diff --git a/CHANGELOG.md b/CHANGELOG.md
index ab2b5fb100..5054d24bfa 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,7 @@
 
 ### 0.25.0
 
+- Add [prettier/plugin-pug](https://github.com/prettier/plugin-pug) as default formatter for `pug`. #527.
 - 🙌 Detect tags from @nuxt/components. Thanks to contribution from [pooya parsa](https://github.com/pi0). #1921.
 - 🙌 Fix VTI crash by passing correct PID to language server. Thanks to contribution from [Daniil Yastremskiy](@TheBeastOfCaerbannog). #1699 and #1805.
 - 🙌 Fix template interpolation hover info of v-for readonly array item. Thanks to contribution from [@yoyo930021](https://github.com/yoyo930021). #1788.
diff --git a/docs/formatting.md b/docs/formatting.md
index 60dc1bc634..d094b865a8 100644
--- a/docs/formatting.md
+++ b/docs/formatting.md
@@ -10,7 +10,7 @@ Vetur has support for formatting embedded `html/css/scss/less/postcss/stylus/js/
 
 These formatters are available:
 
-- [`prettier`](https://github.com/prettier/prettier): For css/scss/less/js/ts.
+- [`prettier`](https://github.com/prettier/prettier): For pug/css/scss/less/js/ts.
 - [`prettier-eslint`](https://github.com/prettier/prettier-eslint): For js. Run `prettier` and `eslint --fix`.
 - [`prettyhtml`](https://github.com/Prettyhtml/prettyhtml): For html.
 - [`stylus-supremacy`](https://github.com/ThisIsManta/stylus-supremacy): For stylus.
@@ -27,6 +27,7 @@ Current default:
 ```json
 {
   "vetur.format.defaultFormatter.html": "prettyhtml",
+  "vetur.format.defaultFormatter.pug": "prettier",
   "vetur.format.defaultFormatter.css": "prettier",
   "vetur.format.defaultFormatter.postcss": "prettier",
   "vetur.format.defaultFormatter.scss": "prettier",
diff --git a/package.json b/package.json
index 2c8f70d848..91fdf77cd5 100644
--- a/package.json
+++ b/package.json
@@ -285,6 +285,19 @@
           ],
           "description": "Default formatter for <template> region"
         },
+        "vetur.format.defaultFormatter.pug": {
+          "type": "string",
+          "default": "prettier",
+          "enum": [
+            "none",
+            "prettier"
+          ],
+          "enumDescriptions": [
+            "disable formatting",
+            "prettier"
+          ],
+          "description": "Default formatter for <template lang='pug'> region"
+        },
         "vetur.format.defaultFormatter.css": {
           "type": "string",
           "default": "prettier",
diff --git a/server/package.json b/server/package.json
index a0c916118d..4a98f5892a 100644
--- a/server/package.json
+++ b/server/package.json
@@ -51,6 +51,7 @@
     "vue-onsenui-helper-json": "^1.0.2"
   },
   "devDependencies": {
+    "@prettier/plugin-pug": "^1.4.4",
     "@types/eslint": "^7.2.0",
     "@types/eslint-scope": "^3.7.0",
     "@types/eslint-visitor-keys": "^1.0.0",
diff --git a/server/src/embeddedSupport/languageModes.ts b/server/src/embeddedSupport/languageModes.ts
index c333e352ec..df3637354d 100644
--- a/server/src/embeddedSupport/languageModes.ts
+++ b/server/src/embeddedSupport/languageModes.ts
@@ -35,6 +35,7 @@ import { nullMode } from '../modes/nullMode';
 import { getServiceHost, IServiceHost } from '../services/typescriptService/serviceHost';
 import { VLSFullConfig } from '../config';
 import { SassLanguageMode } from '../modes/style/sass/sassLanguageMode';
+import { getPugMode } from '../modes/pug';
 
 export interface VLSServices {
   infoService?: VueInfoService;
@@ -130,6 +131,7 @@ export class LanguageModes {
       workspacePath,
