diff --git a/backup/backuplib.php b/backup/backuplib.php
index 3d267f08e87..5efee1ba92b 100644
--- a/backup/backuplib.php
+++ b/backup/backuplib.php
@@ -957,8 +957,16 @@
                         if(empty($blocks[$instance->blockid]->name)) {
                             continue;
                         }
-                        //Begin Block
 
+                        //Give the block a chance to process any links in configdata.
+                        if (!isset($blocks[$instance->blockid]->blockobject)) {
+                            $blocks[$instance->blockid]->blockobject = block_instance($blocks[$instance->blockid]->name);
+                        }
+                        $config = unserialize(base64_decode($instance->configdata));
+                        $blocks[$instance->blockid]->blockobject->backup_encode_absolute_links_in_config($config);
+                        $instance->configdata = base64_encode(serialize($config));
+
+                        //Begin Block
                         fwrite ($bf,start_tag('BLOCK',3,true));
                         fwrite ($bf,full_tag('ID', 4, false,$instance->id));
                         fwrite ($bf,full_tag('NAME',4,false,$blocks[$instance->blockid]->name));
diff --git a/backup/restorelib.php b/backup/restorelib.php
index 7b69462faa8..f8759ddb790 100644
--- a/backup/restorelib.php
+++ b/backup/restorelib.php
@@ -90,8 +90,29 @@
             }
         }
 
-        // TODO: process all html text also in blocks too
-
+        // Process all html text also in blocks too
+        if (!defined('RESTORE_SILENTLY')) {
+            echo '<li>' . get_string ('from') . ' ' . get_string('blocks');
+        }
+        if (!empty($restore->blockinstanceids)) {
+            $blocks = blocks_get_record();
+            $instances = get_records_list('block_instance', 'id', implode(',', $restore->blockinstanceids), '', 'id,blockid,configdata');
+            foreach ($instances as $instance) {
+                if (!isset($blocks[$instance->blockid]->blockobject)) {
+                    $blocks[$instance->blockid]->blockobject = block_instance($blocks[$instance->blockid]->name);
+                }
+                $config = unserialize(base64_decode($instance->configdata));
+                if ($blocks[$instance->blockid]->blockobject->restore_decode_absolute_links_in_config($config)) {
+echo '<p>Updating config for block ', $instance->id, '.</p>';
+                    $instance->configdata = base64_encode(serialize($config));
+                    $status = $status && update_record('block_instance', $instance);
+                }
+            }
+        }
+        if (!defined('RESTORE_SILENTLY')) {
+            echo '</li>';
+        }
+        
         // Restore links in questions.
         require_once("$CFG->dirroot/question/restorelib.php");
         if (!defined('RESTORE_SILENTLY')) {
@@ -759,6 +780,11 @@
     function restore_create_block_instances($restore,$xml_file) {
 
         $status = true;
+
+        // Tracks which blocks we create during the restore.
+        // This is used in restore_decode_content_links.
+        $restore->blockinstanceids = array();
+
         //Check it exists
         if (!file_exists($xml_file)) {
             $status = false;
@@ -851,6 +877,7 @@
                         if (!empty($instance->id)) { // this will only be set if we come from 1.7 and above backups
                             backup_putid ($restore->backup_unique_code,"block_instance",$instance->id,$newid);
                         }
+                        $restore->blockinstanceids[] = $newid;
                     } else {
                         $status = false;
                         break;
diff --git a/blocks/html/block_html.php b/blocks/html/block_html.php
index ff539610cbf..e6665e01bbf 100755
--- a/blocks/html/block_html.php
+++ b/blocks/html/block_html.php
@@ -35,5 +35,16 @@ class block_html extends block_base {
 
         return $this->content;
     }
+
+    function backup_encode_absolute_links_in_config(&$config) {
+        $config->text = backup_encode_absolute_links($config->text);
+    }
+
+    function restore_decode_absolute_links_in_config(&$config) {
+        debugging("In block_html::restore_decode_absolute_links_in_config"); // DONOTCOMMIT
+        $oldtext = $config->text;
+        $config->text = restore_decode_absolute_links($oldtext);
+        return $config->text != $oldtext;
+    }
 }
 ?>
diff --git a/blocks/moodleblock.class.php b/blocks/moodleblock.class.php
index e8598cec1ad..c0af39efe45 100644
--- a/blocks/moodleblock.class.php
+++ b/blocks/moodleblock.class.php
@@ -125,6 +125,28 @@ class block_base {
     function after_restore($restore) {
     }
 
+    /**
+     * Will be called before an instance of this block is backed up, so that any links in
+     * any links in any HTML fields on config can be encoded. For example, for the HTML block
+     * we need to do $config->text = backup_encode_absolute_links($config->text);. 
+     *
+     * @param object $config the config field for an insance of this class.
+     */
+    function backup_encode_absolute_links_in_config(&$config) {
+    }
+
+    /**
+     * Undo the effect of backup_encode_absolute_links_in_config. For exmaple, in the
+     * HTML block we need to do $config->text = restore_decode_absolute_links($config->text);
+     *
+     * @param object $config the config field for an insance of this class.
+     * @return boolean return true if something has changed, so the database can be updated,
+     *       false if not, for efficiency reasons.
+     */
+    function restore_decode_absolute_links_in_config(&$config) {
+        return false;
+    }
+
     /**
      * Returns the block name, as present in the class name,
      * the database, the block directory, etc etc.