diff --git a/src/interactive-window/editor-integration/cellFactory.unit.test.ts b/src/interactive-window/editor-integration/cellFactory.unit.test.ts
index 473c32ae64d..dbb92d8fb76 100644
--- a/src/interactive-window/editor-integration/cellFactory.unit.test.ts
+++ b/src/interactive-window/editor-integration/cellFactory.unit.test.ts
@@ -25,11 +25,13 @@ suite('CellFactory', () => {
         cells = generateCells(undefined, "#%% [markdown]\n'''\n# a\nb\n'''", true);
         assert.equal(cells.length, 1, 'Markdown cell multline failed');
         assert.equal(cells[0].languageId, 'markdown', 'Markdown cell not generated');
-        assert.equal(splitMarkdown(cells[0].value).length, 3, 'Lines for markdown not emitted');
+        assert.equal(splitMarkdown(cells[0].value).length, 2, 'Lines for markdown not emitted');
         cells = generateCells(undefined, '#%% [markdown]\n"""\n# a\nb\n"""', true);
         assert.equal(cells.length, 1, 'Markdown cell multline failed');
         assert.equal(cells[0].languageId, 'markdown', 'Markdown cell not generated');
-        assert.equal(splitMarkdown(cells[0].value).length, 3, 'Lines for markdown not emitted');
+        assert.equal(splitMarkdown(cells[0].value).length, 2, 'Lines for markdown not emitted');
+        // Test that line breaks are preserved correctly - no empty line between # a and b in the input
+        assert.equal(cells[0].value, '# a\nb', 'Markdown content should not add extra line breaks');
         cells = generateCells(undefined, '#%% \n"""\n# a\nb\n"""', true);
         assert.equal(cells.length, 1, 'Code cell multline failed');
         assert.equal(cells[0].languageId, 'python', 'Code cell not generated');
@@ -151,6 +153,31 @@ class Pizza(object):
         assert.equal(splitCode(cells[1].value).length, 7, 'Lines for code not emitted');
         assert.equal(splitCode(cells[1].value)[3], '        self.toppings = toppings', 'Lines for cell not emitted');
 
+        // Test for issue #9620 - line breaks in multi-line comments should be preserved
+        // eslint-disable-next-line no-multi-str
+        const multilineMarkdownWithBreaks = `#%% [markdown]
+
+"""
+# H1 Title
+
+description 1
+
+- item 1
+    - item 2
+- item 3
+
+description 2
+
+- item 4
+    - item 5
+- item 6
+"""`;
+        cells = generateCells(undefined, multilineMarkdownWithBreaks, true);
+        assert.equal(cells.length, 1, 'Markdown cell with line breaks failed');
+        assert.equal(cells[0].languageId, 'markdown', 'Markdown cell not generated');
+        const expectedContent = '# H1 Title\n\ndescription 1\n\n- item 1\n    - item 2\n- item 3\n\ndescription 2\n\n- item 4\n    - item 5\n- item 6';
+        assert.equal(cells[0].value, expectedContent, 'Markdown content should preserve line breaks and indentation correctly');
+
         // Non comments tests
         let nonComments = stripComments(multilineCode);
         assert.ok(nonComments.startsWith('myvar = """ # Lorem Ipsum'), 'Variable set to multiline string not working');
diff --git a/src/platform/common/utils.ts b/src/platform/common/utils.ts
index 612644e7f4e..c0bdffb6545 100644
--- a/src/platform/common/utils.ts
+++ b/src/platform/common/utils.ts
@@ -381,7 +381,7 @@ function extractComments(lines: string[]): string[] {
 
 export function generateMarkdownFromCodeLines(lines: string[]) {
     // Generate markdown by stripping out the comments and markdown header
-    return appendLineFeed(extractComments(lines.slice(lines.length > 1 ? 1 : 0)));
+    return extractComments(lines.slice(lines.length > 1 ? 1 : 0));
 }
 
 export function removeLinesFromFrontAndBackNoConcat(lines: string[]): string[] {
diff --git a/src/platform/common/utils.unit.test.ts b/src/platform/common/utils.unit.test.ts
index 9d5a87b6aee..2420fdc003a 100644
--- a/src/platform/common/utils.unit.test.ts
+++ b/src/platform/common/utils.unit.test.ts
@@ -2,7 +2,7 @@
 // Licensed under the MIT License.
 
 import { assert } from 'chai';
-import { formatStreamText } from './utils';
+import { formatStreamText, generateMarkdownFromCodeLines } from './utils';
 
 suite('Common Tests', () => {
     test('formatting stream text', async () => {
@@ -15,4 +15,59 @@ suite('Common Tests', () => {
         assert.equal(formatStreamText('\rExecute\rExecute\nExecute 8\rExecute 9\r\r'), 'Execute\nExecute 9');
         assert.equal(formatStreamText('\rExecute\rExecute\nExecute 10\rExecute 11\r\n'), 'Execute\nExecute 11\n');
     });
+
+    test('generateMarkdownFromCodeLines preserves line breaks correctly', () => {
+        // Test multi-line markdown with empty lines
+        const lines1 = [
+            '#%% [markdown]',
+            '',
+            '"""',
+            '# H1 Title',
+            '',
+            'description 1',
+            '',
+            '- item 1',
+            '    - item 2',
+            '- item 3',    
+            '"""'
+        ];
+        
+        const result1 = generateMarkdownFromCodeLines(lines1);
+        const markdown1 = result1.join('\n');
+        const expected1 = '# H1 Title\n\ndescription 1\n\n- item 1\n    - item 2\n- item 3';
+        assert.equal(markdown1, expected1, 'Multi-line markdown with empty lines should preserve line breaks');
+
+        // Test code block in markdown
+        const lines2 = [
+            '#%% [markdown]',
+            '',
+            '"""',
+            'Writing code blocks in markdown:',
+            '',
+            '```shell',
+            '# Comment 1',
+            '$ ls ',
+            '',
+            '# Comment 2',
+            '$ ls -lh',
+            '```',
+            '"""'
+        ];
+        
+        const result2 = generateMarkdownFromCodeLines(lines2);
+        const markdown2 = result2.join('\n');
+        const expected2 = 'Writing code blocks in markdown:\n\n```shell\n# Comment 1\n$ ls \n\n# Comment 2\n$ ls -lh\n```';
+        assert.equal(markdown2, expected2, 'Code blocks in markdown should preserve line breaks');
+
+        // Test single line markdown
+        const lines3 = [
+            '#%% [markdown]',
+            '"""Single line markdown"""'
+        ];
+        
+        const result3 = generateMarkdownFromCodeLines(lines3);
+        const markdown3 = result3.join('\n');
+        const expected3 = 'Single line markdown';
+        assert.equal(markdown3, expected3, 'Single line markdown should work correctly');
+    });
 });