diff --git a/CHANGELOG.md b/CHANGELOG.md
index 69549030..b8329e42 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -28,6 +28,7 @@
 * Added Otter Assign support for the `all_or_nothing` config per [#751](https://github.com/ucbds-infra/otter-grader/issues/751)
 * Updated Otter Assign to only allow a function definition and statement to call the test function in exception-based test cells and automatically ignore the latter statement instead of requiring an explicit `# IGNORE` comment per [#516](https://github.com/ucbds-infra/otter-grader/issues/516)
 * Added additional package versions to the output of `otter --version` per [#843](https://github.com/ucbds-infra/otter-grader/issues/843)
+* Fixed bug in converting test cells containing indented functions to doctests in Otter Assign per [#840](https://github.com/ucbds-infra/otter-grader/issues/840)
 
 **v5.7.1:**
 
diff --git a/otter/assign/utils.py b/otter/assign/utils.py
index a6617ce2..c88e925d 100644
--- a/otter/assign/utils.py
+++ b/otter/assign/utils.py
@@ -195,6 +195,9 @@ def str_to_doctest(code_lines: list[str], lines: list[str]) -> list[str]:
     if len(code_lines) == 0:
         return lines
     line = code_lines.pop(0)
+    # skip empty lines
+    while not line:
+        line = code_lines.pop(0)
     if line.startswith(" ") or line.startswith("\t"):
         return str_to_doctest(code_lines, lines + ["... " + line])
     elif (