diff --git a/cheetah/Template.py b/cheetah/Template.py
index eeeeb954..aa924f83 100644
--- a/cheetah/Template.py
+++ b/cheetah/Template.py
@@ -779,7 +779,7 @@ def __str__(self): return self.respond()
                     setattr(mod, baseclassName, baseclassValue)
                 ##
                 try:
-                    co = compile(generatedModuleCode.encode(outputEncoding), __file__, 'exec')
+                    co = compile(generatedModuleCode, __file__, 'exec')
                     exec co in mod.__dict__
                 except SyntaxError, e:
                     try: