regex, contentBlock: ContentBlock, callback: (start: number, end: number) => any) {
-    const text = contentBlock.getText();
-    let matchArr, start;
-    while ((matchArr = regex.exec(text)) !== null) {
-        start = matchArr.index;
-        callback(start, start + matchArr[0].length);
-    }
-}
-
 /**
  * Passes rangeToReplace to modifyFn and replaces it in contentState with the result.
  */
diff --git a/src/components/views/rooms/MessageComposer.js b/src/components/views/rooms/MessageComposer.js
index 7b84d394e0..3d01052ccf 100644
--- a/src/components/views/rooms/MessageComposer.js
+++ b/src/components/views/rooms/MessageComposer.js
@@ -42,6 +42,10 @@ export default class MessageComposer extends React.Component {
         this.state = {
             autocompleteQuery: '',
             selection: null,
+            selectionInfo: {
+                style: [],
+                blockType: null,
+            },
         };
 
     }
@@ -127,10 +131,11 @@ export default class MessageComposer extends React.Component {
         });
     }
 
-    onInputContentChanged(content: string, selection: {start: number, end: number}) {
+    onInputContentChanged(content: string, selection: {start: number, end: number}, selectionInfo) {
         this.setState({
             autocompleteQuery: content,
             selection,
+            selectionInfo,
         });
     }
 
@@ -155,6 +160,10 @@ export default class MessageComposer extends React.Component {
         }
     }
 
+    onFormatButtonClicked(name: "bold" | "italic" | "strike" | "quote" | "bullet" | "numbullet", event) {
+        this.messageComposerInput.onFormatButtonClicked(name, event);
+    }
+
     render() {
         var me = this.props.room.getMember(MatrixClientPeg.get().credentials.userId);
         var uploadInputStyle = {display: 'none'};
@@ -207,6 +216,12 @@ export default class MessageComposer extends React.Component {
                 </div>
             );
 
+            const formattingButton = (
+                <img title="Text Formatting"
+                     src="img/button-text-formatting.svg"
+                     key="controls_formatting" />
+            );
+
             controls.push(
                 <MessageComposerInput
                     ref={c => this.messageComposerInput = c}
@@ -218,6 +233,7 @@ export default class MessageComposer extends React.Component {
                     onDownArrow={this.onDownArrow}
                     tabComplete={this.props.tabComplete} // used for old messagecomposerinput/tabcomplete
                     onContentChanged={this.onInputContentChanged} />,
+                formattingButton,
                 uploadButton,
                 hangupButton,
                 callButton,
@@ -242,6 +258,17 @@ export default class MessageComposer extends React.Component {
             </div>;
         }
 
+
+        const {style, blockType} = this.state.selectionInfo;
+        const formatButtons = ["bold", "italic", "strike", "quote", "bullet", "numbullet"].map(
+            name => {
+                const active = style.includes(name) || blockType === name;
+                const suffix = active ? '-o-n' : '';
+                const onFormatButtonClicked = this.onFormatButtonClicked.bind(this, name);
+                return <img className="mx_MessageComposer_format_button" title={name} onClick={onFormatButtonClicked} key={name} src={`img/button-text-${name}${suffix}.svg`} height="17" />;
+            },
+        );
+
         return (
             <div className="mx_MessageComposer mx_fadable" style={{ opacity: this.props.opacity }}>
                 {autoComplete}
@@ -250,6 +277,11 @@ export default class MessageComposer extends React.Component {
                         {controls}
                     </div>
                 </div>
+                {UserSettingsStore.isFeatureEnabled('rich_text_editor') ?
+                    <div className="mx_MessageComposer_formatbar">
+                        {formatButtons}
+                    </div> : null
+                }
             </div>
         );
     }
diff --git a/src/components/views/rooms/MessageComposerInput.js b/src/components/views/rooms/MessageComposerInput.js
index 2d42b65246..aebb1855f3 100644
--- a/src/components/views/rooms/MessageComposerInput.js
+++ b/src/components/views/rooms/MessageComposerInput.js
@@ -32,6 +32,7 @@ import {Editor, EditorState, RichUtils, CompositeDecorator,
     getDefaultKeyBinding, KeyBindingUtil, ContentState} from 'draft-js';
 
 import {stateToMarkdown} from 'draft-js-export-markdown';
+import classNames from 'classnames';
 
 import MatrixClientPeg from '../../../MatrixClientPeg';
 import type {MatrixClient} from 'matrix-js-sdk/lib/matrix';
@@ -359,9 +360,12 @@ export default class MessageComposerInput extends React.Component {
         }
 
         if (this.props.onContentChanged) {
-            this.props.onContentChanged(editorState.getCurrentContent().getPlainText(),
-                RichText.selectionStateToTextOffsets(editorState.getSelection(),
-                    editorState.getCurrentContent().getBlocksAsArray()));
+            const textContent = editorState.getCurrentContent().getPlainText();
+            const selection = RichText.selectionStateToTextOffsets(editorState.getSelection(),
+                editorState.getCurrentContent().getBlocksAsArray());
+            const selectionInfo = this.getSelectionInfo(editorState);
+
+            this.props.onContentChanged(textContent, selection, selectionInfo);
         }
     }
 
@@ -418,6 +422,7 @@ export default class MessageComposerInput extends React.Component {
             this.setEditorState(newState);
             return true;
         }
+
         return false;
     }
 
@@ -536,12 +541,79 @@ export default class MessageComposerInput extends React.Component {
         setTimeout(() => this.refs.editor.focus(), 50);
     }
 
-    render() {
-        let className = "mx_MessageComposer_input";
+    onFormatButtonClicked(name: "bold" | "italic" | "strike" | "quote" | "bullet" | "numbullet", e) {
+        const style = {
+            bold: 'BOLD',
+            italic: 'ITALIC',
+            strike: 'STRIKETHROUGH',
+        }[name];
 
-        if (this.state.isRichtextEnabled) {
-            className += " mx_MessageComposer_input_rte"; // placeholder indicator for RTE mode
+        if (style) {
+            e.preventDefault();
+            this.setEditorState(RichUtils.toggleInlineStyle(this.state.editorState, style));
+        } else {
+            const blockType = {
+                quote: 'blockquote',
+                bullet: 'unordered-list-item',
+                numbullet: 'ordered-list-item',
+            }[name];
+
+            if (blockType) {
+                e.preventDefault();
+                this.setEditorState(RichUtils.toggleBlockType(this.state.editorState, blockType));
+            } else {
+                console.error(`Unknown formatting style "${name}", ignoring.`);
+            }
         }
+    }
+
+    /* returns inline style and block type of current SelectionState so MessageComposer can render formatting
+    buttons. */
+    getSelectionInfo(editorState: EditorState) {
+        const styleName = {
+            BOLD: 'bold',
+            ITALIC: 'italic',
+            STRIKETHROUGH: 'strike',
+        };
+
+        const originalStyle = editorState.getCurrentInlineStyle().toArray();
+        const style = originalStyle
+                .map(style => styleName[style] || null)
+                .filter(styleName => !!styleName);
+
+        const blockName = {
+            blockquote: 'quote',
+            'unordered-list-item': 'bullet',
+            'ordered-list-item': 'numbullet',
+        };
+        const originalBlockType = editorState.getCurrentContent()
+            .getBlockForKey(editorState.getSelection().getStartKey())
+            .getType();
+        const blockType = blockName[originalBlockType] || null;
+
+        return {
+            style,
+            blockType,
+        };
+    }
+
+    render() {
+        const {editorState} = this.state;
+
+        // From https://github.com/facebook/draft-js/blob/master/examples/rich/rich.html#L92
+        // If the user changes block type before entering any text, we can
+        // either style the placeholder or hide it.
+        let hidePlaceholder = false;
+        const contentState = editorState.getCurrentContent();
+        if (!contentState.hasText()) {
+            if (contentState.getBlockMap().first().getType() !== 'unstyled') {
+                hidePlaceholder = true;
+            }
+        }
+
+        const className = classNames('mx_MessageComposer_input', {
+            mx_MessageComposer_input_empty: hidePlaceholder,
+        });
 
         return (
             <div className={className}