diff --git a/.gitignore b/.gitignore
index 71daf201c..84d84d0b0 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,5 +1,6 @@
 *.sublime-project
 *.sublime-workspace
+*.code-workspace
 node_modules
 example/dist/
 .ntvs_analysis.dat
diff --git a/CHANGELOG.md b/CHANGELOG.md
index 004d25530..25e0cf0b2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,11 @@
 ### Fixed
 - Your improvement here...
 
+## [1.7.2] - 2019-01-09
+
+### Fixed
+- Added `processSource` option to run handlebars template through html minifier for production optimizations (#175)
+
 ## [1.7.1] - 2018-12-18
 
 ### Fixed
diff --git a/README.md b/README.md
index 381a16946..2c71e6ffc 100644
--- a/README.md
+++ b/README.md
@@ -64,6 +64,7 @@ The following query (or config) options are supported:
  - *ignorePartials*: Prevents partial references from being fetched and bundled. Useful for manually loading partials at runtime.
  - *ignoreHelpers*: Prevents helper references from being fetched and bundled. Useful for manually loading helpers at runtime.
  - *precompileOptions*: Options passed to handlebars precompile. See the Handlebars.js [documentation](http://handlebarsjs.com/reference.html#base-precompile) for more information.
+ - *processSource*: Runs the handlebars templates through an html minifier to remove whitespace and reduce the size of the compiled templates.
  - *config*: Tells the loader where to look in the webpack config for configurations for this loader. Defaults to `handlebarsLoader`.
  - *config.partialResolver* You can specify a function to use for resolving partials. To do so, add to your webpack config:
     ```js
diff --git a/index.js b/index.js
index b02466800..407da8087 100644
--- a/index.js
+++ b/index.js
@@ -6,6 +6,7 @@ var path = require("path");
 var assign = require("object-assign");
 var fastreplace = require('./lib/fastreplace');
 var findNestedRequires = require('./lib/findNestedRequires');
+var minify = require('html-minifier').minify;
 
 function versionCheck(hbCompiler, hbRuntime) {
   return hbCompiler.COMPILER_REVISION === (hbRuntime["default"] || hbRuntime).COMPILER_REVISION;
@@ -26,7 +27,23 @@ function getLoaderConfig(loaderContext) {
   return assign({}, config, query);
 }
 
-module.exports = function(source) {
+/**
+ * Returns the template source with newlines and multiple spaces removed
+ * based on the processSource config option.
+ *
+ * @param {String} source
+ * @returns {String}
+ */
+var processSource = function (source) {
+  return minify(source, {
+    collapseWhitespace: true,
+    conservativeCollapse: true,
+    removeComments: true,
+    removeAttributeQuotes: true
+  });
+}
+
+module.exports = function (source) {
   if (this.cacheable) this.cacheable();
   var loaderApi = this;
   var query = getLoaderConfig(loaderApi);
@@ -42,8 +59,7 @@ module.exports = function(source) {
   var extensions = query.extensions;
   if (!extensions) {
     extensions = [".handlebars", ".hbs", ""];
-  }
-  else if (!Array.isArray(extensions)) {
+  } else if (!Array.isArray(extensions)) {
     extensions = extensions.split(/[ ,;]/g);
   }
 
@@ -57,7 +73,7 @@ module.exports = function(source) {
   var foundUnclearStuff = {};
   var knownHelpers = {};
 
