diff --git a/lib/DBD/SQLite.pm b/lib/DBD/SQLite.pm
index 759efdd..87ca909 100644
--- a/lib/DBD/SQLite.pm
+++ b/lib/DBD/SQLite.pm
@@ -196,6 +196,9 @@ sub prepare {
     my $sql = shift;
     $sql = '' unless defined $sql;
 
+    # sqlite3_prepare wants an utf8-encoded SQL statement
+    utf8::upgrade($sql);
+
     my $sth = DBI::_new_sth( $dbh, {
         Statement => $sql,
     } );
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' );
+}