diff --git a/lib/adapters/xhr.js b/lib/adapters/xhr.js
index bf90efd..5db1d1e 100644
--- a/lib/adapters/xhr.js
+++ b/lib/adapters/xhr.js
@@ -23,7 +23,7 @@ module.exports = function xhrAdapter(config) {
     // HTTP basic authentication
     if (config.auth) {
       var username = config.auth.username || '';
-      var password = config.auth.password || '';
+      var password = unescape(encodeURIComponent(config.auth.password)) || '';
       requestHeaders.Authorization = 'Basic ' + btoa(username + ':' + password);
     }
 
diff --git a/test/specs/__helpers.js b/test/specs/__helpers.js
index efb4fc6..660ae09 100644
--- a/test/specs/__helpers.js
+++ b/test/specs/__helpers.js
@@ -76,7 +76,24 @@ setupBasicAuthTest = function setupBasicAuthTest() {
     }, 100);
   });
 
-  it('should fail to encode HTTP Basic auth credentials with non-Latin1 characters', function (done) {
+  it('should accept HTTP Basic auth credentials with non-Latin1 characters in password', function (done) {
+    axios('/foo', {
+      auth: {
+        username: 'Aladdin',
+        password: 'open ßç£☃sesame'
+      }
+    });
+
+    setTimeout(function () {
+      var request = jasmine.Ajax.requests.mostRecent();
+      console.log(request.requestHeaders['Authorization'], '\n\n\n');
+
+      expect(request.requestHeaders['Authorization']).toEqual('Basic QWxhZGRpbjpvcGVuIMOfw6fCo+KYg3Nlc2FtZQ==');
+      done();
+    }, 100);
+  });
+
+  it('should fail to encode HTTP Basic auth credentials with non-Latin1 characters in username', function (done) {
     axios('/foo', {
       auth: {
         username: 'Aladßç£☃din',