diff --git a/homeassistant/components/stream/hls.py b/homeassistant/components/stream/hls.py
index c19db4f203f..467e4751208 100644
--- a/homeassistant/components/stream/hls.py
+++ b/homeassistant/components/stream/hls.py
@@ -85,7 +85,7 @@ class M3U8Renderer:
         for sequence in segments:
             segment = track.get_segment(sequence)
             playlist.extend([
-                "#EXTINF:{:.04},".format(float(segment.duration)),
+                "#EXTINF:{:.04f},".format(float(segment.duration)),
                 "./segment/{}.ts".format(segment.sequence),
             ])
 
diff --git a/homeassistant/components/stream/worker.py b/homeassistant/components/stream/worker.py
index 0292fd30596..d9bc248dc24 100644
--- a/homeassistant/components/stream/worker.py
+++ b/homeassistant/components/stream/worker.py
@@ -55,10 +55,16 @@ def stream_worker(hass, stream, quit_event):
 
     audio_frame = generate_audio_frame()
 
-    outputs = {}
     first_packet = True
+    # Holds the buffers for each stream provider
+    outputs = {}
+    # Keep track of the number of segments we've processed
     sequence = 1
+    # Holds the generated silence that needs to be muxed into the output
     audio_packets = {}
+    # The presentation timestamp of the first video packet we recieve
+    first_pts = 0
+    # The decoder timestamp of the latest packet we processed
     last_dts = None
 
     while not quit_event.is_set():
@@ -82,10 +88,18 @@ def stream_worker(hass, stream, quit_event):
             continue
         last_dts = packet.dts
 
+        # Reset timestamps from a 0 time base for this stream
+        packet.dts -= first_pts
+        packet.pts -= first_pts
+
         # Reset segment on every keyframe
         if packet.is_keyframe:
-            # Save segment to outputs
+            # Calculate the segment duration by multiplying the presentation
+            # timestamp by the time base, which gets us total seconds.
+            # By then dividing by the seqence, we can calculate how long
+            # each segment is, assuming the stream starts from 0.
             segment_duration = (packet.pts * packet.time_base) / sequence
+            # Save segment to outputs
             for fmt, buffer in outputs.items():
                 buffer.output.close()
                 del audio_packets[buffer.astream]
@@ -112,6 +126,12 @@ def stream_worker(hass, stream, quit_event):
 
         # First video packet tends to have a weird dts/pts
         if first_packet:
+            # If we are attaching to a live stream that does not reset
+            # timestamps for us, we need to do it ourselves by recording
+            # the first presentation timestamp and subtracting it from
+            # subsequent packets we recieve.
+            if (packet.pts * packet.time_base) > 1:
+                first_pts = packet.pts
             packet.dts = 0
             packet.pts = 0
             first_packet = False