diff --git a/README.md b/README.md
index a2a97d5e..c10495ae 100644
--- a/README.md
+++ b/README.md
@@ -81,9 +81,9 @@ marked.setOptions({
   pedantic: false,
   sanitize: true,
   // callback for code highlighter
-  highlight: function(code, language) {
-    if (language === 'js') {
-      code = highlight(code);
+  highlight: function(code, lang) {
+    if (lang === 'js') {
+      return javascriptHighlighter(code);
     }
     return code;
   }
diff --git a/lib/marked.js b/lib/marked.js
index 02d725ed..d39aad37 100644
--- a/lib/marked.js
+++ b/lib/marked.js
@@ -531,10 +531,15 @@ var tok = function() {
         + '>\n';
     }
     case 'code': {
+      if (options.highlight) {
+        token.code = options.highlight(token.text, token.lang);
+        if (token.code != null && token.code !== token.text) {
+          token.escaped = true;
+          token.text = token.code;
+        }
+      }
       if (!token.escaped) {
-        token.text = options.highlight
-          ? options.highlight(token.text, token.lang)
-          : escape(token.text, true);
+        token.text = escape(token.text, true);
       }
       return '<pre><code'
         + (token.lang