Index: django/utils/text.py
===================================================================
--- django/utils/text.py	(revision 4719)
+++ django/utils/text.py	(working copy)
@@ -17,7 +17,7 @@
         pos = len(word) - word.rfind('\n') - 1
         for word in it:
             if "\n" in word:
-                lines = word.splitlines()
+                lines = word.split('\n')
             else:
                 lines = (word,)
             pos += len(lines[0]) + 1
Index: tests/regressiontests/defaultfilters/tests.py
===================================================================
--- tests/regressiontests/defaultfilters/tests.py	(revision 4719)
+++ tests/regressiontests/defaultfilters/tests.py	(working copy)
@@ -133,6 +133,12 @@
 >>> wordwrap('this is a long paragraph of text that really needs to be wrapped I\'m afraid', 14)
 "this is a long\nparagraph of\ntext that\nreally needs\nto be wrapped\nI'm afraid"
 
+>>> wordwrap('this is a short paragraph of text.\n  But this line should be indented',14)
+'this is a\nshort\nparagraph of\ntext.\n  But this\nline should be\nindented'
+
+>>> wordwrap('this is a short paragraph of text.\n  But this line should be indented',15)
+'this is a short\nparagraph of\ntext.\n  But this line\nshould be\nindented'
+
 >>> ljust('test', 10)
 'test      '