diff -r 5d99042bd40f Lib/test/test_sax.py
--- a/Lib/test/test_sax.py	Tue Apr 02 12:15:07 2013 -0400
+++ b/Lib/test/test_sax.py	Tue Apr 02 13:28:26 2013 -0500
@@ -258,6 +258,25 @@
                 u'<doc a="\u20ac">\u20ac</doc>' % encoding
                 ).encode(encoding, 'xmlcharrefreplace'))
 
+    def test_xmlgen_encoding_str(self):
+        encodings = ('iso-8859-15', 'utf-8',
+                     'utf-16be', 'utf-16le',
+                     'utf-32be', 'utf-32le')
+        for encoding in encodings:
+            result = self.ioclass()
+            gen = XMLGenerator(result, encoding=encoding)
+
+            gen.startDocument()
+            gen.startElement("doc", {"a": u'\u20ac'})
+            gen.characters(u"\u20ac".encode(encoding,'replace'))
+            gen.endElement("doc")
+            gen.endDocument()
+
+            self.assertEqual(result.getvalue(), (
+                u'<?xml version="1.0" encoding="%s"?>\n'
+                u'<doc a="\u20ac">\u20ac</doc>' % encoding
+                ).encode(encoding, 'xmlcharrefreplace'))
+
     def test_xmlgen_unencodable(self):
         result = self.ioclass()
         gen = XMLGenerator(result, encoding='ascii')
diff -r 5d99042bd40f Lib/xml/sax/saxutils.py
--- a/Lib/xml/sax/saxutils.py	Tue Apr 02 12:15:07 2013 -0400
+++ b/Lib/xml/sax/saxutils.py	Tue Apr 02 13:28:26 2013 -0500
@@ -180,7 +180,10 @@
         self._write(u'</%s>' % self._qname(name))
 
     def characters(self, content):
-        self._write(escape(unicode(content)))
+        if isinstance(content, unicode):
+            self._write(escape(content))
+        else:
+            self._write(escape(unicode(content,self._encoding)))
 
     def ignorableWhitespace(self, content):
         self._write(unicode(content))