It seems to me that when ensure_ascii is False, the return value will be a unicode instance if and only if there's a unicode object anywhere in the input.

>>> json.dumps({'foo': 'bar'}, ensure_ascii=False)
'{"foo": "bar"}'

>>> json.dumps({'foo': u'bar'}, ensure_ascii=False)
u'{"foo": "bar"}'

>>> json.dumps({'foo': u'äiti'}, ensure_ascii=False)
u'{"foo": "\xe4iti"}'

>>> json.dumps({'foo': u'äiti'.encode('utf-8')}, ensure_ascii=False)
'{"foo": "\xc3\xa4iti"}'

>>> json.dumps({'foo': u'äiti'.encode('utf-16')}, ensure_ascii=False)
'{"foo": "\xff\xfe\xe4\\u0000i\\u0000t\\u0000i\\u0000"}'