diff --git a/lib/extras/liquid_view.rb b/lib/extras/liquid_view.rb
index b5d9076..5cce750 100644
--- a/lib/extras/liquid_view.rb
+++ b/lib/extras/liquid_view.rb
@@ -11,16 +11,25 @@ class LiquidView
   end
   
 
-  def render(template, local_assigns)
+  def render(template, local_assigns_for_rails_less_than_2_1_0 = nil)
     @action_view.controller.headers["Content-Type"] ||= 'text/html; charset=utf-8'
     assigns = @action_view.assigns.dup
     
+    # template is a Template object in Rails >=2.1.0, a source string previously.
+    if template.respond_to? :source
+      source = template.source
+      local_assigns = template.locals
+    else
+      source = template
+      local_assigns = local_assigns_for_rails_less_than_2_1_0
+    end
+
     if content_for_layout = @action_view.instance_variable_get("@content_for_layout")
       assigns['content_for_layout'] = content_for_layout
     end
     assigns.merge!(local_assigns)
     
-    liquid = Liquid::Template.parse(template)
+    liquid = Liquid::Template.parse(source)
     liquid.render(assigns, :filters => [@action_view.controller.master_helper_module], :registers => {:action_view => @action_view, :controller => @action_view.controller})
   end