Pretty much this. You need a stack because an single NEWLINE might result in 2 DEDENT tokens: if x: if y: f() g() You only need to keep

Pretty much this. You need a stack because an single NEWLINE might result in 2 DEDENT tokens: if x: if y: f() g() You only need to keep track of whitespace (spaces and/or tabs) after a newline (and you can skip lines with only whitespace & comments). It's also useful to keep tracks of delimiters (like parentheses and brackets), if you want to ignore newlines/indents inside expressions (like Python). The easiest IMO is writing a lexer using a lexer generator (Lex, Flex, ...) and outputting a NEWLINE(spaces) tokens, then have another class that keeps track of indents, parentheses, etc. I wrote a lexer/parser combo that (1) tracks whitespace in top (file) context, (2) ignores whitespace in expressions (parentheses, [] arrays, {} records), except (3) restarts indentation-tracking in {} blocks (even if they're in parentheses themselves!) - now that's hard to code (and debug LOL).