-  [].concat(query.knownHelpers, precompileOptions.knownHelpers).forEach(function(k) {
+  [].concat(query.knownHelpers, precompileOptions.knownHelpers).forEach(function (k) {
     if (k && typeof k === 'string') {
       knownHelpers[k] = true;
     }
@@ -77,12 +93,13 @@ module.exports = function(source) {
 
   var hb = handlebars.create();
   var JavaScriptCompiler = hb.JavaScriptCompiler;
+
   function MyJavaScriptCompiler() {
     JavaScriptCompiler.apply(this, arguments);
   }
   MyJavaScriptCompiler.prototype = Object.create(JavaScriptCompiler.prototype);
   MyJavaScriptCompiler.prototype.compiler = MyJavaScriptCompiler;
-  MyJavaScriptCompiler.prototype.nameLookup = function(parent, name, type) {
+  MyJavaScriptCompiler.prototype.nameLookup = function (parent, name, type) {
     if (debug) {
       console.log("nameLookup %s %s %s", parent, name, type);
     }
@@ -96,26 +113,23 @@ module.exports = function(source) {
       }
       foundPartials["$" + name] = null;
       return JavaScriptCompiler.prototype.nameLookup.apply(this, arguments);
-    }
-    else if (type === "helper") {
+    } else if (type === "helper") {
       if (foundHelpers["$" + name]) {
         return "__default(require(" + loaderUtils.stringifyRequest(loaderApi, foundHelpers["$" + name]) + "))";
       }
       foundHelpers["$" + name] = null;
       return JavaScriptCompiler.prototype.nameLookup.apply(this, arguments);
-    }
-    else if (type === "context") {
+    } else if (type === "context") {
       // This could be a helper too, save it to check it later
       if (!foundUnclearStuff["$" + name]) foundUnclearStuff["$" + name] = false;
       return JavaScriptCompiler.prototype.nameLookup.apply(this, arguments);
-    }
-    else {
+    } else {
       return JavaScriptCompiler.prototype.nameLookup.apply(this, arguments);
     }
   };
 
   if (inlineRequires) {
-    MyJavaScriptCompiler.prototype.pushString = function(value) {
+    MyJavaScriptCompiler.prototype.pushString = function (value) {
       if (inlineRequires.test(value)) {
         this.pushLiteral("require(" + loaderUtils.stringifyRequest(loaderApi, value) + ")");
       } else {
@@ -138,17 +152,18 @@ module.exports = function(source) {
 
   // Define custom visitor for further template AST parsing
   var Visitor = handlebars.Visitor;
+
   function InternalBlocksVisitor() {
     this.partialBlocks = [];
     this.inlineBlocks = [];
   }
 
   InternalBlocksVisitor.prototype = new Visitor();
-  InternalBlocksVisitor.prototype.PartialBlockStatement = function(partial) {
+  InternalBlocksVisitor.prototype.PartialBlockStatement = function (partial) {
     this.partialBlocks.push(partial.name.original);
     Visitor.prototype.PartialBlockStatement.call(this, partial);
   };
-  InternalBlocksVisitor.prototype.DecoratorBlock = function(partial) {
+  InternalBlocksVisitor.prototype.DecoratorBlock = function (partial) {
     if (partial.path.original === 'inline') {
       this.inlineBlocks.push(partial.params[0].value);
     }
@@ -202,6 +217,9 @@ module.exports = function(source) {
 
     try {
       if (source) {
+        if (!!query.processSource) {
+          source = processSource(source);
+        }
         ast = hb.parse(source, opts);
         template = hb.precompile(ast, opts);
       }
@@ -209,7 +227,7 @@ module.exports = function(source) {
       return loaderAsyncCallback(err);
     }
 
-    var resolve = function(request, type, callback) {
+    var resolve = function (request, type, callback) {
       var contexts = [loaderApi.context];
 
       // Any additional helper dirs will be added to the searchable contexts
@@ -222,7 +240,7 @@ module.exports = function(source) {
         contexts = contexts.concat(query.partialDirs);
       }
 
-      var resolveWithContexts = function() {
+      var resolveWithContexts = function () {
         var context = contexts.shift();
 
         var traceMsg;
@@ -232,28 +250,25 @@ module.exports = function(source) {
           console.log("request=%s", request);
         }
 
-        var next = function(err) {
+        var next = function (err) {
           if (contexts.length > 0) {
             resolveWithContexts();
-          }
-          else {
+          } else {
             if (debug) console.log("Failed to resolve %s %s", type, traceMsg);
             return callback(err);
           }
         };
 
