diff --git a/CHANGELOG b/CHANGELOG
index 2195884e7..126586f9b 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -11,6 +11,7 @@
   parameter list is formatted, keeping state along the way. This helps when
   supporting Python 3 type annotations.
 - Catch and report `UnicodeDecodeError` exceptions.
+- `CONTINUATION_ALIGN_STYLE = FIXED` now work with space indentation.
 ### Fixed
 - Format subscript lists so that splits are essentially free after a comma.
 - Don't add a space between a string and its subscript.
diff --git a/README.rst b/README.rst
index 6ab3132f5..e59985bee 100644
--- a/README.rst
+++ b/README.rst
@@ -424,14 +424,13 @@ Knobs
     - ``SPACE``: Use spaces for continuation alignment. This is default
       behavior.
     - ``FIXED``: Use fixed number (CONTINUATION_INDENT_WIDTH) of columns
-      (ie: CONTINUATION_INDENT_WIDTH/INDENT_WIDTH tabs) for continuation
-      alignment.
+      (ie: CONTINUATION_INDENT_WIDTH/INDENT_WIDTH tabs or CONTINUATION_INDENT_WIDTH
+      spaces) for continuation alignment.
     - ``VALIGN-RIGHT``: Vertically align continuation lines with indent
       characters. Slightly right (one more indent character) if cannot
       vertically align continuation lines with indent characters.
 
-      For options ``FIXED``, and ``VALIGN-RIGHT`` are only available when
-      ``USE_TABS`` is enabled.
+      The ``VALIGN-RIGHT`` option only available when ``USE_TABS`` is enabled.
 
 ``CONTINUATION_INDENT_WIDTH``
     Indent width used for line continuations.
diff --git a/yapf/yapflib/format_token.py b/yapf/yapflib/format_token.py
index 79b2b5c92..7c8d1cc80 100644
--- a/yapf/yapflib/format_token.py
+++ b/yapf/yapflib/format_token.py
@@ -84,6 +84,25 @@ def _TabbedContinuationAlignPadding(spaces, align_style, tab_width,
   return ' ' * spaces
 
 
+def _SpacedContinuationAlignPadding(spaces, align_style,
+                                    continuation_indent_width):
+  """Build padding string for continuation alignment in space indentation.
+
+  Arguments:
+    spaces: (int) The number of spaces to place before the token for alignment.
+    align_style: (str) The alignment style for continuation lines.
+    continuation_indent_width: (int) Indent columns for line continuations.
+
+  Returns:
+    A padding string for alignment with style specified by align_style option.
+  """
+  if align_style == 'FIXED':
+    if spaces > 0:
+      return ' ' * continuation_indent_width
+    return ''
+  return ' ' * spaces
+
+
 class FormatToken(object):
   """A wrapper around pytree Leaf nodes.
 
@@ -175,8 +194,14 @@ def AddWhitespacePrefix(self, newlines_before, spaces=0, indent_level=0):
       else:
         indent_before = '\t' * indent_level + ' ' * spaces
     else:
-      indent_before = (' ' * indent_level * style.Get('INDENT_WIDTH') +
-                       ' ' * spaces)
+      if newlines_before > 0:
+        indent_before = (' ' * indent_level * style.Get('INDENT_WIDTH') +
+                         _SpacedContinuationAlignPadding(
+                             spaces, style.Get('CONTINUATION_ALIGN_STYLE'),
+                             style.Get('CONTINUATION_INDENT_WIDTH')))
+      else:
+        indent_before = (' ' * indent_level * style.Get('INDENT_WIDTH') +
+                         ' ' * spaces)
 
     if self.is_comment:
       comment_lines = [s.lstrip() for s in self.value.splitlines()]
diff --git a/yapf/yapflib/style.py b/yapf/yapflib/style.py
index e614e6252..4161acbcc 100644
--- a/yapf/yapflib/style.py
+++ b/yapf/yapflib/style.py
@@ -123,14 +123,13 @@ def method():
 