       services.infoService
     );
+
     const jsMode = await getJavascriptMode(
       this.serviceHost,
       this.documentRegions,
@@ -140,6 +142,7 @@ export class LanguageModes {
 
     this.modes['vue'] = getVueMode(workspacePath, globalSnippetDir);
     this.modes['vue-html'] = vueHtmlMode;
+    this.modes['pug'] = getPugMode();
     this.modes['css'] = getCSSMode(this.documentRegions);
     this.modes['postcss'] = getPostCSSMode(this.documentRegions);
     this.modes['scss'] = getSCSSMode(this.documentRegions);
diff --git a/server/src/embeddedSupport/test/embeddedSupport.test.ts b/server/src/embeddedSupport/test/embeddedSupport.test.ts
index 0acd6a4f96..a62e765c4f 100644
--- a/server/src/embeddedSupport/test/embeddedSupport.test.ts
+++ b/server/src/embeddedSupport/test/embeddedSupport.test.ts
@@ -135,3 +135,73 @@ suite('External Source', () => {
     assert.equal(importedScripts[0], './external.js');
   });
 });
+
+suite('Template region positions', () => {
+  const htmlSrc = `
+<template>
+  <p>Test</p>
+</template>
+`;
+
+  test('vue-html region positions', () => {
+    const { regions } = parseVueDocumentRegions(TextDocument.create('test://test.vue', 'vue', 0, htmlSrc));
+
+    assert.equal(regions[0].languageId, 'vue-html');
+    assert.equal(
+      htmlSrc.slice(regions[0].start, regions[0].end),
+      [
+        // prettier-ignore
+        '',
+        '  <p>Test</p>',
+        ''
+      ].join('\n')
+    );
+  });
+
+  const pugSrc = `
+<template lang="pug">
+p Test
+</template>
+`;
+
+  test('pug region positions', () => {
+    const { regions } = parseVueDocumentRegions(TextDocument.create('test://test.vue', 'vue', 0, pugSrc));
+
+    assert.equal(regions[0].languageId, 'pug');
+    assert.equal(
+      pugSrc.slice(regions[0].start, regions[0].end),
+      [
+        // prettier-ignore
+        '',
+        'p Test',
+        ''
+      ].join('\n')
+    );
+  });
+});
+
+suite('Embedded <template> ', () => {
+  const htmlSrc = `
+<template>
+  <template>
+    <p>Test</p>
+  </template>
+</template>
+`;
+  test('vue-html region positions', () => {
+    const { regions } = parseVueDocumentRegions(TextDocument.create('test://test.vue', 'vue', 0, htmlSrc));
+
+    assert.equal(regions[0].languageId, 'vue-html');
+    assert.equal(
+      htmlSrc.slice(regions[0].start, regions[0].end),
+      [
+        // prettier-ignore
+        '',
+        '  <template>',
+        '    <p>Test</p>',
+        '  </template>',
+        ''
+      ].join('\n')
+    );
+  });
+});
diff --git a/server/src/embeddedSupport/vueDocumentRegionParser.ts b/server/src/embeddedSupport/vueDocumentRegionParser.ts
index b1ea7615a7..27ba08bba6 100644
--- a/server/src/embeddedSupport/vueDocumentRegionParser.ts
+++ b/server/src/embeddedSupport/vueDocumentRegionParser.ts
@@ -92,7 +92,7 @@ export function parseVueDocumentRegions(document: TextDocument) {
 function scanTemplateRegion(scanner: Scanner, text: string): EmbeddedRegion | null {
   let languageId: LanguageId = 'vue-html';
 
-  let token: number;
+  let token = -1;
   let start = 0;
   let end: number;
 
@@ -102,16 +102,26 @@ function scanTemplateRegion(scanner: Scanner, text: string): EmbeddedRegion | nu
   let lastAttributeName = null;
   while (unClosedTemplate !== 0) {
     // skip parsing on non html syntax, just search terminator
-    if (languageId !== 'vue-html' && start !== 0) {
+    if (token === TokenType.AttributeValue && languageId !== 'vue-html') {
