diff --git a/docs/release_notes.rst b/docs/release_notes.rst
index 12b36663..b010fcf2 100644
--- a/docs/release_notes.rst
+++ b/docs/release_notes.rst
@@ -13,6 +13,8 @@ Bug Fixes
   e.g., init and initialize / initiate (#382).
 * Fix parser hanging when there's a comment directly after ``__all__``
   (#391, #366).
+* D202: Allow a blank line after function docstring when the function begins with
+  an inner function (#361).
 
 4.0.0 - July 6th, 2019
 ---------------------------
diff --git a/src/pydocstyle/checker.py b/src/pydocstyle/checker.py
index a45648fa..98b73315 100644
--- a/src/pydocstyle/checker.py
+++ b/src/pydocstyle/checker.py
@@ -199,7 +199,9 @@ def check_no_blank_before(self, function, docstring):  # def
             if blanks_before_count != 0:
                 yield violations.D201(blanks_before_count)
             if not all(blanks_after) and blanks_after_count != 0:
-                yield violations.D202(blanks_after_count)
+                def_follows = after.split("\n")[2].lstrip().startswith('def')
+                if not (blanks_after_count == 1 and def_follows):
+                    yield violations.D202(blanks_after_count)
 
     @check_for(Class)
     def check_blank_before_after_class(self, class_, docstring):
diff --git a/src/tests/test_cases/functions.py b/src/tests/test_cases/functions.py
new file mode 100644
index 00000000..d042508f
--- /dev/null
+++ b/src/tests/test_cases/functions.py
@@ -0,0 +1,29 @@
+""" Function docstrings """
+
+from .expected import Expectation
+
+expectation = Expectation()
+expect = expectation.expect
+
+
+@expect("D201: No blank lines allowed before docstring")
+def func_with_space_before():
+
+    """Func with space before."""
+    pass
+
+
+@expect("D202: No blank lines allowed after docstring")
+def func_with_space_after():
+    """Func with space after."""
+
+    pass
+
+
+def func_with_inner_func_after():
+    """Func with inner after."""
+
+    def inner():
+        pass
+
+    pass
diff --git a/src/tests/test_definitions.py b/src/tests/test_definitions.py
index 2d8e9be4..3a17af75 100644
--- a/src/tests/test_definitions.py
+++ b/src/tests/test_definitions.py
@@ -19,6 +19,7 @@
     'superfluous_quotes',
     'noqa',
     'sections',
+    'functions',
 ])
 def test_complex_file(test_case):
     """Run domain-specific tests from test.py file."""