Org-mode: Source block doesn't respect parent buffer indentation

Question

When I edit a source block it comes out in the org-mode buffer like this:

- Item 1
  Text indented two spaces here under list entry

  #+BEGIN_SRC ruby
class Name
end
  #+END_SRC

But it should be indented like this:

- Item 1
  Text indented two spaces here under list entry

  #+BEGIN_SRC ruby
  class Name
  end
  #+END_SRC

How do I need to configure org-mode to solve this issue?

Answer 1

This solved my problem.

(setq org-src-preserve-indentation nil 
      org-edit-src-content-indentation 0)

Answer 2

You can use C-c' to edit the block using the ruby-mode (or any other mode you specified for babel). Now you can indent the whole buffer according to the ruby-mode. Leave using C-c' again and your block should be indented now.

You could also create a function or a macro to run those steps for you, to automatize the process, if you wish.