diff --git a/dbdimp.c b/dbdimp.c
index fe99dfd..3c73d54 100644
--- a/dbdimp.c
+++ b/dbdimp.c
@@ -645,11 +645,12 @@ sqlite_db_last_insert_id(SV *dbh, imp_dbh_t *imp_dbh, SV *catalog, SV *schema, S
 }
 
 int
-sqlite_st_prepare(SV *sth, imp_sth_t *imp_sth, char *statement, SV *attribs)
+sqlite_st_prepare_sv(SV *sth, imp_sth_t *imp_sth, SV *sv_statement, SV *attribs)
 {
     dTHX;
     int rc = 0;
     const char *extra;
+    char *statement;
     D_imp_dbh_from_sth;
 
     last_prepared_dbh = imp_dbh;
@@ -659,6 +660,13 @@ sqlite_st_prepare(SV *sth, imp_sth_t *imp_sth, char *statement, SV *attribs)
         return FALSE; /* -> undef in lib/DBD/SQLite.pm */
     }
 
+    /* sqlite3_prepare wants an utf8-encoded SQL statement */
+    if (imp_dbh->unicode) {
+        sv_utf8_upgrade(sv_statement);
+    }
+
+    statement = SvPV_nolen(sv_statement);
+
 #if 0
     if (*statement == '\0') {
         sqlite_error(sth, -2, "attempt to prepare empty statement");
diff --git a/dbdimp.h b/dbdimp.h
index bf6588a..2f8c5d3 100644
--- a/dbdimp.h
+++ b/dbdimp.h
@@ -64,7 +64,7 @@ struct imp_sth_st {
 #define dbd_db_STORE_attrib     sqlite_db_STORE_attrib
 #define dbd_db_FETCH_attrib     sqlite_db_FETCH_attrib
 #define dbd_db_last_insert_id   sqlite_db_last_insert_id
-#define dbd_st_prepare          sqlite_st_prepare
+#define dbd_st_prepare_sv       sqlite_st_prepare_sv
 #define dbd_st_rows             sqlite_st_rows
 #define dbd_st_execute          sqlite_st_execute
 #define dbd_st_fetch            sqlite_st_fetch
diff --git a/t/rt_96877_unicode_statements.t b/t/rt_96877_unicode_statements.t
new file mode 100644
index 0000000..d72ff55
--- /dev/null
+++ b/t/rt_96877_unicode_statements.t
@@ -0,0 +1,40 @@
+#!/usr/bin/perl
+# According to the sqlite doc, the SQL argument to sqlite3_prepare_v2
+# should be in utf8, but DBD::SQLite does not ensure this (even with
+# sqlite_unicode => 1). Only bind values are properly converted.
+
+use strict;
+BEGIN {
+	$|  = 1;
+	$^W = 1;
+}
+
+use t::lib::Test;
+use Test::More;
+BEGIN {
+	if ( $] >= 5.008005 ) {
+		plan( tests => 16 );
+	} else {
+		plan( skip_all => 'Unicode is not supported before 5.8.5' );
+	}
+}
+use Test::NoWarnings;
+
+my $dbh = connect_ok( sqlite_unicode => 1 );
+is( $dbh->{sqlite_unicode}, 1, 'Unicode is on' );
+
+ok( $dbh->do(<<'END_SQL'), 'CREATE TABLE' );
+CREATE TABLE foo (
+	bar varchar(255)
+)
+END_SQL
+
+foreach ( "A", "\xe9", "\x{20ac}" ) {
+	diag sprintf "testing \\x{%x}", ord($_);
+	ok( $dbh->do("INSERT INTO foo VALUES ( ? )", {}, $_), 'INSERT with bind' );
+	ok( $dbh->do("INSERT INTO foo VALUES ( '$_' )"),      'INSERT without bind' );
+	my $vals = $dbh->selectcol_arrayref("SELECT bar FROM foo");
+        is $vals->[0], $vals->[1], "both values are equal";
+
+	ok( $dbh->do("DELETE FROM foo"), 'DELETE ok' );
+}