In this work, we present a new algorithm and benchmark dataset for stain separation in histology images. Histology is a critical and ubiquitous task in medical practice and research, serving as a gold standard of diagnosis for many diseases. Automating routine histology analysis tasks could reduce health care costs and improve diagnostic accuracy. One challenge in automation is that histology slides vary in their stain intensity and color; we therefore seek a digital method to normalize the appearance of histology images. As histology slides often have multiple stains on them that must be normalized independently, stain separation must occur before normalization. We propose a new digital stain separation method for the universally-used hematoxylin and eosin stain; this method improves on the state-of-the-art by adjusting the contrast of its eosin-only estimate and including a notion of stain interaction. To validate this method, we have collected a new benchmark dataset via chemical destaining containing ground truth images for stain separation, which we release publicly. Our experiments show that our method achieves more accurate stain separation than two comparison methods and that this improvement in separation accuracy leads to improved normalization.