+      while (token !== TokenType.StartTagClose) {
+        token = scanner.scan();
+      }
+      start = scanner.getTokenEnd();
+
       token = scanner.scanForRegexp(/<\/template>/);
       if (token === TokenType.EOS) {
         return null;
       }
-      // forward to endTagStart </
-      scanner.scan();
+
+      // scan to `EndTag`, past `</` to `template`
+      while (token !== TokenType.EndTag) {
+        token = scanner.scan();
+      }
       break;
     }
+
     token = scanner.scan();
+
     if (token === TokenType.EOS) {
       return null;
     }
diff --git a/server/src/modes/pug/index.ts b/server/src/modes/pug/index.ts
new file mode 100644
index 0000000000..4f934f346f
--- /dev/null
+++ b/server/src/modes/pug/index.ts
@@ -0,0 +1,52 @@
+import { TextDocument, Position, Range } from 'vscode-languageserver-types';
+import { LanguageMode } from '../../embeddedSupport/languageModes';
+import { prettierify } from '../../utils/prettier';
+import { VLSFormatConfig } from '../../config';
+import { getFileFsPath } from '../../utils/paths';
+
+export function getPugMode(): LanguageMode {
+  let config: any = {};
+
+  return {
+    getId() {
+      return 'pug';
+    },
+    configure(c) {
+      config = c;
+    },
+    format(document, currRange, formattingOptions) {
+      if (config.vetur.format.defaultFormatter['pug'] === 'none') {
+        return [];
+      }
+
+      const { value, range } = getValueAndRange(document, currRange);
+
+      const foo = prettierify(
+        value,
+        getFileFsPath(document.uri),
+        range,
+        config.vetur.format as VLSFormatConfig,
+        'pug',
+        false
+      );
+
+      return foo;
+    },
+    onDocumentRemoved() {},
+    dispose() {}
+  };
+}
+
+function getValueAndRange(document: TextDocument, currRange: Range): { value: string; range: Range } {
+  let value = document.getText();
+  let range = currRange;
+
+  if (currRange) {
+    const startOffset = document.offsetAt(currRange.start);
+    const endOffset = document.offsetAt(currRange.end);
+    value = value.substring(startOffset, endOffset);
+  } else {
+    range = Range.create(Position.create(0, 0), document.positionAt(value.length));
+  }
+  return { value, range };
+}
diff --git a/server/src/utils/prettier/prettier.d.ts b/server/src/utils/prettier/prettier.d.ts
index c831083690..c2ec7a917a 100644
--- a/server/src/utils/prettier/prettier.d.ts
+++ b/server/src/utils/prettier/prettier.d.ts
@@ -17,7 +17,8 @@ export type ParserOption =
   | 'html'
   | 'angular'
   | 'mdx'
-  | 'yaml';
+  | 'yaml'
+  | 'pug';
 
 type TrailingCommaOption = 'none' | 'es5' | 'all';
 
diff --git a/server/yarn.lock b/server/yarn.lock
index e1cad3d798..d43a1486f2 100644
--- a/server/yarn.lock
+++ b/server/yarn.lock
@@ -107,6 +107,13 @@
   resolved "https://registry.yarnpkg.com/@nodelib/fs.stat/-/fs.stat-1.1.3.tgz#2b5a3ab3f918cca48a8c754c08168e3f03eba61b"
   integrity sha512-shAmDyaQC4H92APFoIaVDHCx5bStIocgvbwQyxPRrbUY20V1EYTbSDchWbuwlMG3V17cprZhA6+78JfB+3DTPw==
 
+"@prettier/plugin-pug@^1.4.4":
+  version "1.4.4"
+  resolved "https://registry.yarnpkg.com/@prettier/plugin-pug/-/plugin-pug-1.4.4.tgz#252c8dfac574c82d1e95492b9bd4cb59c44d3ee6"
+  integrity sha512-Lb3cc0a4IwUy9oNeYuN1YHg/+J5JDsJNSKFMGpcp6cq6vnMcNyWn+KNBkTo/ZYEIT2JAsl6X+KKAvjH1p+XGeQ==
+  dependencies:
+    pug-lexer "~5.0.0"
+
 "@sindresorhus/is@^0.14.0":
   version "0.14.0"
   resolved "https://registry.yarnpkg.com/@sindresorhus/is/-/is-0.14.0.tgz#9fb3a3cf3132328151f353de4632e01e52102bea"
