diff --git a/pymongo/database.py b/pymongo/database.py
index 96593cd43..7a4e06380 100644
--- a/pymongo/database.py
+++ b/pymongo/database.py
@@ -363,7 +363,7 @@ class Database(object):
             raise TypeError("username must be an instance of (str, unicode)")
 
         md5hash = _md5func()
-        md5hash.update(username + ":mongo:" + password)
+        md5hash.update(username.encode('utf-8') + ":mongo:" + password.encode('utf-8'))
         return unicode(md5hash.hexdigest())
 
     def authenticate(self, name, password):
diff --git a/test/test_database.py b/test/test_database.py
index 0cf91fe61..4a9d80c1c 100644
--- a/test/test_database.py
+++ b/test/test_database.py
@@ -227,6 +227,8 @@ class TestDatabase(unittest.TestCase):
                          u"cd7e45b3b2767dc2fa9b6b548457ed00")
         self.assertEqual(db._password_digest("mike", "password"),
                          db._password_digest(u"mike", u"password"))
+        self.assertEqual(db._password_digest("Gustave", u"Dor\xe9"),
+                         u"81e0e2364499209f466e75926a162d73")
 
     def test_authenticate(self):
         db = self.connection.pymongo_test