diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0f480b577..8bc723299 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -74,6 +74,9 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Fixed
 
+- Fixed an issue in the `TranscriptProcessor` where newline characters could
+  cause the transcript output to be corrupted (e.g. missing all spaces).
+
 - Fixed an issue in `AudioBufferProcessor` when using `SmallWebRTCTransport` where, if
   the microphone was muted, track timing was not respected.
 
diff --git a/src/pipecat/processors/transcript_processor.py b/src/pipecat/processors/transcript_processor.py
index df6dd469b..424374faf 100644
--- a/src/pipecat/processors/transcript_processor.py
+++ b/src/pipecat/processors/transcript_processor.py
@@ -140,11 +140,13 @@ class AssistantTranscriptProcessor(BaseTranscriptProcessor):
                 Result: "Hello there how are you"
         """
         if self._current_text_parts and self._aggregation_start_time:
+            # Check specifically for space characters, previously isspace() was used
+            # but that includes all whitespace characters (e.g. \n), not just spaces.
             has_leading_spaces = any(
-                part and part[0].isspace() for part in self._current_text_parts[1:]
+                part and part[0] == " " for part in self._current_text_parts[1:]
             )
             has_trailing_spaces = any(
-                part and part[-1].isspace() for part in self._current_text_parts[:-1]
+                part and part[-1] == " " for part in self._current_text_parts[:-1]
             )
 
             # If there are embedded spaces in the fragments, use direct concatenation