diff --git a/dotnet/src/SemanticKernel.Abstractions/AI/XmlPromptParser.cs b/dotnet/src/SemanticKernel.Abstractions/AI/XmlPromptParser.cs
index 3dacedb81f4d..0c7dfdd30fe6 100644
--- a/dotnet/src/SemanticKernel.Abstractions/AI/XmlPromptParser.cs
+++ b/dotnet/src/SemanticKernel.Abstractions/AI/XmlPromptParser.cs
@@ -3,6 +3,7 @@
 using System;
 using System.Collections.Generic;
 using System.Diagnostics.CodeAnalysis;
+using System.Linq;
 using System.Web;
 using System.Xml;
 
@@ -38,9 +39,14 @@ public static bool TryParse(string prompt, [NotNullWhen(true)] out List<PromptNo
             return false;
         }
 
-        var xmlDocument = new XmlDocument();
+        var xmlDocument = new XmlDocument()
+        {
+            PreserveWhitespace = true
+        };
+
         try
         {
+
             xmlDocument.LoadXml($"<root>{prompt}</root>");
         }
         catch (XmlException)
@@ -70,8 +76,17 @@ public static bool TryParse(string prompt, [NotNullWhen(true)] out List<PromptNo
             return null;
         }
 
-        var isCData = node.FirstChild?.Name.Equals("#cdata-section", StringComparison.OrdinalIgnoreCase) ?? false;
-        var nodeContent = isCData ? node.InnerText.Trim() : node.InnerXml.Trim();
+        // Since we're preserving whitespace for the contents within each XMLNode, we
+        //  need to skip any whitespace nodes at the front of the children.
+        var firstNonWhitespaceChild = node.ChildNodes
+                    .Cast<XmlNode>()
+                    .Where(n => n.NodeType != XmlNodeType.Whitespace)
+                    .FirstOrDefault();
+
+        var isCData = firstNonWhitespaceChild?.NodeType == XmlNodeType.CDATA;
+        var nodeContent = isCData
+            ? node.InnerText.Trim()
+            : node.InnerXml.Trim();
 
         var promptNode = new PromptNode(node.Name)
         {
diff --git a/dotnet/src/SemanticKernel.UnitTests/Prompt/ChatPromptParserTests.cs b/dotnet/src/SemanticKernel.UnitTests/Prompt/ChatPromptParserTests.cs
index 01a4458ce2b3..ecb051b7d7b1 100644
--- a/dotnet/src/SemanticKernel.UnitTests/Prompt/ChatPromptParserTests.cs
+++ b/dotnet/src/SemanticKernel.UnitTests/Prompt/ChatPromptParserTests.cs
@@ -114,6 +114,55 @@ public void ItReturnsChatHistoryWithValidContentItemsIncludeCData()
                               """, c.Content));
     }
 
+    [Fact]
+    public void ItReturnsChatHistoryWithValidContentItemsIncludeCode()
+    {
+        // Arrange
+        string prompt = GetValidPromptWithCodeBlock();
+
+        // Act
+        bool result = ChatPromptParser.TryParse(prompt, out var chatHistory);
+
+        // Assert
+        Assert.True(result);
+        Assert.NotNull(chatHistory);
+
+        Assert.Collection(chatHistory,
+            // The first message entry inside prompt is neither wrapped in CDATA or HtmlEncoded, so the single quotes are not preserved.
+            c => Assert.Equal("""
+                              <code>
+                                  <message role="system">
+                                      <text>Text content</text>
+                                  </message>
+                              </code>
+                              """, c.Content),
+            // Since the second message entry inside prompt is wrapped in CDATA, the single quotes are preserved.
+            c => Assert.Equal("""
+                              <code>
+                                  <message role='system'>
+                                      <text>Text content</text>
+                                  </message>
+                              </code>
+                              """, c.Content),
+             // Since the third message entry inside prompt is HtmlEncoded, the single quotes are preserved.
+             c => Assert.Equal("""
+                              <code>
+                                  <message role='system'>
+                                      <text>Text content</text>
+                                  </message>
+                              </code>
+                              """, c.Content),
+            // In this case, when we trim node.InnerXml only the opening <code> tag is indented. 
+            c => Assert.Equal("""
+                              <code>
+                                  <text>explain image</text>
+                                  <image>
+                                    https://fake-link-to-image/
+                                  </image>
+                                </code>
+                              """, c.Content));
+    }
+
     private static string GetSimpleValidPrompt()
     {
         return
@@ -181,4 +230,47 @@ private static string GetValidPromptWithCDataSection()
 
             """;
     }
+
+    private static string GetValidPromptWithCodeBlock()
+    {
+        return
+            """
+
+            <message role="assistant">
+            <code>
+                <message role='system'>
+                    <text>Text content</text>
+                </message>
+            </code>
+            </message>
+
+            <message role="assistant">
+            <![CDATA[
+            <code>
+                <message role='system'>
+                    <text>Text content</text>
+                </message>
+            </code>
+            ]]>
+            </message>
+
+            <message role="assistant">
+            &lt;code&gt;
+                &lt;message role=&#39;system&#39;&gt;
+                    &lt;text&gt;Text content&lt;/text&gt;
+                &lt;/message&gt;
+            &lt;/code&gt;
+            </message>
+
+            <message role='user'>
+              <code>
+                <text>explain image</text>
+                <image>
+                  https://fake-link-to-image/
+                </image>
+              </code>
+            </message>
+
+            """;
+    }
 }