-        loaderApi.resolve(context, request, function(err, result) {
+        loaderApi.resolve(context, request, function (err, result) {
           if (!err && result) {
             if (exclude && exclude.test(result)) {
               if (debug) console.log("Excluding %s %s", type, traceMsg);
               return next();
-            }
-            else {
+            } else {
               if (debug) console.log("Resolved %s %s", type, traceMsg);
               return callback(err, result);
             }
-          }
-          else {
+          } else {
             return next(err);
           }
         });
@@ -262,14 +277,14 @@ module.exports = function(source) {
       resolveWithContexts();
     };
 
-    var resolveUnclearStuffIterator = function(stuff, unclearStuffCallback) {
+    var resolveUnclearStuffIterator = function (stuff, unclearStuffCallback) {
       if (foundUnclearStuff[stuff]) return unclearStuffCallback();
       var request = referenceToRequest(stuff.substr(1), 'unclearStuff');
 
       if (query.ignoreHelpers) {
         unclearStuffCallback();
       } else {
-        resolve(request, 'unclearStuff', function(err, result) {
+        resolve(request, 'unclearStuff', function (err, result) {
           if (!err && result) {
             knownHelpers[stuff.substr(1)] = true;
             foundHelpers[stuff] = result;
@@ -281,7 +296,7 @@ module.exports = function(source) {
       }
     };
 
-    var defaultPartialResolver = function defaultPartialResolver(request, callback){
+    var defaultPartialResolver = function defaultPartialResolver(request, callback) {
       request = referenceToRequest(request, 'partial');
       // Try every extension for partials
       var i = 0;
@@ -292,7 +307,7 @@ module.exports = function(source) {
         }
         var extension = extensions[i++];
 
-        resolve(request + extension, 'partial', function(err, result) {
+        resolve(request + extension, 'partial', function (err, result) {
           if (!err && result) {
             return callback(null, result);
           }
@@ -301,18 +316,18 @@ module.exports = function(source) {
       }());
     };
 
-    var resolvePartialsIterator = function(partial, partialCallback) {
+    var resolvePartialsIterator = function (partial, partialCallback) {
       if (foundPartials[partial]) return partialCallback();
       // Strip the # off of the partial name
       var request = partial.substr(1);
 
       var partialResolver = query.partialResolver || defaultPartialResolver;
 
-      if(query.ignorePartials) {
+      if (query.ignorePartials) {
         return partialCallback();
       } else {
-        partialResolver(request, function(err, resolved){
-          if(err) {
+        partialResolver(request, function (err, resolved) {
+          if (err) {
             var visitor = new InternalBlocksVisitor();
 
             visitor.accept(ast);
@@ -334,20 +349,20 @@ module.exports = function(source) {
       }
     };
 
-    var resolveHelpersIterator = function(helper, helperCallback) {
+    var resolveHelpersIterator = function (helper, helperCallback) {
       if (foundHelpers[helper]) return helperCallback();
       var request = referenceToRequest(helper.substr(1), 'helper');
 
       if (query.ignoreHelpers) {
         helperCallback();
       } else {
-        var defaultHelperResolver = function(request, callback){
+        var defaultHelperResolver = function (request, callback) {
           return resolve(request, 'helper', callback);
         };
 
         var helperResolver = query.helperResolver || defaultHelperResolver;
 
-        helperResolver(request, function(err, result) {
+        helperResolver(request, function (err, result) {
           if (!err && result) {
             knownHelpers[helper.substr(1)] = true;
             foundHelpers[helper] = result;
@@ -363,7 +378,7 @@ module.exports = function(source) {
       }
     };
 
-    var doneResolving = function(err) {
+    var doneResolving = function (err) {
       if (err) return loaderAsyncCallback(err);
 
