diff --git a/src/sed/command.rs b/src/sed/command.rs
index 250bcbc..ddb8f65 100644
--- a/src/sed/command.rs
+++ b/src/sed/command.rs
@@ -202,6 +202,7 @@ pub struct Substitution {
     pub occurrence: usize,                            // Which occurrence to substitute
     pub print_flag: bool,                             // True if 'p' flag
     pub ignore_case: bool,                            // True if 'I' flag
+    pub multiline: bool,                              // True if 'm' or 'M' flag
     pub write_file: Option<Rc<RefCell<NamedWriter>>>, // Writer to file if 'w' flag is used
 }
 
diff --git a/src/sed/compiler.rs b/src/sed/compiler.rs
index bcfff31..ef8f6af 100644
--- a/src/sed/compiler.rs
+++ b/src/sed/compiler.rs
@@ -460,7 +460,7 @@ fn compile_address(
             }
 
             Ok(Address::Re(compile_regex(
-                lines, line, &re, context, icase,
+                lines, line, &re, context, icase, false,
             )?))
         }
         '$' => {
@@ -628,6 +628,7 @@ fn compile_regex(
     pattern: &str,
     context: &ProcessingContext,
     icase: bool,
+    multiline: bool,
 ) -> UResult<Option<Regex>> {
     if pattern.is_empty() {
         return Ok(None);
@@ -640,11 +641,17 @@ fn compile_regex(
         &bre_to_ere(pattern)
     };
 
-    // Add case-insensitive modifier if needed.
-    let pattern = if icase {
-        format!("(?i){pattern}")
-    } else {
+    let mut modifiers = String::new();
+    if icase {
+        modifiers.push('i');
+    }
+    if multiline {
+        modifiers.push('m');
+    }
+    let pattern = if modifiers.is_empty() {
         pattern.to_string()
+    } else {
+        format!("(?{modifiers}){pattern}")
     };
 
     // Compile into engine.
@@ -793,7 +800,7 @@ fn compile_subst_command(
     subst.replacement = compile_replacement(lines, line)?;
     compile_subst_flags(lines, line, &mut subst)?;
 
-    if pattern.is_empty() && subst.ignore_case {
+    if pattern.is_empty() && (subst.ignore_case || subst.multiline) {
         return compilation_error(
             lines,
             line,
@@ -801,8 +808,15 @@ fn compile_subst_command(
         );
     }
 
-    // Compile regex with now known ignore_case flag.
-    subst.regex = compile_regex(lines, line, &pattern, context, subst.ignore_case)?;
+    // Compile regex with now known modifier flags.
+    subst.regex = compile_regex(
+        lines,
+        line,
+        &pattern,
+        context,
+        subst.ignore_case,
+        subst.multiline,
+    )?;
 
     // Catch invalid group references at compile time, if possible.
     if let Some(regex) = &subst.regex
@@ -871,6 +885,7 @@ pub fn compile_subst_flags(
     subst.occurrence = 1; // default
     subst.print_flag = false;
     subst.ignore_case = false;
+    subst.multiline = false;
     subst.write_file = None;
 
     loop {
@@ -903,6 +918,11 @@ pub fn compile_subst_flags(
                 line.advance();
             }
 
+            'm' | 'M' => {
+                subst.multiline = true;
+                line.advance();
+            }
+
             _c @ '1'..='9' => {
                 if seen_g_or_n {
                     return compilation_error(
@@ -1562,7 +1582,7 @@ mod tests {
     #[test]
     fn test_compile_re_basic() {
         let (lines, chars) = dummy_providers();
-        let regex = compile_regex(&lines, &chars, "abc", &ctx(), false)
+        let regex = compile_regex(&lines, &chars, "abc", &ctx(), false, false)
             .unwrap()
             .expect("regex should be present");
         assert!(regex.is_match(&mut IOChunk::new_from_str("abc")).unwrap());
@@ -1572,7 +1592,7 @@ mod tests {
     #[test]
     fn test_compile_re_case_insensitive() {
         let (lines, chars) = dummy_providers();
-        let regex = compile_regex(&lines, &chars, "abc", &ctx(), true)
+        let regex = compile_regex(&lines, &chars, "abc", &ctx(), true, false)
             .unwrap()
             .expect("regex should be present");
         assert!(regex.is_match(&mut IOChunk::new_from_str("abc")).unwrap());
@@ -1583,10 +1603,23 @@ mod tests {
     #[test]
     fn test_compile_re_invalid() {
         let (lines, chars) = dummy_providers();
-        let result = compile_regex(&lines, &chars, "a[d", &ctx(), false);
+        let result = compile_regex(&lines, &chars, "a[d", &ctx(), false, false);
         assert!(result.is_err()); // Should fail due to open bracketed expression
     }
 
+    #[test]
+    fn test_compile_re_multiline() {
+        let (lines, chars) = dummy_providers();
+        let regex = compile_regex(&lines, &chars, "^bar", &ctx(), false, true)
+            .unwrap()
+            .expect("regex should be present");
+        assert!(
+            regex
+                .is_match(&mut IOChunk::new_from_str("foo\nbar"))
+                .unwrap()
+        );
+    }
+
     // compile_address
     #[test]
     fn test_compile_addr_line_number() {
@@ -2064,6 +2097,24 @@ mod tests {
         assert!(subst.ignore_case);
     }
 
+    #[test]
+    fn test_compile_subst_flag_uppercase_m() {
+        let (lines, mut chars) = make_providers("M");
+        let mut subst = Substitution::default();
+
+        compile_subst_flags(&lines, &mut chars, &mut subst).unwrap();
+        assert!(subst.multiline);
+    }
+
+    #[test]
+    fn test_compile_subst_flag_m_lowercase() {
+        let (lines, mut chars) = make_providers("m");
+        let mut subst = Substitution::default();
+
+        compile_subst_flags(&lines, &mut chars, &mut subst).unwrap();
+        assert!(subst.multiline);
+    }
+
     #[test]
     fn test_compile_subst_flag_number() {
         let (lines, mut chars) = make_providers("3");
diff --git a/tests/by-util/test_sed.rs b/tests/by-util/test_sed.rs
index b31fed7..5f2870f 100644
--- a/tests/by-util/test_sed.rs
+++ b/tests/by-util/test_sed.rs
@@ -318,6 +318,24 @@ check_output!(subst_re_reuse, ["-e", r"2s//M/;1s/l/L/", LINES1]);
 check_output!(subst_newline_class, ["-n", r"1{;N;s/[\n]/X/;p;}", LINES1]);
 check_output!(subst_newline_re, ["-n", r"1{;N;s/\n/X/;p;}", LINES1]);
 
+#[test]
+fn subst_multiline_flag_matches_embedded_line_start() {
+    new_ucmd!()
+        .arg("N;s/^./X/gm")
+        .pipe_in("foo\nbar\n")
+        .succeeds()
+        .stdout_is("Xoo\nXar\n");
+}
+
+#[test]
+fn subst_multiline_flag_matches_embedded_line_end() {
+    new_ucmd!()
+        .arg("N;s/.$/X/gM")
+        .pipe_in("foo\nbar\n")
+        .succeeds()
+        .stdout_is("foX\nbaX\n");
+}
+
 // Check appropriate selection and behavior of fast_Regex matcher
 // Literal matcher
 check_output!(subst_literal_start, ["-e", r"s/^l1/L1/", LINES1]);