Index: Objects/unicodeobject.c
===================================================================
--- Objects/unicodeobject.c	(revision 78318)
+++ Objects/unicodeobject.c	(working copy)
@@ -8170,6 +8170,7 @@
            size_t buflen,
            PyObject *v)
 {
+    PyObject *s;
     /* presume that the buffer is at least 2 characters long */
     if (PyUnicode_Check(v)) {
         if (PyUnicode_GET_SIZE(v) != 1)
@@ -8180,6 +8181,11 @@
     else if (PyString_Check(v)) {
         if (PyString_GET_SIZE(v) != 1)
             goto onError;
+        s = PyUnicode_FromString(PyString_AS_STRING(v));
+        if (s == NULL) {
+            return -1;
+        }
+        Py_DECREF(s);
         buf[0] = (Py_UNICODE)PyString_AS_STRING(v)[0];
     }
 
Index: Lib/test/test_unicode.py
===================================================================
--- Lib/test/test_unicode.py	(revision 78318)
+++ Lib/test/test_unicode.py	(working copy)
@@ -395,6 +395,19 @@
         self.assertEqual(u'%c' % 0x1234, u'\u1234')
         self.assertRaises(OverflowError, u"%c".__mod__, (sys.maxunicode+1,))
 
+        for num in range(0x00,0x80):
+            char = chr(num)
+            self.assertEqual(u"%c" % char, char)
+            self.assertEqual(u"%c" % num, char)
+        # Issue 7649
+        for num in range(0x80,0x100):
+            uchar = unichr(num)
+            self.assertEqual(uchar, u"%c" % num)   # works only with ints
+            self.assertEqual(uchar, u"%c" % uchar) # and unicode chars
+            # the implicit decoding should fail for non-ascii chars
+            self.assertRaises(UnicodeDecodeError, u"%c".__mod__, chr(num))
+            self.assertRaises(UnicodeDecodeError, u"%s".__mod__, chr(num))
+
         # formatting jobs delegated from the string implementation:
         self.assertEqual('...%(foo)s...' % {'foo':u"abc"}, u'...abc...')
         self.assertEqual('...%(foo)s...' % {'foo':"abc"}, '...abc...')