       - SPACE: Use spaces for continuation alignment. This is default behavior.
       - FIXED: Use fixed number (CONTINUATION_INDENT_WIDTH) of columns
-        (ie: CONTINUATION_INDENT_WIDTH/INDENT_WIDTH tabs) for continuation
-        alignment.
+        (ie: CONTINUATION_INDENT_WIDTH/INDENT_WIDTH tabs or
+        CONTINUATION_INDENT_WIDTH spaces) for continuation alignment.
       - VALIGN-RIGHT: Vertically align continuation lines with indent
         characters. Slightly right (one more indent character) if cannot
         vertically align continuation lines with indent characters.
 
-      For options FIXED, and VALIGN-RIGHT are only available when USE_TABS is
-      enabled."""),
+      Option VALIGN-RIGHT only available when USE_TABS is enabled."""),
     CONTINUATION_INDENT_WIDTH=textwrap.dedent("""\
       Indent width used for line continuations."""),
     DEDENT_CLOSING_BRACKETS=textwrap.dedent("""\
diff --git a/yapftests/format_token_test.py b/yapftests/format_token_test.py
index 2f6f973ba..638c1ff76 100644
--- a/yapftests/format_token_test.py
+++ b/yapftests/format_token_test.py
@@ -63,6 +63,33 @@ def testVAlignRight(self):
     self.assertEqual(pad, '\t' * 2)
 
 
+class SpacedContinuationAlignPaddingTest(unittest.TestCase):
+
+  def testSpace(self):
+    align_style = 'SPACE'
+
+    pad = format_token._SpacedContinuationAlignPadding(0, align_style, 4)
+    self.assertEqual(pad, '')
+
+    pad = format_token._SpacedContinuationAlignPadding(2, align_style, 4)
+    self.assertEqual(pad, ' ' * 2)
+
+    pad = format_token._SpacedContinuationAlignPadding(5, align_style, 4)
+    self.assertEqual(pad, ' ' * 5)
+
+  def testFixed(self):
+    align_style = 'FIXED'
+
+    pad = format_token._SpacedContinuationAlignPadding(0, align_style, 8)
+    self.assertEqual(pad, '')
+
+    pad = format_token._SpacedContinuationAlignPadding(2, align_style, 8)
+    self.assertEqual(pad, ' ' * 8)
+
+    pad = format_token._SpacedContinuationAlignPadding(5, align_style, 8)
+    self.assertEqual(pad, ' ' * 8)
+
+
 class FormatTokenTest(unittest.TestCase):
 
   def testSimple(self):
diff --git a/yapftests/yapf_test.py b/yapftests/yapf_test.py
index e13955fde..2b0993714 100644
--- a/yapftests/yapf_test.py
+++ b/yapftests/yapf_test.py
@@ -1302,6 +1302,33 @@ def foo_function(arg1, arg2,
 INDENT_WIDTH=4
 CONTINUATION_INDENT_WIDTH=8
 CONTINUATION_ALIGN_STYLE = valign-right
+"""
+    with utils.TempFileContents(self.test_tmpdir, style_contents) as stylepath:
+      self.assertYapfReformats(
+          unformatted_code,
+          expected_formatted_code,
+          extra_options=['--style={0}'.format(stylepath)])
+
+  def testUseSpacesContinuationAlignStyleFixed(self):
+    unformatted_code = """\
+def foo_function(arg1, arg2, arg3):
+  return ['hello', 'world',]
+"""
+    expected_formatted_code = """\
+def foo_function(arg1, arg2,
+        arg3):
+    return [
+            'hello',
+            'world',
+    ]
+"""
+    style_contents = u"""\
+[style]
+based_on_style = chromium
+COLUMN_LIMIT=32
+INDENT_WIDTH=4
+CONTINUATION_INDENT_WIDTH=8
+CONTINUATION_ALIGN_STYLE = fixed
 """
     with utils.TempFileContents(self.test_tmpdir, style_contents) as stylepath:
       self.assertYapfReformats(