diff --git a/README.md b/README.md
index 7689983..ec5e0bf 100644
--- a/README.md
+++ b/README.md
@@ -143,7 +143,7 @@ In this case no table will have a `parent` attribute, elements will not have the
     followed by `closeElement("bar")`
   - `<foo> 5 < 6 </foo>` is seen as valid text contents
 - No support for custom entity expansion other than the standard XML
-  entities (`&lt; &gt; &quot; &apos; &amp;`) and numeric ASCII entities
+  entities (`&lt; &gt; &quot; &apos; &amp;`) and numeric entities
   (e.g. `&#10;` or `&#x3c;`)
 - XML Declarations (`<?xml version="1.x"?>`) are incorrectly reported
   as Processing Instructions
@@ -157,6 +157,13 @@ In this case no table will have a `parent` attribute, elements will not have the
 
 ## History
 
+### v0.7 2014-Sep-26
++ Decodes entities above 127 as UTF8 (decimal and hexadecimal).
+  - The encoding specified by the document is (still) ignored.
+    If you parse an XML file encoded in some other format, that
+    intermixes 'raw' high-byte characters with high-byte entities,
+    the result will be a broken encoding.
+
 ### v0.6.1 2014-Sep-25
 + Fixes Issue #6, adding support for ASCII hexadecimal entities (e.g. `&#x3c;`). (Thanks Leorex/Ben Bishop)
 
diff --git a/slaxml.lua b/slaxml.lua
index 7fa26d2..5bf8189 100644
--- a/slaxml.lua
+++ b/slaxml.lua
@@ -1,9 +1,9 @@
 --[=====================================================================[
-v0.6.1 Copyright © 2013-2014 Gavin Kistner <!@phrogz.net>; MIT Licensed
+v0.7 Copyright © 2013-2014 Gavin Kistner <!@phrogz.net>; MIT Licensed
 See http://github.com/Phrogz/SLAXML for details.
 --]=====================================================================]
 local SLAXML = {
-	VERSION = "0.6.1",
+	VERSION = "0.7",
 	_call = {
 		pi = function(target,content)
 			print(string.format("<?%s %s?>",target,content))
@@ -12,16 +12,16 @@ local SLAXML = {
 			print(string.format("<!-- %s -->",content))
 		end,
 		startElement = function(name,nsURI,nsPrefix)
-			                 io.write("<")
+											 io.write("<")
 			if nsPrefix then io.write(nsPrefix,":") end
-			                 io.write(name)
+											 io.write(name)
 			if nsURI    then io.write(" (ns='",nsURI,"')") end
-			                 print(">")
+											 print(">")
 		end,
 		attribute = function(name,value,nsURI,nsPrefix)
 			io.write('  ')
 			if nsPrefix then io.write(nsPrefix,":") end
-			                 io.write(name,'=',string.format('%q',value))
+											 io.write(name,'=',string.format('%q',value))
 			if nsURI    then io.write(" (ns='",nsURI,"')") end
 			io.write("\n")
 		end,
@@ -42,7 +42,7 @@ function SLAXML:parse(xml,options)
 	if not options then options = { stripWhitespace=false } end
 
 	-- Cache references for maximum speed
-	local find, sub, gsub, char, push, pop = string.find, string.sub, string.gsub, string.char, table.insert, table.remove
+	local find, sub, gsub, char, push, pop, concat = string.find, string.sub, string.gsub, string.char, table.insert, table.remove, table.concat
 	local first, last, match1, match2, match3, pos2, nsURI
 	local unpack = unpack or table.unpack
 	local pos = 1
@@ -52,11 +52,32 @@ function SLAXML:parse(xml,options)
 	local currentAttributes={}
 	local currentAttributeCt -- manually track length since the table is re-used
 	local nsStack = {}
+	local anyElement = false
 
 	local entityMap  = { ["lt"]="<", ["gt"]=">", ["amp"]="&", ["quot"]='"', ["apos"]="'" }
-	local entitySwap = function(orig,n,s) return entityMap[s] or n=="#" and char('0'..s) or orig end  
+	local utf8bits = { {0x7FF,{192,32},{128,64}}, {0xFFFF,{224,16},{128,64},{128,64}}, {0x1FFFFF,{240,8},{128,64},{128,64},{128,64}} }
+	function utf8(decimal) -- decode a code point to a utf8-encoded string
+		if decimal<=127 then
+			return char(decimal)
+		else
+			local charbytes = {}
+			for b,lim in ipairs(utf8bits) do
+				if decimal<=lim[1] then
+					for i=b+1,2,-1 do
+						local prefix,max = lim[i+1][1],lim[i+1][2]
+						local mod = decimal % max
+						charbytes[i] = char( prefix + mod )
+						decimal = ( decimal - mod ) / max
+					end
+					charbytes[1] = char( decimal + lim[2][1] )
+					break
+				end
+			end
+			return concat(charbytes)
+		end
+	end
+	local entitySwap = function(orig,n,s) return entityMap[s] or n=="#" and utf8(tonumber('0'..s)) or orig end  
 	local function unescape(str) return gsub( str, '(&(#?)([%d%a]+);)', entitySwap ) end
-	local anyElement = false
 
 	local function finishText()
 		if first>textStart and self._call.text then
diff --git a/test/files/utf8.xml b/test/files/utf8.xml
new file mode 100644
index 0000000..6c1402e
--- /dev/null
+++ b/test/files/utf8.xml
@@ -0,0 +1,6 @@
+<?xml version="1.0" encoding="utf-8"?>
+<root>
+	<s a="crêpes: €3">crêpes: €3</s>
+	<s a="cr&#234;pes: &#8364;3">cr&#234;pes: &#8364;3</s>
+	<s a="cr&#xea;pes: &#x20ac;3">cr&#xea;pes: &#x20ac;3</s>
+</root>
\ No newline at end of file
diff --git a/test/test.lua b/test/test.lua
index a74f26d..0d07b89 100644
--- a/test/test.lua
+++ b/test/test.lua
@@ -260,4 +260,12 @@ function test_whitespace()
 	assertEqual(a.kids[2].value,"\nIt's a [raw][[raw]] >\nstring that <do/> not care\n	about honey badgers.\n\n  ")
 end
 
+function test_utf8()
+	local root = SLAXML:dom(XML['utf8'],{stripWhitespace=true}).root
+	for _,s in ipairs(root.kids) do
+		assertEqual(s.attr.a,"crêpes: €3")
+		assertEqual(s.kids[1].value,"crêpes: €3")
+	end
+end
+
 runTests{ useANSI=false }
\ No newline at end of file