diff --git a/cms/djangoapps/contentstore/views/helpers.py b/cms/djangoapps/contentstore/views/helpers.py
index 29e0f0bc6b..290a84deb0 100644
--- a/cms/djangoapps/contentstore/views/helpers.py
+++ b/cms/djangoapps/contentstore/views/helpers.py
@@ -44,11 +44,11 @@ def event(request):
     return HttpResponse(status=204)
 
 
-def render_from_lms(template_name, dictionary, context=None, namespace='main'):
+def render_from_lms(template_name, dictionary, namespace='main'):
     """
-    Render a template using the LMS MAKO_TEMPLATES
+    Render a template using the LMS Mako templates
     """
-    return render_to_string(template_name, dictionary, context, namespace="lms." + namespace)
+    return render_to_string(template_name, dictionary, namespace="lms." + namespace)
 
 
 def get_parent_xblock(xblock):
diff --git a/cms/envs/common.py b/cms/envs/common.py
index 5257b81e06..24fa7cd7b2 100644
--- a/cms/envs/common.py
+++ b/cms/envs/common.py
@@ -119,7 +119,7 @@ from lms.envs.common import (
     VIDEO_TRANSCRIPTS_SETTINGS,
 
     # Methods to derive settings
-    _make_main_mako_templates,
+    _make_mako_template_dirs,
     _make_locale_paths,
 )
 from path import Path as path
@@ -134,7 +134,7 @@ from openedx.core.djangoapps.theming.helpers_dirs import (
     get_theme_base_dirs_from_settings
 )
 from openedx.core.lib.license import LicenseMixin
-from openedx.core.lib.derived import derived, derived_dict_entry
+from openedx.core.lib.derived import derived, derived_collection_entry
 from openedx.core.release import doc_version
 
 ############################ FEATURE CONFIGURATION #############################
@@ -310,11 +310,9 @@ GEOIPV6_PATH = REPO_ROOT / "common/static/data/geoip/GeoIPv6.dat"
 
 ############################# TEMPLATE CONFIGURATION #############################
 # Mako templating
-# TODO: Move the Mako templating into a different engine in TEMPLATES below.
 import tempfile
 MAKO_MODULE_DIR = os.path.join(tempfile.gettempdir(), 'mako_cms')
-MAKO_TEMPLATES = {}
-MAIN_MAKO_TEMPLATES_BASE = [
+MAKO_TEMPLATE_DIRS_BASE = [
     PROJECT_ROOT / 'templates',
     COMMON_ROOT / 'templates',
     COMMON_ROOT / 'djangoapps' / 'pipeline_mako' / 'templates',
@@ -324,19 +322,27 @@ MAIN_MAKO_TEMPLATES_BASE = [
     OPENEDX_ROOT / 'core' / 'lib' / 'license' / 'templates',
     CMS_ROOT / 'djangoapps' / 'pipeline_js' / 'templates',
 ]
-MAKO_TEMPLATES['lms.main'] = lms.envs.common.MAIN_MAKO_TEMPLATES_BASE
 
-MAKO_TEMPLATES['main'] = _make_main_mako_templates
-derived_dict_entry('MAKO_TEMPLATES', 'main')
+CONTEXT_PROCESSORS = (
+    'django.template.context_processors.request',
+    'django.template.context_processors.static',
+    'django.contrib.messages.context_processors.messages',
+    'django.template.context_processors.i18n',
+    'django.contrib.auth.context_processors.auth',  # this is required for admin
+    'django.template.context_processors.csrf',
+    'dealer.contrib.django.staff.context_processor',  # access git revision
+    'help_tokens.context_processor',
+)
 
 # Django templating
 TEMPLATES = [
     {
+        'NAME': 'django',
         'BACKEND': 'django.template.backends.django.DjangoTemplates',
         # Don't look for template source files inside installed applications.
         'APP_DIRS': False,
         # Instead, look for template source files in these dirs.
-        'DIRS': MAIN_MAKO_TEMPLATES_BASE,
+        'DIRS': _make_mako_template_dirs,
         # Options specific to this backend.
         'OPTIONS': {
             'loaders': (
@@ -346,21 +352,36 @@ TEMPLATES = [
                 'edxmako.makoloader.MakoFilesystemLoader',
                 'edxmako.makoloader.MakoAppDirectoriesLoader',
             ),
-            'context_processors': (
-                'django.template.context_processors.request',
-                'django.template.context_processors.static',
-                'django.contrib.messages.context_processors.messages',
-                'django.template.context_processors.i18n',
-                'django.contrib.auth.context_processors.auth',  # this is required for admin
-                'django.template.context_processors.csrf',
-                'dealer.contrib.django.staff.context_processor',  # access git revision
-                'help_tokens.context_processor',
-            ),
+            'context_processors': CONTEXT_PROCESSORS,
             # Change 'debug' in your environment settings files - not here.
             'debug': False
         }
-    }
+    },
+    {
+        'NAME': 'mako',
+        'BACKEND': 'edxmako.backend.Mako',
+        'APP_DIRS': False,
+        'DIRS': _make_mako_template_dirs,
+        'OPTIONS': {
+            'context_processors': CONTEXT_PROCESSORS,
+            'debug': False,
+        }
+    },
+    {
+        # This separate copy of the Mako backend is used to render previews using the LMS templates
+        'NAME': 'preview',
+        'BACKEND': 'edxmako.backend.Mako',
+        'APP_DIRS': False,
+        'DIRS': lms.envs.common.MAKO_TEMPLATE_DIRS_BASE,
+        'OPTIONS': {
+            'context_processors': CONTEXT_PROCESSORS,
+            'debug': False,
+            'namespace': 'lms.main',
+        }
+    },
 ]
+derived_collection_entry('TEMPLATES', 0, 'DIRS')
+derived_collection_entry('TEMPLATES', 1, 'DIRS')
 DEFAULT_TEMPLATE_ENGINE = TEMPLATES[0]
 
