diff --git a/honcho/environ.py b/honcho/environ.py
index 593926f..6f2862e 100644
--- a/honcho/environ.py
+++ b/honcho/environ.py
@@ -91,6 +91,8 @@ def parse(content):
             continue
         if not re.match(r'[A-Za-z_][A-Za-z_0-9]*', name):
             continue
+
+        value = value.decode('string_escape')
         values[name] = value
 
     return values
diff --git a/honcho/test/unit/test_environ.py b/honcho/test/unit/test_environ.py
index e727d06..2558a49 100644
--- a/honcho/test/unit/test_environ.py
+++ b/honcho/test/unit/test_environ.py
@@ -102,7 +102,20 @@
         MYVAR='sp ace'
         """,
         {'MYVAR': 'sp ace'}
-    ]
+    ],
+    [
+        # Escaped characters in value
+        r"""
+        TABS='foo\tbar'
+        NEWLINES='foo\nbar'
+        VTAB='foo\vbar'
+        DOLLAR='foo\$bar'
+        """,
+        {'TABS': 'foo\tbar',
+         'NEWLINES': 'foo\nbar',
+         'VTAB': 'foo\vbar',
+         'DOLLAR': 'foo\\$bar'}
+    ],
 ]
 
 PROCFILE_FIXTURES = [