       // Do another compiler pass if not everything was resolved
@@ -374,15 +389,15 @@ module.exports = function(source) {
 
       // export as module if template is not blank
       var slug = template ?
-        'var Handlebars = require(' + loaderUtils.stringifyRequest(loaderApi, runtimePath) + ');\n'
-        + 'function __default(obj) { return obj && (obj.__esModule ? obj["default"] : obj); }\n'
-        + 'module.exports = (Handlebars["default"] || Handlebars).template(' + template + ');' :
+        'var Handlebars = require(' + loaderUtils.stringifyRequest(loaderApi, runtimePath) + ');\n' +
+        'function __default(obj) { return obj && (obj.__esModule ? obj["default"] : obj); }\n' +
+        'module.exports = (Handlebars["default"] || Handlebars).template(' + template + ');' :
         'module.exports = function(){return "";};';
 
       loaderAsyncCallback(null, slug);
     };
 
-    var resolveItems = function(err, type, items, iterator, callback) {
+    var resolveItems = function (err, type, items, iterator, callback) {
       if (err) return callback(err);
 
       var itemKeys = Object.keys(items);
@@ -395,18 +410,18 @@ module.exports = function(source) {
       async.each(itemKeys, iterator, callback);
     };
 
-    var resolvePartials = function(err) {
+    var resolvePartials = function (err) {
       resolveItems(err, 'partials', foundPartials, resolvePartialsIterator, doneResolving);
     };
 
-    var resolveUnclearStuff = function(err) {
+    var resolveUnclearStuff = function (err) {
       resolveItems(err, 'unclearStuff', foundUnclearStuff, resolveUnclearStuffIterator, resolvePartials);
     };
 
-    var resolveHelpers = function(err) {
+    var resolveHelpers = function (err) {
       resolveItems(err, 'helpers', foundHelpers, resolveHelpersIterator, resolveUnclearStuff);
     };
 
     resolveHelpers();
   }());
-};
+};
\ No newline at end of file
diff --git a/package.json b/package.json
index 8f87c0f8f..4865b0f6c 100644
--- a/package.json
+++ b/package.json
@@ -3,7 +3,8 @@
   "contributors": [
     "Alan @altano",
     "Tobias Koppers @sokra",
-    "Jason Anderson @diurnalist"
+    "Jason Anderson @diurnalist",
+    "Patrick Szczypinski @pizatski"
   ],
   "maintainers": [
     "Paul Carduner @pcardune"
@@ -12,6 +13,7 @@
   "dependencies": {
     "async": "~0.2.10",
     "fastparse": "^1.0.0",
+    "html-minifier": "^3.5.21",
     "loader-utils": "1.0.x",
     "object-assign": "^4.1.0"
   },
@@ -28,7 +30,7 @@
     "type": "git",
     "url": "git://github.com/pcardune/handlebars-loader.git"
   },
-  "version": "1.7.1",
+  "version": "1.7.2",
   "devDependencies": {
     "coveralls": "^2.11.8",
     "eslint": "^2.8.0",
diff --git a/test/test.js b/test/test.js
index 683d5906b..dc105812f 100644
--- a/test/test.js
+++ b/test/test.js
@@ -556,4 +556,20 @@ describe('handlebars-loader', function () {
     });
   });
 
-});
+/*
+ * This uses an html-minifier with 'conservative whitespace stripping' on. This means you'll still get a single space around each
+ * var in the handlebars template which can result in two spaces between tags.
+ */
+  it('should output with fewer than three spaces and no newlines when processSource option is set', function (done) {
+    testTemplate(loader, './simple.handlebars', {
+      query: '?processSource=true',
+      data: TEST_TEMPLATE_DATA
+    }, function (err, output, require) {
+      assert.ok(output, 'generated output');
+      assert.ok(output.indexOf('\n') === -1);
+      assert.ok(output.indexOf('   ') === -1);
+      done();
+    });
+  });
+
+});
\ No newline at end of file