 ##############################################################################
diff --git a/common/djangoapps/edxmako/__init__.py b/common/djangoapps/edxmako/__init__.py
index e7b68f44c3..7a8614bca5 100644
--- a/common/djangoapps/edxmako/__init__.py
+++ b/common/djangoapps/edxmako/__init__.py
@@ -14,3 +14,13 @@
 LOOKUP = {}
 
 from .paths import add_lookup, lookup_template, clear_lookups, save_lookups
+
+
+class Engines(object):
+    """
+    Aliases for the available template engines.
+    Note that the preview engine is only configured for cms.
+    """
+    DJANGO = 'django'
+    MAKO = 'mako'
+    PREVIEW = 'preview'
diff --git a/common/djangoapps/edxmako/apps.py b/common/djangoapps/edxmako/apps.py
index 20fe2a5a1c..fa1aa515f8 100644
--- a/common/djangoapps/edxmako/apps.py
+++ b/common/djangoapps/edxmako/apps.py
@@ -20,8 +20,11 @@ class EdxMakoConfig(AppConfig):
         IMPORTANT: This method can be called multiple times during application startup. Any changes to this method
         must be safe for multiple callers during startup phase.
         """
-        template_locations = settings.MAKO_TEMPLATES
-        for namespace, directories in template_locations.items():
+        for backend in settings.TEMPLATES:
+            if 'edxmako' not in backend['BACKEND']:
+                continue
+            namespace = backend['OPTIONS'].get('namespace', 'main')
+            directories = backend['DIRS']
             clear_lookups(namespace)
             for directory in directories:
                 add_lookup(namespace, directory)
diff --git a/common/djangoapps/edxmako/backend.py b/common/djangoapps/edxmako/backend.py
new file mode 100644
index 0000000000..43690901a5
--- /dev/null
+++ b/common/djangoapps/edxmako/backend.py
@@ -0,0 +1,67 @@
+"""
+Django template system engine for Mako templates.
+"""
+from __future__ import absolute_import, unicode_literals
+
+import logging
+
+from django.template import TemplateDoesNotExist, TemplateSyntaxError
+from django.template.backends.base import BaseEngine
+from django.template.context import _builtin_context_processors
+from django.utils.functional import cached_property
+from django.utils.module_loading import import_string
+from mako.exceptions import MakoException, TopLevelLookupException, text_error_template
+
+from openedx.core.djangoapps.theming.helpers import get_template_path
+
+from .paths import lookup_template
+from .template import Template
+
+LOGGER = logging.getLogger(__name__)
+
+
+class Mako(BaseEngine):
+    """
+    A Mako template engine to be added to the ``TEMPLATES`` Django setting.
+    """
+    app_dirname = 'templates'
+
+    def __init__(self, params):
+        """
+        Fetches template options, initializing BaseEngine properties,
+        and assigning our Mako default settings.
+        Note that OPTIONS contains backend-specific settings.
+        :param params: This is simply the template dict you
+                       define in your settings file.
+        """
+        params = params.copy()
+        options = params.pop('OPTIONS').copy()
+        super(Mako, self).__init__(params)
+        self.context_processors = options.pop('context_processors', [])
+        self.namespace = options.pop('namespace', 'main')
+
+    def from_string(self, template_code):
+        try:
+            return Template(template_code)
+        except MakoException:
+            message = text_error_template().render()
+            raise TemplateSyntaxError(message)
+
+    def get_template(self, template_name):
+        """
+        Loads and returns a template for the given name.
+        """
+        template_name = get_template_path(template_name)
+        try:
+            return Template(lookup_template(self.namespace, template_name), engine=self)
+        except TopLevelLookupException:
+            raise TemplateDoesNotExist(template_name)
+
+    @cached_property
+    def template_context_processors(self):
+        """
+        Collect and cache the active context processors.
+        """
+        context_processors = _builtin_context_processors
+        context_processors += tuple(self.context_processors)
+        return tuple(import_string(path) for path in context_processors)
diff --git a/common/djangoapps/edxmako/makoloader.py b/common/djangoapps/edxmako/makoloader.py
index 8ec7466217..cbff64e23e 100644
--- a/common/djangoapps/edxmako/makoloader.py
+++ b/common/djangoapps/edxmako/makoloader.py
@@ -2,7 +2,7 @@ import logging
 
