diff --git a/src/python/pants/util/contextutil.py b/src/python/pants/util/contextutil.py
index bf6c3baeada..3f64e9d6798 100644
--- a/src/python/pants/util/contextutil.py
+++ b/src/python/pants/util/contextutil.py
@@ -48,6 +48,16 @@ def get_joined_path(new_entries, env=None, env_var='PATH', delimiter=':', prepen
   return delimiter.join(path_dirs)
 
 
+def _os_encode(u, enc=sys.getfilesystemencoding()):
+  """Turns a `unicode` into `bytes` via encoding."""
+  return u.encode(enc, 'strict')
+
+
+def _os_decode(b, enc=sys.getfilesystemencoding()):
+  """Turns a `bytes` into `unicode` via decoding."""
+  return b.decode(enc, 'strict')
+
+
 @contextmanager
 def environment_as(**kwargs):
   """Update the environment to the supplied values, for example:
@@ -61,7 +71,7 @@ def environment_as(**kwargs):
 
   def setenv(key, val):
     if val is not None:
-      os.environ[key] = val
+      os.environ[key] = _os_encode(val)
     else:
       if key in os.environ:
         del os.environ[key]
@@ -76,6 +86,10 @@ def setenv(key, val):
       setenv(key, val)
 
 
+def _copy_and_decode_env(env):
+  return {k: _os_decode(v) for k, v in env.items()}
+
+
 def _purge_env():
   # N.B. Without the use of `del` here (which calls `os.unsetenv` under the hood), subprocess32
   # invokes or other things that may access the environment at the C level may not see the
@@ -87,13 +101,13 @@ def _purge_env():
 
 def _restore_env(env):
   for k, v in env.items():
-    os.environ[k] = v
+    os.environ[k] = _os_encode(v)
 
 
 @contextmanager
 def hermetic_environment_as(**kwargs):
   """Set the environment to the supplied values from an empty state."""
-  old_environment = os.environ.copy()
+  old_environment = _copy_and_decode_env(os.environ)
   _purge_env()
   try:
     with environment_as(**kwargs):
diff --git a/tests/python/pants_test/pantsd/test_pantsd_integration.py b/tests/python/pants_test/pantsd/test_pantsd_integration.py
index 99e18f0c855..ed1f1763639 100644
--- a/tests/python/pants_test/pantsd/test_pantsd_integration.py
+++ b/tests/python/pants_test/pantsd/test_pantsd_integration.py
@@ -549,3 +549,11 @@ def test_pantsd_environment_scrubbing(self):
 
       result = pantsd_run(['compile', 'examples/src/java/org/pantsbuild/example/hello/simple'])
       self.assert_success(result)
+
+  def test_pantsd_unicode_environment(self):
+    with self.pantsd_successful_run_context(
+      extra_env={'XXX': '¡'},
+    ) as (pantsd_run, checker, workdir, _):
+      result = pantsd_run(['help'])
+      checker.assert_started()
+      self.assert_success(result)
diff --git a/tests/python/pants_test/util/test_contextutil.py b/tests/python/pants_test/util/test_contextutil.py
index 03b1cda71b9..6a49835b1fc 100644
--- a/tests/python/pants_test/util/test_contextutil.py
+++ b/tests/python/pants_test/util/test_contextutil.py
@@ -74,6 +74,16 @@ def test_hermetic_environment_subprocesses(self):
     self.assertIn('USER', os.environ)
     self.assertNotIn('AAA', os.environ)
 
+  def test_hermetic_environment_unicode(self):
+    UNICODE_CHAR = '¡'
+    ENCODED_CHAR = UNICODE_CHAR.encode('utf-8')
+    with environment_as(**dict(XXX=UNICODE_CHAR)):
+      self.assertEquals(os.environ['XXX'], ENCODED_CHAR)
+      with hermetic_environment_as(**dict(AAA=UNICODE_CHAR)):
+        self.assertIn('AAA', os.environ)
+        self.assertEquals(os.environ['AAA'], ENCODED_CHAR)
+      self.assertEquals(os.environ['XXX'], ENCODED_CHAR)
+
   def test_simple_pushd(self):
     pre_cwd = os.getcwd()
     with temporary_dir() as tempdir: