As XML usage grows for both data-centric and document-centric applications, introducing native support for XML data in relational databases brings significant benefits. It provides a more mature platform for the XML data model and serves as the basis for interoperability between relational and XML data. Whereas query processing on XML data shredded into one or more relational tables is well understood, it provides limited support for the XML data model. XML data can be persisted as a byte sequence (BLOB) in columns of tables to support the XML model more faithfully. This introduces new challenges for query processing such as the ability to index the XML blob for good query performance. This paper reports novel techniques for indexing XML data in the upcoming version of Microsoft® SQL Server™, and how it ties into the relational framework for query processing.