 from django.conf import settings
 from django.core.exceptions import ImproperlyConfigured
-from django.template import Engine
+from django.template import Engine, engines
 from django.template.base import TemplateDoesNotExist
 from django.template.loaders.app_directories import Loader as AppDirectoriesLoader
 from django.template.loaders.filesystem import Loader as FilesystemLoader
@@ -16,8 +16,8 @@ log = logging.getLogger(__name__)
 class MakoLoader(object):
     """
     This is a Django loader object which will load the template as a
-    Mako template if the first line is "## mako". It is based off BaseLoader
-    in django.template.loader.
+    Mako template if the first line is "## mako". It is based off Loader
+    in django.template.loaders.base.
     We need this in order to be able to include mako templates inside main_django.html.
     """
 
@@ -53,7 +53,8 @@ class MakoLoader(object):
                                 output_encoding='utf-8',
                                 default_filters=['decode.utf8'],
                                 encoding_errors='replace',
-                                uri=template_name)
+                                uri=template_name,
+                                engine=engines['mako'])
             return template, None
         else:
             # This is a regular template
diff --git a/common/djangoapps/edxmako/management/__init__.py b/common/djangoapps/edxmako/management/__init__.py
deleted file mode 100644
index e69de29bb2..0000000000
diff --git a/common/djangoapps/edxmako/management/commands/__init__.py b/common/djangoapps/edxmako/management/commands/__init__.py
deleted file mode 100644
index e69de29bb2..0000000000
diff --git a/common/djangoapps/edxmako/request_context.py b/common/djangoapps/edxmako/request_context.py
index 41b0f466fa..71a7a42852 100644
--- a/common/djangoapps/edxmako/request_context.py
+++ b/common/djangoapps/edxmako/request_context.py
@@ -20,24 +20,12 @@ Methods for creating RequestContext for using with Mako templates.
 
 
 from crum import get_current_request
-from django.conf import settings
 from django.template import RequestContext
-from django.template.context import _builtin_context_processors
-from django.utils.module_loading import import_string
 
 import request_cache
 from util.request import safe_get_host
 
 
-def get_template_context_processors():
-    """
-    Returns the context processors defined in settings.TEMPLATES.
-    """
-    context_processors = _builtin_context_processors
-    context_processors += tuple(settings.DEFAULT_TEMPLATE_ENGINE['OPTIONS']['context_processors'])
-    return tuple(import_string(path) for path in context_processors)
-
-
 def get_template_request_context(request=None):
     """
     Returns the template processing context to use for the current request,
@@ -60,13 +48,6 @@ def get_template_request_context(request=None):
     context['is_secure'] = request.is_secure()
     context['site'] = safe_get_host(request)
 
-    # This used to happen when a RequestContext object was initialized but was
-    # moved to a different part of the logic when template engines were introduced.
-    # Since we are not using template engines we do this here.
-    # https://github.com/django/django/commit/37505b6397058bcc3460f23d48a7de9641cd6ef0
-    for processor in get_template_context_processors():
-        context.update(processor(request))
-
     request_cache_dict[cache_key] = context
 
     return context
diff --git a/common/djangoapps/edxmako/shortcuts.py b/common/djangoapps/edxmako/shortcuts.py
index d3187e08fe..f8045347e3 100644
--- a/common/djangoapps/edxmako/shortcuts.py
+++ b/common/djangoapps/edxmako/shortcuts.py
@@ -18,12 +18,12 @@ from urlparse import urljoin
 from django.conf import settings
 from django.core.urlresolvers import reverse
 from django.http import HttpResponse
-from django.template import Context
+from django.template import engines
 
-from edxmako import lookup_template
-from edxmako.request_context import get_template_request_context
 from openedx.core.djangoapps.site_configuration import helpers as configuration_helpers
-from openedx.core.djangoapps.theming.helpers import get_template_path, is_request_in_themed_site
+from openedx.core.djangoapps.theming.helpers import is_request_in_themed_site
+
+from . import Engines
 
 log = logging.getLogger(__name__)
 
@@ -131,7 +131,7 @@ def footer_context_processor(request):  # pylint: disable=unused-argument
     )
 
 
-def render_to_string(template_name, dictionary, context=None, namespace='main', request=None):
+def render_to_string(template_name, dictionary, namespace='main', request=None):
     """
     Render a Mako template to as a string.
 
