diff --git a/bin/ansible b/bin/ansible
index 209b235c88d..a117856d899 100755
--- a/bin/ansible
+++ b/bin/ansible
@@ -38,6 +38,7 @@ import traceback
 
 from ansible.errors import AnsibleError, AnsibleOptionsError, AnsibleParserError
 from ansible.utils.display import Display
+from ansible.utils.unicode import to_unicode
 
 ########################################
 ### OUTPUT OF LAST RESORT ###
@@ -82,10 +83,10 @@ if __name__ == '__main__':
 
     except AnsibleOptionsError as e:
         cli.parser.print_help()
-        display.error(str(e), wrap_text=False)
+        display.error(to_unicode(e), wrap_text=False)
         sys.exit(5)
     except AnsibleParserError as e:
-        display.error(str(e), wrap_text=False)
+        display.error(to_unicode(e), wrap_text=False)
         sys.exit(4)
 # TQM takes care of these, but leaving comment to reserve the exit codes
 #    except AnsibleHostUnreachable as e:
@@ -95,14 +96,14 @@ if __name__ == '__main__':
 #        display.error(str(e))
 #        sys.exit(2)
     except AnsibleError as e:
-        display.error(str(e), wrap_text=False)
+        display.error(to_unicode(e), wrap_text=False)
         sys.exit(1)
     except KeyboardInterrupt:
         display.error("User interrupted execution")
         sys.exit(99)
     except Exception as e:
         have_cli_options = cli is not None and cli.options is not None
-        display.error("Unexpected Exception: %s" % str(e), wrap_text=False)
+        display.error("Unexpected Exception: %s" % to_unicode(e), wrap_text=False)
         if not have_cli_options or have_cli_options and cli.options.verbosity > 2:
             display.display("the full traceback was:\n\n%s" % traceback.format_exc())
         else:
diff --git a/lib/ansible/errors/__init__.py b/lib/ansible/errors/__init__.py
index 63fb8ef023a..f46c4f34c9a 100644
--- a/lib/ansible/errors/__init__.py
+++ b/lib/ansible/errors/__init__.py
@@ -22,6 +22,7 @@ __metaclass__ = type
 import os
 
 from ansible.errors.yaml_strings import *
+from ansible.utils.unicode import to_unicode, to_bytes
 
 class AnsibleError(Exception):
     '''
@@ -48,7 +49,7 @@ class AnsibleError(Exception):
         if obj and isinstance(obj, AnsibleBaseYAMLObject):
             extended_error = self._get_extended_error()
             if extended_error:
-                self.message = 'ERROR! %s\n\n%s' % (message, extended_error)
+                self.message = 'ERROR! %s\n\n%s' % (message, to_bytes(extended_error))
         else:
             self.message = 'ERROR! %s' % message
 
@@ -96,6 +97,8 @@ class AnsibleError(Exception):
             error_message += YAML_POSITION_DETAILS % (src_file, line_number, col_number)
             if src_file not in ('<string>', '<unicode>') and self._show_content:
                 (target_line, prev_line) = self._get_error_lines_from_file(src_file, line_number - 1)
+                target_line = to_unicode(target_line)
+                prev_line = to_unicode(prev_line)
                 if target_line:
                     stripped_line = target_line.replace(" ","")
                     arrow_line    = (" " * (col_number-1)) + "^ here"
diff --git a/test/units/errors/test_errors.py b/test/units/errors/test_errors.py
index 3993ea5061b..4c09c0089b3 100644
--- a/test/units/errors/test_errors.py
+++ b/test/units/errors/test_errors.py
@@ -31,6 +31,7 @@ class TestErrors(unittest.TestCase):
 
     def setUp(self):
         self.message = 'This is the error message'
+        self.unicode_message = 'This is an error with \xf0\x9f\x98\xa8 in it'
 
         self.obj = AnsibleBaseYAMLObject()
 
@@ -42,6 +43,11 @@ class TestErrors(unittest.TestCase):
         self.assertEqual(e.message, 'ERROR! ' + self.message)
         self.assertEqual(e.__repr__(), 'ERROR! ' + self.message)
 
+    def test_basic_unicode_error(self):
+        e = AnsibleError(self.unicode_message)
+        self.assertEqual(e.message, 'ERROR! ' + self.unicode_message)
+        self.assertEqual(e.__repr__(), 'ERROR! ' + self.unicode_message)
+
     @patch.object(AnsibleError, '_get_error_lines_from_file')
     def test_error_with_object(self, mock_method):
         self.obj.ansible_pos = ('foo.yml', 1, 1)
@@ -66,3 +72,12 @@ class TestErrors(unittest.TestCase):
             e = AnsibleError(self.message, self.obj)
             self.assertEqual(e.message, "ERROR! This is the error message\n\nThe error appears to have been in 'foo.yml': line 2, column 1, but may\nbe elsewhere in the file depending on the exact syntax problem.\n\n(specified line no longer in file, maybe it changed?)")
 
+        m = mock_open()
+        m.return_value.readlines.return_value = ['this line has unicode \xf0\x9f\x98\xa8 in it!\n']
+
+        with patch('{0}.open'.format(BUILTINS), m):
+            # this line will be found in the file
+            self.obj.ansible_pos = ('foo.yml', 1, 1)
+            e = AnsibleError(self.unicode_message, self.obj)
+            self.assertEqual(e.message, "ERROR! This is an error with \xf0\x9f\x98\xa8 in it\n\nThe error appears to have been in 'foo.yml': line 1, column 1, but may\nbe elsewhere in the file depending on the exact syntax problem.\n\nThe offending line appears to be:\n\n\nthis line has unicode \xf0\x9f\x98\xa8 in it!\n^ here\n")
+