diff --git a/os_testr/subunit2html.py b/os_testr/subunit2html.py
index 6711025..e151dca 100755
--- a/os_testr/subunit2html.py
+++ b/os_testr/subunit2html.py
@@ -53,6 +53,7 @@ NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
 SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
 """
 
+import codecs
 import collections
 import datetime
 import io
@@ -680,9 +681,16 @@ class HtmlOutput(testtools.TestResult):
         tmpl = (has_output and TemplateData.REPORT_TEST_WITH_OUTPUT_TMPL or
                 TemplateData.REPORT_TEST_NO_OUTPUT_TMPL)
 
+        try:
+            output = saxutils.escape(o + e)
+        # We expect to get this exception in python2.
+        except UnicodeDecodeError:
+            e = codecs.decode(e, 'utf-8')
+            output = saxutils.escape(o + e)
+
         script = TemplateData.REPORT_TEST_OUTPUT_TMPL % dict(
             id=tid,
-            output=saxutils.escape(o + e),
+            output=output,
         )
 
         row = tmpl % dict(
diff --git a/os_testr/tests/test_subunit2html.py b/os_testr/tests/test_subunit2html.py
index 57e92bb..8bd6b8f 100644
--- a/os_testr/tests/test_subunit2html.py
+++ b/os_testr/tests/test_subunit2html.py
@@ -76,3 +76,17 @@ class TestSubunit2html(base.TestCase):
                                 'example.path.to.test8']
         for i, r in enumerate(sorted_result):
             self.assertEqual(expected_class_order[i], str(r[0]))
+
+    @data(RemotedTestCase, PlaceHolder)
+    def test_generate_report_with_no_ascii_characters(self, test_cls):
+        # The test examines a case where an error containing no ascii
+        # characters is received.
+        test = test_cls(u'example.path.to.test1.method')
+        try:
+            raise Exception('\xe2\x82\xa5')
+        except Exception:
+            err = sys.exc_info()
+        obj = subunit2html.HtmlOutput()
+        # Add failure that contains no ascii characters
+        obj.addFailure(test, err)
+        obj._generate_report()