@@ -147,52 +147,23 @@ def render_to_string(template_name, dictionary, context=None, namespace='main',
             from the template paths specified in configuration.
         dictionary: A dictionary of variables to insert into the template during
             rendering.
-        context: A :class:`~django.template.Context` with values to make
-            available to the template.
         namespace: The Mako namespace to find the named template in.
         request: The request to use to construct the RequestContext for rendering
             this template. If not supplied, the current request will be used.
     """
-
-    template_name = get_template_path(template_name)
-
-    context_instance = Context(dictionary)
-    # add dictionary to context_instance
-    context_instance.update(dictionary or {})
-    # collapse context_instance to a single dictionary for mako
-    context_dictionary = {}
-    context_instance['settings'] = settings
-    context_instance['EDX_ROOT_URL'] = settings.EDX_ROOT_URL
-    context_instance['marketing_link'] = marketing_link
-    context_instance['is_any_marketing_link_set'] = is_any_marketing_link_set
-    context_instance['is_marketing_link_set'] = is_marketing_link_set
-
-    # In various testing contexts, there might not be a current request context.
-    request_context = get_template_request_context(request)
-    if request_context:
-        for item in request_context:
-            context_dictionary.update(item)
-    for item in context_instance:
-        context_dictionary.update(item)
-    if context:
-        context_dictionary.update(context)
-
-    # "Fix" CSRF token by evaluating the lazy object
-    KEY_CSRF_TOKENS = ('csrf_token', 'csrf')
-    for key in KEY_CSRF_TOKENS:
-        if key in context_dictionary:
-            context_dictionary[key] = unicode(context_dictionary[key])
-
-    # fetch and render template
-    template = lookup_template(namespace, template_name)
-    return template.render_unicode(**context_dictionary)
+    if namespace == 'lms.main':
+        engine = engines[Engines.PREVIEW]
+    else:
+        engine = engines[Engines.MAKO]
+    template = engine.get_template(template_name)
+    return template.render(dictionary, request)
 
 
-def render_to_response(template_name, dictionary=None, context_instance=None, namespace='main', request=None, **kwargs):
+def render_to_response(template_name, dictionary=None, namespace='main', request=None, **kwargs):
     """
     Returns a HttpResponse whose content is filled with the result of calling
     lookup.get_template(args[0]).render with the passed arguments.
     """
 
     dictionary = dictionary or {}
-    return HttpResponse(render_to_string(template_name, dictionary, context_instance, namespace, request), **kwargs)
+    return HttpResponse(render_to_string(template_name, dictionary, namespace, request), **kwargs)
diff --git a/common/djangoapps/edxmako/template.py b/common/djangoapps/edxmako/template.py
index 2be367f966..3a4f8cb9dd 100644
--- a/common/djangoapps/edxmako/template.py
+++ b/common/djangoapps/edxmako/template.py
@@ -13,47 +13,89 @@
 #   limitations under the License.
 
 from django.conf import settings
+from django.template import Context, engines
 from mako.template import Template as MakoTemplate
+from six import text_type
 
-import edxmako
-from edxmako.request_context import get_template_request_context
-from edxmako.shortcuts import marketing_link
+from . import Engines, LOOKUP
+from .request_context import get_template_request_context
+from .shortcuts import is_any_marketing_link_set, is_marketing_link_set, marketing_link
+
+KEY_CSRF_TOKENS = ('csrf_token', 'csrf')
 
 
-# TODO: We should make this a Django Template subclass that simply has the MakoTemplate inside of it? (Intead of inheriting from MakoTemplate)
-
-
-class Template(MakoTemplate):
+class Template(object):
     """
-    This bridges the gap between a Mako template and a djano template. It can
-    be rendered like it is a django template because the arguments are transformed
+    This bridges the gap between a Mako template and a Django template. It can
+    be rendered like it is a Django template because the arguments are transformed
     in a way that MakoTemplate can understand.
     """
 
     def __init__(self, *args, **kwargs):
         """Overrides base __init__ to provide django variable overrides"""
-        if not kwargs.get('no_django', False):
-            kwargs['lookup'] = edxmako.LOOKUP['main']
-        super(Template, self).__init__(*args, **kwargs)
+        self.engine = kwargs.pop('engine', engines[Engines.MAKO])
+        if len(args) and isinstance(args[0], MakoTemplate):
+            self.mako_template = args[0]
+        else:
+            kwargs['lookup'] = LOOKUP['main']
+            self.mako_template = MakoTemplate(*args, **kwargs)
 
-    def render(self, context_instance):
+    def render(self, context=None, request=None):
         """
         This takes a render call with a context (from Django) and translates
         it to a render call on the mako template.
         """
-        # collapse context_instance to a single dictionary for mako
-        context_dictionary = {}
+        context_object = self._get_context_object(request)
+        context_dictionary = self._get_context_processors_output_dict(context_object)
 
