Here's another approach...

# takes a marked-up string, a regular expression to determine which
# tag(s) we're interested in, and a code reference which will do the
# sub-string transformation. returns the modified string.
sub parse_and_replace {
  my ( $string, $tag_match, $transform_sub ) = @_;
  my @context_stack;
  my %deferred_transforms;
  # loop matching tags of the form {word} and {/word}
  while ( $string =~ m!(\{(/)?(\w+)\})!g ) {
    my ( $tag, $tag_length ) = ( $3, length($1) );
    my $is_close = $2 ? 1 : 0;
    if ( $is_close ) {
      # pop and possibly transform on finding a matching close tag
      # syntax check: properly nested?
      my $popped = pop @context_stack;
      if ( $tag ne $popped->{tag} ) {
        die "close '${\( $popped->{tag} )}' mis-matched with open '$ta
+g'\n";
      }
      # save start index and length of tag content if we match the
      # tag_to_match param.
      if ( $tag =~ /$tag_match/ ) {
        my $start = $popped->{pos},
        my $length = pos($string) - $popped->{pos};
        my $text = substr ( $string, $start, $length );
        if ( ! $deferred_transforms{$text} ) {
          $deferred_transforms{$text} = $transform_sub->("$text");
        }
      }
    } else {
      # just push onto the context stack on finding an open tag
      push @context_stack, { tag => $tag, pos => pos($string) - $tag_l
+ength};
    }
  }
  # now do the replacements
  my $error;
  foreach my $text ( keys %deferred_transforms ) {
    $string =~ s/$text/$deferred_transforms{$text}/g;
  }
  return $string;
}

# and to invoke:
my $string = q(
Outside.
{tag}
Inside level 1.
{tag}
Inside level 2.
{/tag}
Inside level 1.
{/tag}
Outside.
);

my $sub = sub {
  $_[0] =~ s/\{tag\}(.+)\{\/tag\}/--Marked--\n$1\n--EndMarked--/gis;
  return $_[0];
};

print "RESULT: " . parse_and_replace ( $string, 'tag', $sub );
[download]

I do think it's worth noting that parsing/manipulating recursively-nested markup is not trivial. (You should test the heck out of any custom-written solution -- including the one I just supplied -- before you even start to think about trusting it for your application.) I second Merlyn's advice about rolling modules into your distribution; Parse::RecDescent is powerful, flexible and de-bugged!

It isn't possible, as you're discovering, to do this kind of parsing with simple regexps. Unless you're willing to put severe limits on allowed markup structure, you'll need to parse recursively (or cheat a bit and save some context, as my code does, and as IO's code does in a much niftier way).

And parsing is only half the battle -- the transformation can be tricky, too. Unless you're willing to limit the kind of transformation that's allowed, you have to build a tree, do the transformations on each tree node, then put the tree back together into a string. (My sub above sidesteps tree-ization by limiting transformations to simple, stateless, one-to-one mappings between a given "{tag}content{/tag}" string and a "result" string.)

Kwin