diff --git a/README.md b/README.md
index 332f767..335719c 100644
--- a/README.md
+++ b/README.md
@@ -10,6 +10,7 @@ by github or other sites via a command line flag.
 - [Installation](#installation)
 - [Usage](#usage)
   - [Adding toc to all files in a directory and sub directories](#adding-toc-to-all-files-in-a-directory-and-sub-directories)
+  - [Ignoring individual files](#ignoring-individual-files)
   - [Update existing doctoc TOCs effortlessly](#update-existing-doctoc-tocs-effortlessly)
   - [Adding toc to individual files](#adding-toc-to-individual-files)
     - [Examples](#examples)
@@ -17,14 +18,15 @@ by github or other sites via a command line flag.
     - [Example](#example)
   - [Specifying location of toc](#specifying-location-of-toc)
   - [Specifying a custom TOC title](#specifying-a-custom-toc-title)
+  - [Specifying a minimum heading level for TOC entries](#specifying-a-minimum-heading-level-for-toc-entries)
   - [Specifying a maximum heading level for TOC entries](#specifying-a-maximum-heading-level-for-toc-entries)
   - [Printing to stdout](#printing-to-stdout)
+  - [Only update existing ToC](#only-update-existing-toc)
   - [Usage as a `git` hook](#usage-as-a-git-hook)
   - [Docker image](#docker-image)
 
 <!-- END doctoc generated TOC please keep comment here to allow auto update -->
 
-
 ## Installation
 
     npm install -g doctoc
@@ -49,6 +51,7 @@ by the markdown parser. Doctoc defaults to using the GitHub parser, but other
 specified](#using-doctoc-to-generate-links-compatible-with-other-sites).
 
 ### Ignoring individual files
+
 In order to ignore a specific file when running `doctoc` on an entire directory, just add `<!-- DOCTOC SKIP -->` to the top of the file you wish to ignore.
 
 ### Update existing doctoc TOCs effortlessly
diff --git a/lib/transform.js b/lib/transform.js
index 19cb8dc..3a29f60 100644
--- a/lib/transform.js
+++ b/lib/transform.js
@@ -9,7 +9,7 @@ var _             = require('underscore')
 var start = '<!-- START doctoc generated TOC please keep comment here to allow auto update -->\n' +
             '<!-- DON\'T EDIT THIS SECTION, INSTEAD RE-RUN doctoc TO UPDATE -->'
   , end   = '<!-- END doctoc generated TOC please keep comment here to allow auto update -->'
-  , skipTag = '<!-- DOCTOC SKIP -->';
+  , skipTag = '<!-- DOCTOC SKIP -->\n';
 
 
 function matchesStart(line) {
@@ -109,7 +109,8 @@ function determineTitle(title, notitle, lines, info) {
 }
 
 exports = module.exports = function transform(content, mode, maxHeaderLevel, minHeaderLevel, title, notitle, entryPrefix, processAll, updateOnly) {
-  if (content.indexOf(skipTag) !== -1) return { transformed: false };
+  var index = content.indexOf(skipTag);
+  if (index === 0 || (index >= 0 && content[index-1] === '\n')) return { transformed: false };
 
   mode = mode || 'github.com';
   entryPrefix = entryPrefix || '-';
@@ -119,7 +120,7 @@ exports = module.exports = function transform(content, mode, maxHeaderLevel, min
   var maxHeaderLevelHtml = maxHeaderLevel || 4;
 
   var lines = content.split('\n')
-    , info = updateSection.parse(lines, matchesStart, matchesEnd)
+    , info = updateSection.parse(lines, matchesStart, matchesEnd);
 
   if (!info.hasStart && updateOnly) {
     return { transformed: false };
diff --git a/test/fixtures/readme-with-firstline-skipTag.md b/test/fixtures/readme-with-firstline-skipTag.md
new file mode 100644
index 0000000..9454a22
--- /dev/null
+++ b/test/fixtures/readme-with-firstline-skipTag.md
@@ -0,0 +1,8 @@
+<!-- DOCTOC SKIP -->
+# Hello, world!
+
+README to test doctoc with skipTag.
+
+## Installation
+## API
+## License
diff --git a/test/fixtures/readme-with-invalidskipTag.md b/test/fixtures/readme-with-invalidskipTag.md
new file mode 100644
index 0000000..077f3a1
--- /dev/null
+++ b/test/fixtures/readme-with-invalidskipTag.md
@@ -0,0 +1,9 @@
+# Hello, world!
+
+README to test doctoc with skipTag.
+
+<!-- DOCTOC SKIP -->`
+
+## Installation
+## API
+## License
diff --git a/test/transform-skipTag.js b/test/transform-skipTag.js
index 2517473..a609996 100644
--- a/test/transform-skipTag.js
+++ b/test/transform-skipTag.js
@@ -4,7 +4,7 @@
 var test = require('tap').test
   , transform = require('../lib/transform');
 
-test('\nskip file transform', function (t) {
+test('\nskip tag non first line transform', function (t) {
   var content = require('fs').readFileSync(__dirname + '/fixtures/readme-with-skipTag.md', 'utf8');
   var transformedContent = transform(content);
 
@@ -15,3 +15,27 @@ test('\nskip file transform', function (t) {
   )
   t.end()
 });
+
+test('\nskip tag first line transform', function (t) {
+  var content = require('fs').readFileSync(__dirname + '/fixtures/readme-with-firstline-skipTag.md', 'utf8');
+  var transformedContent = transform(content);
+
+  t.deepEqual(
+    transformedContent.toc
+    , undefined
+    , 'skip correct file'
+  )
+  t.end()
+});
+
+test('\nskip tag invalid nested transform', function (t) {
+  var content = require('fs').readFileSync(__dirname + '/fixtures/readme-with-invalidskipTag.md', 'utf8');
+  var transformedContent = transform(content);
+
+  t.deepEqual(
+    transformedContent.transformed
+    , true
+    , 'don\'t skip file as skipTag is invalid'
+  )
+  t.end()
+});