-        # In various testing contexts, there might not be a current request context.
-        request_context = get_template_request_context()
-        if request_context:
-            for item in request_context:
-                context_dictionary.update(item)
-        for item in context_instance:
-            context_dictionary.update(item)
+        if isinstance(context, Context):
+            context_dictionary.update(context.flatten())
+        elif context is not None:
+            context_dictionary.update(context)
+
+        self._add_core_context(context_dictionary)
+        self._evaluate_lazy_csrf_tokens(context_dictionary)
+
+        return self.mako_template.render_unicode(**context_dictionary)
+
+    @staticmethod
+    def _get_context_object(request):
+        """
+        Get a Django RequestContext or Context, as appropriate for the situation.
+        In some tests, there might not be a current request.
+        """
+        request_context = get_template_request_context(request)
+        if request_context is not None:
+            return request_context
+        else:
+            return Context({})
+
+    def _get_context_processors_output_dict(self, context_object):
+        """
+        Run the context processors for the given context and get the output as a new dictionary.
+        """
+        with context_object.bind_template(self):
+            return context_object.flatten()
+
+    @staticmethod
+    def _add_core_context(context_dictionary):
+        """
+        Add to the given dictionary context variables which should always be
+        present, even when context processors aren't run during tests.  Using
+        a context processor should almost always be preferred to adding more
+        variables here.
+        """
         context_dictionary['settings'] = settings
         context_dictionary['EDX_ROOT_URL'] = settings.EDX_ROOT_URL
-        context_dictionary['django_context'] = context_instance
         context_dictionary['marketing_link'] = marketing_link
+        context_dictionary['is_any_marketing_link_set'] = is_any_marketing_link_set
+        context_dictionary['is_marketing_link_set'] = is_marketing_link_set
 
-        return super(Template, self).render_unicode(**context_dictionary)
+    @staticmethod
+    def _evaluate_lazy_csrf_tokens(context_dictionary):
+        """
+        Evaluate any lazily-evaluated CSRF tokens in the given context.
+        """
+        for key in KEY_CSRF_TOKENS:
+            if key in context_dictionary:
+                context_dictionary[key] = text_type(context_dictionary[key])
diff --git a/common/djangoapps/edxmako/templatetag_helpers.py b/common/djangoapps/edxmako/templatetag_helpers.py
deleted file mode 100644
index 153944bb77..0000000000
--- a/common/djangoapps/edxmako/templatetag_helpers.py
+++ /dev/null
@@ -1,52 +0,0 @@
-from django.template import loader
-from django.template.base import Context, Template
-from django.template.loader import get_template, select_template
-
-
-def django_template_include(file_name, mako_context):
-    """
-    This can be used within a mako template to include a django template
-    in the way that a django-style {% include %} does. Pass it context
-    which can be the mako context ('context') or a dictionary.
-    """
-
-    dictionary = dict(mako_context)
-    return loader.render_to_string(file_name, dictionary=dictionary)
-
-
-def render_inclusion(func, file_name, takes_context, django_context, *args, **kwargs):
-    """
-    This allows a mako template to call a template tag function (written
-    for django templates) that is an "inclusion tag". These functions are
-    decorated with @register.inclusion_tag.
-
-    -func: This is the function that is registered as an inclusion tag.
-    You must import it directly using a python import statement.
-    -file_name: This is the filename of the template, passed into the
-    @register.inclusion_tag statement.
-    -takes_context: This is a parameter of the @register.inclusion_tag.
-    -django_context: This is an instance of the django context. If this
-    is a mako template rendered through the regular django rendering calls,
-    a copy of the django context is available as 'django_context'.
-    -*args and **kwargs are the arguments to func.
-    """
-
-    if takes_context:
-        args = [django_context] + list(args)
-
-    _dict = func(*args, **kwargs)
-    if isinstance(file_name, Template):
-        t = file_name
-    elif not isinstance(file_name, basestring) and is_iterable(file_name):
-        t = select_template(file_name)
-    else:
-        t = get_template(file_name)
-
-    nodelist = t.nodelist
-
-    new_context = Context(_dict)
-    csrf_token = django_context.get('csrf_token', None)
-    if csrf_token is not None:
-        new_context['csrf_token'] = csrf_token
-
-    return nodelist.render(new_context)
diff --git a/common/lib/capa/capa/checker.py b/common/lib/capa/capa/checker.py
index a481be0c44..e0cd7c6950 100755
--- a/common/lib/capa/capa/checker.py
+++ b/common/lib/capa/capa/checker.py
@@ -24,14 +24,11 @@ class DemoSystem(object):
         self.lookup = TemplateLookup(directories=[path(__file__).dirname() / 'templates'])
         self.DEBUG = True
 
-    def render_template(self, template_filename, dictionary, context=None):
-        if context is None:
-            context = {}
-
-        context_dict = {}
-        context_dict.update(dictionary)
-        context_dict.update(context)
-        return self.lookup.get_template(template_filename).render(**context_dict)
+    def render_template(self, template_filename, dictionary):
+        """
+        Render the specified template with the given dictionary of context data.
+        """
+        return self.lookup.get_template(template_filename).render(**dictionary)
 
 
 def main():
diff --git a/lms/djangoapps/static_template_view/views.py b/lms/djangoapps/static_template_view/views.py
index 67bc790280..0082c21186 100644
--- a/lms/djangoapps/static_template_view/views.py
+++ b/lms/djangoapps/static_template_view/views.py
@@ -8,8 +8,8 @@ import mimetypes
 from django.conf import settings
 from django.http import Http404, HttpResponseNotFound, HttpResponseServerError
 from django.shortcuts import redirect
+from django.template import TemplateDoesNotExist
 from django.views.decorators.csrf import ensure_csrf_cookie
-from mako.exceptions import TopLevelLookupException
 
 from edxmako.shortcuts import render_to_response, render_to_string
 from util.cache import cache_if_anonymous
@@ -51,7 +51,7 @@ def render(request, template):
         if template == 'honor.html':
             context['allow_iframing'] = True
         return render_to_response('static_templates/' + template, context, content_type=content_type)
-    except TopLevelLookupException:
+    except TemplateDoesNotExist:
         raise Http404
 
 
@@ -68,7 +68,7 @@ def render_press_release(request, slug):
     template = slug.lower().replace('-', '_') + ".html"
     try:
         resp = render_to_response('static_templates/press_releases/' + template, {})
-    except TopLevelLookupException:
+    except TemplateDoesNotExist:
         raise Http404
     else:
         return resp
diff --git a/lms/envs/common.py b/lms/envs/common.py
index 3a6aa5246e..c4e50c175d 100644
--- a/lms/envs/common.py
+++ b/lms/envs/common.py
@@ -43,7 +43,7 @@ from openedx.core.djangoapps.theming.helpers_dirs import (
     get_themes_unchecked,
     get_theme_base_dirs_from_settings
 )
-from openedx.core.lib.derived import derived, derived_dict_entry
+from openedx.core.lib.derived import derived, derived_collection_entry
 from openedx.core.release import doc_version
 from xmodule.modulestore.modulestore_settings import update_module_store_settings
 from xmodule.modulestore.edit_info import EditInfoMixin
@@ -535,11 +535,9 @@ OAUTH2_PROVIDER_APPLICATION_MODEL = 'oauth2_provider.Application'
 
 ################################## TEMPLATE CONFIGURATION #####################################
 # Mako templating
-# TODO: Move the Mako templating into a different engine in TEMPLATES below.
 import tempfile
 MAKO_MODULE_DIR = os.path.join(tempfile.gettempdir(), 'mako_lms')
-MAKO_TEMPLATES = {}
-MAIN_MAKO_TEMPLATES_BASE = [
+MAKO_TEMPLATE_DIRS_BASE = [
     PROJECT_ROOT / 'templates',
     COMMON_ROOT / 'templates',
     COMMON_ROOT / 'lib' / 'capa' / 'capa' / 'templates',
@@ -550,24 +548,55 @@ MAIN_MAKO_TEMPLATES_BASE = [
 ]
 
 
-def _make_main_mako_templates(settings):
+def _make_mako_template_dirs(settings):
     """
-    Derives the final MAKO_TEMPLATES['main'] setting from other settings.
+    Derives the final Mako template directories list from other settings.
     """
     if settings.ENABLE_COMPREHENSIVE_THEMING:
         themes_dirs = get_theme_base_dirs_from_settings(settings.COMPREHENSIVE_THEME_DIRS)
-        for theme in get_themes_unchecked(themes_dirs, PROJECT_ROOT):
-            if theme.themes_base_dir not in settings.MAIN_MAKO_TEMPLATES_BASE:
-                settings.MAIN_MAKO_TEMPLATES_BASE.insert(0, theme.themes_base_dir)
+        for theme in get_themes_unchecked(themes_dirs, settings.PROJECT_ROOT):
+            if theme.themes_base_dir not in settings.MAKO_TEMPLATE_DIRS_BASE:
+                settings.MAKO_TEMPLATE_DIRS_BASE.insert(0, theme.themes_base_dir)
     if settings.FEATURES.get('USE_MICROSITES', False) and getattr(settings, "MICROSITE_CONFIGURATION", False):
-        settings.MAIN_MAKO_TEMPLATES_BASE.insert(0, settings.MICROSITE_ROOT_DIR)
-    return settings.MAIN_MAKO_TEMPLATES_BASE
-MAKO_TEMPLATES['main'] = _make_main_mako_templates
-derived_dict_entry('MAKO_TEMPLATES', 'main')
+        settings.MAKO_TEMPLATE_DIRS_BASE.insert(0, settings.MICROSITE_ROOT_DIR)
+    return settings.MAKO_TEMPLATE_DIRS_BASE
+
+
+CONTEXT_PROCESSORS = [
+    'django.template.context_processors.request',
+    'django.template.context_processors.static',
+    'django.contrib.messages.context_processors.messages',
+    'django.template.context_processors.i18n',
+    'django.contrib.auth.context_processors.auth',  # this is required for admin
+    'django.template.context_processors.csrf',
+
+    # Added for django-wiki
+    'django.template.context_processors.media',
+    'django.template.context_processors.tz',
+    'django.contrib.messages.context_processors.messages',
+    'sekizai.context_processors.sekizai',
+
+    # Hack to get required link URLs to password reset templates
+    'edxmako.shortcuts.marketing_link_context_processor',
+
+    # Shoppingcart processor (detects if request.user has a cart)
+    'shoppingcart.context_processor.user_has_cart_context_processor',
+
+    # Timezone processor (sends language and time_zone preference)
+    'courseware.context_processor.user_timezone_locale_prefs',
+
+    # Allows the open edX footer to be leveraged in Django Templates.
+    'edxmako.shortcuts.footer_context_processor',
+
+    # Online contextual help
+    'help_tokens.context_processor',
+    'openedx.core.djangoapps.site_configuration.context_processors.configuration_context'
+]
 
 # Django templating
 TEMPLATES = [
     {
+        'NAME': 'django',
         'BACKEND': 'django.template.backends.django.DjangoTemplates',
         # Don't look for template source files inside installed applications.
         'APP_DIRS': False,
@@ -588,41 +617,27 @@ TEMPLATES = [
                 'edxmako.makoloader.MakoFilesystemLoader',
                 'edxmako.makoloader.MakoAppDirectoriesLoader',
             ],
-            'context_processors': [
-                'django.template.context_processors.request',
-                'django.template.context_processors.static',
-                'django.contrib.messages.context_processors.messages',
-                'django.template.context_processors.i18n',
-                'django.contrib.auth.context_processors.auth',  # this is required for admin
-                'django.template.context_processors.csrf',
-
-                # Added for django-wiki
-                'django.template.context_processors.media',
-                'django.template.context_processors.tz',
-                'django.contrib.messages.context_processors.messages',
-                'sekizai.context_processors.sekizai',
-
-                # Hack to get required link URLs to password reset templates
-                'edxmako.shortcuts.marketing_link_context_processor',
-
-                # Shoppingcart processor (detects if request.user has a cart)
-                'shoppingcart.context_processor.user_has_cart_context_processor',
-
-                # Timezone processor (sends language and time_zone preference)
-                'courseware.context_processor.user_timezone_locale_prefs',
-
-                # Allows the open edX footer to be leveraged in Django Templates.
-                'edxmako.shortcuts.footer_context_processor',
-
-                # Online contextual help
-                'help_tokens.context_processor',
-                'openedx.core.djangoapps.site_configuration.context_processors.configuration_context'
-            ],
+            'context_processors': CONTEXT_PROCESSORS,
             # Change 'debug' in your environment settings files - not here.
             'debug': False
         }
-    }
+    },
+    {
+        'NAME': 'mako',
+        'BACKEND': 'edxmako.backend.Mako',
+        # Don't look for template source files inside installed applications.
+        'APP_DIRS': False,
+        # Instead, look for template source files in these dirs.
+        'DIRS': _make_mako_template_dirs,
+        # Options specific to this backend.
+        'OPTIONS': {
+            'context_processors': CONTEXT_PROCESSORS,
+            # Change 'debug' in your environment settings files - not here.
+            'debug': False,
+        }
+    },
 ]
+derived_collection_entry('TEMPLATES', 1, 'DIRS')
 DEFAULT_TEMPLATE_ENGINE = TEMPLATES[0]
 DEFAULT_TEMPLATE_ENGINE_DIRS = DEFAULT_TEMPLATE_ENGINE['DIRS'][:]
 
@@ -634,8 +649,10 @@ def _add_microsite_dirs_to_default_template_engine(settings):
     if settings.FEATURES.get('USE_MICROSITES', False) and getattr(settings, "MICROSITE_CONFIGURATION", False):
         DEFAULT_TEMPLATE_ENGINE_DIRS.append(settings.MICROSITE_ROOT_DIR)
     return DEFAULT_TEMPLATE_ENGINE_DIRS
+
+
 DEFAULT_TEMPLATE_ENGINE['DIRS'] = _add_microsite_dirs_to_default_template_engine
-derived_dict_entry('DEFAULT_TEMPLATE_ENGINE', 'DIRS')
+derived_collection_entry('DEFAULT_TEMPLATE_ENGINE', 'DIRS')
 
 ###############################################################################################
 
diff --git a/lms/envs/test.py b/lms/envs/test.py
index d2db7bf33b..7d028eb7c3 100644
--- a/lms/envs/test.py
+++ b/lms/envs/test.py
@@ -491,7 +491,7 @@ MICROSITE_LOGISTRATION_HOSTNAME = 'logistration.testserver'
 TEST_THEME = COMMON_ROOT / "test" / "test-theme"
 
 # add extra template directory for test-only templates
-MAIN_MAKO_TEMPLATES_BASE.extend([
+MAKO_TEMPLATE_DIRS_BASE.extend([
     COMMON_ROOT / 'test' / 'templates',
     COMMON_ROOT / 'test' / 'test_sites',
     REPO_ROOT / 'openedx' / 'core' / 'djangolib' / 'tests' / 'templates',
diff --git a/openedx/core/djangoapps/credit/email_utils.py b/openedx/core/djangoapps/credit/email_utils.py
index cc7ebadf29..99670b0634 100644
--- a/openedx/core/djangoapps/credit/email_utils.py
+++ b/openedx/core/djangoapps/credit/email_utils.py
@@ -113,7 +113,7 @@ def send_credit_notifications(username, course_key):
         else:
             email_body_content = ''
 
-    email_body = Template(email_body_content).render([context])
+    email_body = Template(email_body_content).render(context)
     msg_alternative.attach(SafeMIMEText(email_body, _subtype='html', _charset='utf-8'))
 
