diff --git a/lib/Newsletter/Editor/StructureTransformer.php b/lib/Newsletter/Editor/StructureTransformer.php
index 08d1222a1b..06dcdf6ebf 100644
--- a/lib/Newsletter/Editor/StructureTransformer.php
+++ b/lib/Newsletter/Editor/StructureTransformer.php
@@ -2,6 +2,7 @@
 namespace MailPoet\Newsletter\Editor;
 
 use pQuery;
+use MailPoet\Util\DOM as DOMUtil;
 
 if(!defined('ABSPATH')) exit;
 
@@ -17,29 +18,22 @@ class StructureTransformer {
   }
 
   /**
-   * Hoists images to root level, preserves order
-   * and inserts tags before top ancestor
+   * Hoists images to root level, preserves order by splitting neighboring
+   * elements and inserts tags as children of top ancestor
    */
-  private function hoistImagesToRoot($root) {
+  protected function hoistImagesToRoot($root) {
     foreach($root->query('img') as $item) {
-      $top_ancestor = $this->findTopAncestor($item);
+      $top_ancestor = DOMUtil::findTopAncestor($item);
       $offset = $top_ancestor->index();
 
       if($item->hasParent('a')) {
         $item = $item->parent;
       }
 
-      $item->changeParent($root, $offset);
+      DOMUtil::splitOn($item->getRoot(), $item);
     }
   }
 
-  private static function findTopAncestor($item) {
-    while($item->parent->parent !== null) {
-      $item = $item->parent;
-    }
-    return $item;
-  }
-
   /**
    * Transforms HTML tags into their respective JSON objects,
    * turns other root children into text blocks
diff --git a/lib/Util/DOM.php b/lib/Util/DOM.php
new file mode 100644
index 0000000000..380f734f3a
--- /dev/null
+++ b/lib/Util/DOM.php
@@ -0,0 +1,40 @@
+<?php
+namespace MailPoet\Util;
+use pQuery\DomNode;
+
+class DOM {
+
+  /**
+   * Splits a DOM tree around the cut element, bringing it up to bound
+   * ancestor and splitting left and right siblings into subtrees along
+   * the way, retaining order and nesting level.
+   */
+  static function splitOn(DomNode $bound, DomNode $cut_element) {
+    $ignore_text_and_comment_nodes = false;
+    for($parent = $cut_element->parent; $bound != $parent; $parent = $grandparent) {
+      // Clone parent node without children, but with attributes
+      $parent->after($parent->toString());
+      $right = $parent->getNextSibling($ignore_text_and_comment_nodes);
+      $right->clear();
+
+      while($sibling = $cut_element->getNextSibling($ignore_text_and_comment_nodes)) {
+        $sibling->move($right);
+      }
+
+      // Reattach cut_element and right siblings to grandparent
+      $grandparent = $parent->parent;
+      $index_after_parent = $parent->index() + 1;
+      $right->move($grandparent, $index_after_parent);
+      $index_after_parent = $parent->index() + 1;
+      $cut_element->move($grandparent, $index_after_parent);
+    }
+  }
+
+  static function findTopAncestor(DomNode $item) {
+    while($item->parent->parent !== null) {
+      $item = $item->parent;
+    }
+    return $item;
+  }
+
+}
diff --git a/tests/unit/Newsletter/Editor/StructureTransformerTest.php b/tests/unit/Newsletter/Editor/StructureTransformerTest.php
new file mode 100644
index 0000000000..ca6d736f54
--- /dev/null
+++ b/tests/unit/Newsletter/Editor/StructureTransformerTest.php
@@ -0,0 +1,30 @@
+<?php
+namespace MailPoet\Test\Newsletter\Editor;
+
+use pQuery;
+use MailPoet\Newsletter\Editor\StructureTransformer;
+
+class StructureTransformerTest extends \MailPoetTest {
+
+  function _before() {
+    $this->transformer = new StructureTransformer();
+  }
+
+  function testItExtractsImagesAsImageBlocks() {
+    $html = '<p><i>italic</i><em>previous text<a href="#mylink"><img src="#myimage" /></a>next text</em><b>bolded</b></p>';
+
+    $blocks = $this->transformer->transform($html, false);
+
+    expect($blocks)->count(3);
+    expect($blocks[0]['type'])->equals('text');
+    expect($blocks[0]['text'])->equals('<p><i>italic</i><em>previous text</em></p>');
+
+    expect($blocks[1]['type'])->equals('image');
+    expect($blocks[1]['src'])->equals('#myimage');
+    expect($blocks[1]['link'])->equals('#mylink');
+
+    expect($blocks[2]['type'])->equals('text');
+    expect($blocks[2]['text'])->equals('<p><em>next text</em><b>bolded</b></p>');
+  }
+
+}
diff --git a/tests/unit/Util/DOMTest.php b/tests/unit/Util/DOMTest.php
new file mode 100644
index 0000000000..12b3698f22
--- /dev/null
+++ b/tests/unit/Util/DOMTest.php
@@ -0,0 +1,29 @@
+<?php
+namespace MailPoet\Test\Util;
+
+use pQuery;
+use MailPoet\Util\DOM as DOMUtil;
+
+class DOMTest extends \MailPoetTest {
+
+  function _before() {
+    $this->root = pQuery::parseStr('<p><i>italic</i><em>previous text<a href="#mylink"><img src="#myimage" /></a>next text</em><b>bolded</b></p>');
+  }
+
+  function testItDeepSplitsDOMTreeByElement() {
+    DOMUtil::splitOn($this->root, $this->root->query('a')->offsetGet(0));
+
+    expect($this->root->html())->equals(
+      '<p><i>italic</i><em>previous text</em></p>'.
+      '<a href="#mylink"><img src="#myimage" /></a>'.
+      '<p><em>next text</em><b>bolded</b></p>'
+    );
+  }
+
+  function testItFindsTopAncestor() {
+    $image = $this->root->query('img')->offsetGet(0);
+    $paragraph = $this->root->query('p')->offsetGet(0);
+
+    expect(DOMUtil::findTopAncestor($image))->equals($paragraph);
+  }
+}