diff --git a/django/db/models/options.py b/django/db/models/options.py
index bf604894c4..1228c06852 100644
--- a/django/db/models/options.py
+++ b/django/db/models/options.py
@@ -6,6 +6,7 @@ from django.db.models.loading import get_models
 from django.db.models.query import orderlist2sql
 from django.db.models import Manager
 from django.utils.translation import activate, deactivate_all, get_language, string_concat
+from django.utils.encoding import force_unicode, smart_str
 from bisect import bisect
 import re
 
@@ -90,9 +91,9 @@ class Options(object):
 
     def __repr__(self):
         return '<Options for %s>' % self.object_name
-        
+
     def __str__(self):
-        return "%s.%s" % (self.app_label, self.module_name)
+        return "%s.%s" % (smart_str(self.app_label), smart_str(self.module_name))
 
     def verbose_name_raw(self):
         """
@@ -102,7 +103,7 @@ class Options(object):
         """
         lang = get_language()
         deactivate_all()
-        raw = unicode(self.verbose_name)
+        raw = force_unicode(self.verbose_name)
         activate(lang)
         return raw
     verbose_name_raw = property(verbose_name_raw)
diff --git a/tests/modeltests/basic/models.py b/tests/modeltests/basic/models.py
index bac3f1c2e4..90e5d1755c 100644
--- a/tests/modeltests/basic/models.py
+++ b/tests/modeltests/basic/models.py
@@ -1,3 +1,4 @@
+# coding: utf-8
 """
 1. Bare-bones model
 
diff --git a/tests/regressiontests/model_regress/__init__.py b/tests/regressiontests/model_regress/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/regressiontests/model_regress/models.py b/tests/regressiontests/model_regress/models.py
new file mode 100644
index 0000000000..8b43c1c3e1
--- /dev/null
+++ b/tests/regressiontests/model_regress/models.py
@@ -0,0 +1,16 @@
+# coding: utf-8
+from django.db import models
+
+class Article(models.Model):
+    headline = models.CharField(maxlength=100, default='Default headline')
+    pub_date = models.DateTimeField()
+
+    class Meta:
+        ordering = ('pub_date','headline')
+        # A utf-8 verbose name (Ångström's Articles) to test they are valid.
+        verbose_name = "\xc3\x85ngstr\xc3\xb6m's Articles"
+
+    def __unicode__(self):
+        return self.headline
+
+__test__ = {'API_TESTS': "" }