     # attach logo image
diff --git a/openedx/core/djangoapps/debug/views.py b/openedx/core/djangoapps/debug/views.py
index aa6ec5f6ad..3573f3c8f7 100644
--- a/openedx/core/djangoapps/debug/views.py
+++ b/openedx/core/djangoapps/debug/views.py
@@ -4,9 +4,9 @@ These views will NOT be shown on production: trying to access them will result
 in a 404 error.
 """
 from django.http import HttpResponseNotFound
+from django.template import TemplateDoesNotExist
 from django.utils.translation import ugettext as _
 from edxmako.shortcuts import render_to_response
-from mako.exceptions import TopLevelLookupException
 from openedx.core.djangoapps.util.user_messages import PageLevelMessages
 
 
@@ -51,5 +51,5 @@ def show_reference_template(request, template):
             PageLevelMessages.register_error_message(request, _('This is a test error'))
 
         return render_to_response(template, context)
-    except TopLevelLookupException:
+    except TemplateDoesNotExist:
         return HttpResponseNotFound('Missing template {template}'.format(template=template))
diff --git a/openedx/core/lib/derived.py b/openedx/core/lib/derived.py
index 63497e6756..de21fe8a64 100644
--- a/openedx/core/lib/derived.py
+++ b/openedx/core/lib/derived.py
@@ -17,21 +17,23 @@ def derived(*settings):
     Can be called multiple times to add more derived settings.
 
     Args:
-        settings (list): List of setting names to register.
+        settings (str): Setting names to register.
     """
     __DERIVED.extend(settings)
 
 
-def derived_dict_entry(setting_dict, key):
+def derived_collection_entry(collection_name, *accessors):
     """
-    Registers a setting which is a dictionary and needs a derived value for a particular key.
+    Registers a setting which is a dictionary or list and needs a derived value for a particular entry.
     Can be called multiple times to add more derived settings.
 
     Args:
-        setting_dict (str): Name of setting which contains a dictionary.
-        key (str): Name of key in the setting dictionary which will be derived.
+        collection_name (str): Name of setting which contains a dictionary or list.
+        accessors (int|str): Sequence of dictionary keys and list indices in the collection (and
+            collections within it) leading to the value which will be derived.
+            For example: 0, 'DIRS'.
     """
-    __DERIVED.append((setting_dict, key))
+    __DERIVED.append((collection_name, accessors))
 
 
 def derive_settings(module_name):
@@ -52,13 +54,16 @@ def derive_settings(module_name):
         elif isinstance(derived, tuple):
             # If a tuple, two elements are expected - else ignore.
             if len(derived) == 2:
-                # Both elements are expected to be strings.
-                # The first string is the attribute which is expected to be a dictionary.
-                # The second string is a key in that dictionary containing a derived setting.
-                setting = getattr(module, derived[0])[derived[1]]
+                # The first element is the name of the attribute which is expected to be a dictionary or list.
+                # The second element is a list of string keys in that dictionary leading to a derived setting.
+                collection = getattr(module, derived[0])
+                accessors = derived[1]
+                for accessor in accessors[:-1]:
+                    collection = collection[accessor]
+                setting = collection[accessors[-1]]
                 if callable(setting):
                     setting_val = setting(module)
-                    getattr(module, derived[0]).update({derived[1]: setting_val})
+                    collection[accessors[-1]] = setting_val
 
 
 def clear_for_tests():
diff --git a/openedx/core/lib/tests/test_derived.py b/openedx/core/lib/tests/test_derived.py
index c42a20bdee..ec6e6532dc 100644
--- a/openedx/core/lib/tests/test_derived.py
+++ b/openedx/core/lib/tests/test_derived.py
@@ -4,7 +4,7 @@ Tests for derived.py
 
 import sys
 from unittest import TestCase
-from openedx.core.lib.derived import derived, derive_settings, clear_for_tests
+from openedx.core.lib.derived import derived, derived_collection_entry, derive_settings, clear_for_tests
 
 
 class TestDerivedSettings(TestCase):
@@ -22,7 +22,9 @@ class TestDerivedSettings(TestCase):
         derived('DERIVED_VALUE', 'ANOTHER_DERIVED_VALUE')
         self.module.DICT_VALUE = {}
         self.module.DICT_VALUE['test_key'] = lambda settings: settings.DERIVED_VALUE * 3
-        derived(('DICT_VALUE', 'test_key'))
+        derived_collection_entry('DICT_VALUE', 'test_key')
+        self.module.DICT_VALUE['list_key'] = ['not derived', lambda settings: settings.DERIVED_VALUE]
+        derived_collection_entry('DICT_VALUE', 'list_key', 1)
 
     def test_derived_settings_are_derived(self):
         derive_settings(__name__)
@@ -42,3 +44,7 @@ class TestDerivedSettings(TestCase):
     def test_derived_dict_settings(self):
         derive_settings(__name__)
         self.assertEqual(self.module.DICT_VALUE['test_key'], 'mutter paneermutter paneermutter paneer')
+
+    def test_derived_nested_settings(self):
+        derive_settings(__name__)
+        self.assertEqual(self.module.DICT_VALUE['list_key'][1], 'mutter paneer')