@@ -834,6 +841,13 @@ character-entities@^1.0.0:
   resolved "https://registry.yarnpkg.com/character-entities/-/character-entities-1.2.2.tgz#58c8f371c0774ef0ba9b2aca5f00d8f100e6e363"
   integrity sha512-sMoHX6/nBiy3KKfC78dnEalnpn0Az0oSNvqUWYTtYrhRI5iUIYsROU48G+E+kMFQzqXaJ8kHJZ85n7y6/PHgwQ==
 
+character-parser@^2.2.0:
+  version "2.2.0"
+  resolved "https://registry.yarnpkg.com/character-parser/-/character-parser-2.2.0.tgz#c7ce28f36d4bcd9744e5ffc2c5fcde1c73261fc0"
+  integrity sha1-x84o821LzZdE5f/CxfzeHHMmH8A=
+  dependencies:
+    is-regex "^1.0.3"
+
 character-reference-invalid@^1.0.0:
   version "1.1.2"
   resolved "https://registry.yarnpkg.com/character-reference-invalid/-/character-reference-invalid-1.1.2.tgz#21e421ad3d84055952dab4a43a04e73cd425d3ed"
@@ -2366,6 +2380,14 @@ is-empty@^1.0.0:
   resolved "https://registry.yarnpkg.com/is-empty/-/is-empty-1.2.0.tgz#de9bb5b278738a05a0b09a57e1fb4d4a341a9f6b"
   integrity sha1-3pu1snhzigWgsJpX4ftNSjQan2s=
 
+is-expression@^4.0.0:
+  version "4.0.0"
+  resolved "https://registry.yarnpkg.com/is-expression/-/is-expression-4.0.0.tgz#c33155962abf21d0afd2552514d67d2ec16fd2ab"
+  integrity sha512-zMIXX63sxzG3XrkHkrAPvm/OVZVSCPNkwMHU8oTX7/U3AL78I0QXCEICXUM13BIa8TYGZ68PiTKfQz3yaTNr4A==
+  dependencies:
+    acorn "^7.1.1"
+    object-assign "^4.1.1"
+
 is-extendable@^0.1.0, is-extendable@^0.1.1:
   version "0.1.1"
   resolved "https://registry.yarnpkg.com/is-extendable/-/is-extendable-0.1.1.tgz#62b110e289a471418e3ec36a617d472e301dfc89"
@@ -2486,6 +2508,13 @@ is-promise@^2.1.0:
   resolved "https://registry.yarnpkg.com/is-promise/-/is-promise-2.1.0.tgz#79a2a9ece7f096e80f36d2b2f3bc16c1ff4bf3fa"
   integrity sha1-eaKp7OfwlugPNtKy87wWwf9L8/o=
 
+is-regex@^1.0.3:
+  version "1.1.0"
+  resolved "https://registry.yarnpkg.com/is-regex/-/is-regex-1.1.0.tgz#ece38e389e490df0dc21caea2bd596f987f767ff"
+  integrity sha512-iI97M8KTWID2la5uYXlkbSDQIg4F6o1sYboZKKTDpnDQMLtUL86zxhgDet3Q2SriaYsyGqZ6Mn2SjbRKeLHdqw==
+  dependencies:
+    has-symbols "^1.0.1"
+
 is-regex@^1.0.4:
   version "1.0.4"
   resolved "https://registry.yarnpkg.com/is-regex/-/is-regex-1.0.4.tgz#5517489b547091b0930e095654ced25ee97e9491"
@@ -3178,7 +3207,7 @@ nyc@^14.1.1:
     yargs "^13.2.2"
     yargs-parser "^13.0.0"
 
-object-assign@^4.0.1:
+object-assign@^4.0.1, object-assign@^4.1.1:
   version "4.1.1"
   resolved "https://registry.yarnpkg.com/object-assign/-/object-assign-4.1.1.tgz#2109adc7965887cfc05cbbd442cac8bfbb360863"
   integrity sha1-IQmtx5ZYh8/AXLvUQsrIv7s2CGM=
@@ -3623,6 +3652,20 @@ pseudomap@^1.0.2:
   resolved "https://registry.yarnpkg.com/pseudomap/-/pseudomap-1.0.2.tgz#f052a28da70e618917ef0a8ac34c1ae5a68286b3"
   integrity sha1-8FKijacOYYkX7wqKw0wa5aaChrM=
 
+pug-error@^2.0.0:
+  version "2.0.0"
+  resolved "https://registry.yarnpkg.com/pug-error/-/pug-error-2.0.0.tgz#5c62173cb09c34de2a2ce04f17b8adfec74d8ca5"
+  integrity sha512-sjiUsi9M4RAGHktC1drQfCr5C5eriu24Lfbt4s+7SykztEOwVZtbFk1RRq0tzLxcMxMYTBR+zMQaG07J/btayQ==
+
+pug-lexer@~5.0.0:
+  version "5.0.0"
+  resolved "https://registry.yarnpkg.com/pug-lexer/-/pug-lexer-5.0.0.tgz#0b779e7d8cbf0f103803675be96351942fd9a727"
+  integrity sha512-52xMk8nNpuyQ/M2wjZBN5gXQLIylaGkAoTk5Y1pBhVqaopaoj8Z0iVzpbFZAqitL4RHNVDZRnJDsqEYe99Ti0A==
+  dependencies:
+    character-parser "^2.2.0"
+    is-expression "^4.0.0"
+    pug-error "^2.0.0"
+
 pump@^3.0.0:
   version "3.0.0"
   resolved "https://registry.yarnpkg.com/pump/-/pump-3.0.0.tgz#b4a2116815bde2f4e1ea602354e8c75565107a64"