diff --git a/CHANGES.rst b/CHANGES.rst
index c807a20..2d8e8cf 100644
--- a/CHANGES.rst
+++ b/CHANGES.rst
@@ -4,10 +4,11 @@ Changelog
 Here you can see the full list of changes between each SQLAlchemy-Utils release.
 
 
-0.29.3 (2015-xx-xx)
+0.29.3 (2015-01-24)
 ^^^^^^^^^^^^^^^^^^^
 
 - Fixed analyze function runtime property handling for PostgreSQL >= 9.4
+- Fixed drop_database and create_database identifier quoting (#122)
 
 
 0.29.2 (2015-01-08)
diff --git a/sqlalchemy_utils/functions/database.py b/sqlalchemy_utils/functions/database.py
index 8642290..b89442b 100644
--- a/sqlalchemy_utils/functions/database.py
+++ b/sqlalchemy_utils/functions/database.py
@@ -8,6 +8,8 @@ from sqlalchemy.engine.url import make_url
 from sqlalchemy.exc import ProgrammingError, OperationalError
 from sqlalchemy_utils.expressions import explain_analyze
 
+from .orm import quote
+
 
 class PlanAnalysis(object):
     def __init__(self, plan):
@@ -429,20 +431,25 @@ def create_database(url, encoding='utf8', template=None):
         if not template:
             template = 'template0'
 
-        text = "CREATE DATABASE %s ENCODING '%s' TEMPLATE %s" % (
-            database, encoding, template
+        text = "CREATE DATABASE {0} ENCODING '{1}' TEMPLATE {2}".format(
+            quote(engine, database),
+            encoding,
+            quote(engine, template)
         )
         engine.execute(text)
 
     elif engine.dialect.name == 'mysql':
-        text = "CREATE DATABASE %s CHARACTER SET = '%s'" % (database, encoding)
+        text = "CREATE DATABASE {0} CHARACTER SET = '{1}'".format(
+            quote(engine, database),
+            encoding
+        )
         engine.execute(text)
 
     elif engine.dialect.name == 'sqlite' and database != ':memory:':
         open(database, 'w').close()
 
     else:
-        text = "CREATE DATABASE %s" % database
+        text = 'CREATE DATABASE {0}'.format(quote(engine, database))
         engine.execute(text)
 
 
@@ -481,7 +488,7 @@ def drop_database(url):
         version = list(
             map(
                 int,
-                engine.execute('SHOW server_version;').first()[0].split('.')
+                engine.execute('SHOW server_version').first()[0].split('.')
             )
         )
         pid_column = (
@@ -496,9 +503,9 @@ def drop_database(url):
         engine.execute(text)
 
         # Drop the database.
-        text = "DROP DATABASE %s" % database
+        text = 'DROP DATABASE {0}'.format(quote(engine, database))
         engine.execute(text)
 
     else:
-        text = "DROP DATABASE %s" % database
+        text = 'DROP DATABASE {0}'.format(quote(engine, database))
         engine.execute(text)
diff --git a/tests/functions/test_database.py b/tests/functions/test_database.py
index 24ff99f..49c13f1 100644
--- a/tests/functions/test_database.py
+++ b/tests/functions/test_database.py
@@ -28,7 +28,6 @@ class DatabaseTest(TestCase):
 
 
 class TestDatabaseSQLite(DatabaseTest):
-
     url = 'sqlite:///sqlalchemy_utils.db'
 
     def setup(self):
@@ -44,6 +43,30 @@ class TestDatabaseMySQL(DatabaseTest):
     url = 'mysql+pymysql://travis@localhost/db_test_sqlalchemy_util'
 
 
+@mark.skipif('pymysql is None')
+class TestDatabaseMySQLWithQuotedName(DatabaseTest):
+    url = 'mysql+pymysql://travis@localhost/db_test_sqlalchemy-util'
+
+
+class TestDatabasePostgresWithQuotedName(DatabaseTest):
+    url = 'postgres://postgres@localhost/db_test_sqlalchemy-util'
+
+    def test_template(self):
+        (
+            flexmock(sa.engine.Engine)
+            .should_receive('execute')
+            .with_args(
+                '''CREATE DATABASE "db_test_sqlalchemy-util"'''
+                " ENCODING 'utf8' "
+                'TEMPLATE "my-template"'
+            )
+        )
+        create_database(
+            'postgres://postgres@localhost/db_test_sqlalchemy-util',
+            template='my-template'
+        )
+
+
 class TestDatabasePostgres(DatabaseTest):
     url = 'postgres://postgres@localhost/db_test_sqlalchemy_util'