Index: Objects/unicodeobject.c
===================================================================
--- Objects/unicodeobject.c	(revision 77309)
+++ Objects/unicodeobject.c	(working copy)
@@ -8438,6 +8438,8 @@
     else if (PyString_Check(v)) {
         if (PyString_GET_SIZE(v) != 1)
             goto onError;
+        if (PyUnicode_FromString(PyString_AS_STRING(v)) == NULL)
+            return -1;
         buf[0] = (Py_UNICODE)PyString_AS_STRING(v)[0];
     }
 
Index: Lib/test/test_unicode.py
===================================================================
--- Lib/test/test_unicode.py	(revision 77309)
+++ Lib/test/test_unicode.py	(working copy)
@@ -395,6 +395,10 @@
         self.assertEqual(u'%c' % 0x1234, u'\u1234')
         self.assertRaises(OverflowError, u"%c".__mod__, (sys.maxunicode+1,))
 
+        # Issue 7649
+        for char in map(chr, range(0x80,0x100)):
+            self.assertRaises(UnicodeDecodeError, u"%c".__mod__, char)
+
         # formatting jobs delegated from the string implementation:
         self.assertEqual('...%(foo)s...' % {'foo':u"abc"}, u'...abc...')
         self.assertEqual('...%(foo)s...' % {'foo':"abc"}, '...abc...')