diff --git a/CHANGES.txt b/CHANGES.txt
new file mode 100644
index 000000000..5ecf9f05a
--- /dev/null
+++ b/CHANGES.txt
@@ -0,0 +1,20 @@
+Apptools CHANGELOG
+==================
+
+Change summary since 4.2.0
+~~~~~~~~~~~~~~~~~~~~~~~~~~
+
+Enhancements
+
+ * Apptools now have a changelog!
+ * Preferences system defaults to utf-8 encoded string with ConfigObj providing
+   better support for unicode in the PreferenceHelper (#41).
+
+Changes
+
+ * 
+
+Fixes
+
+ * 
+
diff --git a/apptools/preferences/preferences.py b/apptools/preferences/preferences.py
index 5c76649d2..9a64d6ebc 100644
--- a/apptools/preferences/preferences.py
+++ b/apptools/preferences/preferences.py
@@ -362,7 +362,7 @@ def load(self, file_or_filename=None):
         # use a different persistence mechanism).
         from configobj import ConfigObj
 
-        config_obj = ConfigObj(file_or_filename)
+        config_obj = ConfigObj(file_or_filename, encoding='utf-8')
 
         # 'name' is the section name, 'value' is a dictionary containing the
         # name/value pairs in the section (the actual preferences ;^).
@@ -398,7 +398,7 @@ def save(self, file_or_filename=None):
 
             logger.debug('saving preferences to <%s>', file_or_filename)
 
-            config_obj = ConfigObj(file_or_filename)
+            config_obj = ConfigObj(file_or_filename, encoding='utf-8')
             self._add_node_to_dictionary(self, config_obj)
             config_obj.write()
 
@@ -542,9 +542,6 @@ def _remove_preferences_listener(self, listener):
     def _set(self, key, value):
         """ Set the value of a preference in this node. """
 
-        # Preferences are *always* stored as strings.
-        value = str(value)
-
         self._lk.acquire()
         old = self._preferences.get(key)
         self._preferences[key] = value
diff --git a/apptools/preferences/preferences_helper.py b/apptools/preferences/preferences_helper.py
index 9b4770e65..227bac943 100644
--- a/apptools/preferences/preferences_helper.py
+++ b/apptools/preferences/preferences_helper.py
@@ -132,9 +132,10 @@ def _get_value(self, trait_name, value):
         if isinstance(handler, Str) or trait.is_str:
             pass
 
-        # If the trait type is 'Unicode' then we convert the raw value.
         elif isinstance(handler, Unicode):
-            value = unicode(value)
+            # Just in case we get back an ASCII `str` object, convert it to a
+            # `unicode` object.     
+            value = unicode(value) 
 
         # Otherwise, we eval it!
         else:
diff --git a/apptools/preferences/tests/preferences_helper_test_case.py b/apptools/preferences/tests/preferences_helper_test_case.py
index eeb1a31fb..305a7a47d 100644
--- a/apptools/preferences/tests/preferences_helper_test_case.py
+++ b/apptools/preferences/tests/preferences_helper_test_case.py
@@ -200,6 +200,49 @@ class AcmeUIPreferencesHelper(PreferencesHelper):
 
         return
 
+    def test_real_unicode_values(self):
+        """ default values """
+
+        p = self.preferences
+        p.load(self.example)
+
+        class AcmeUIPreferencesHelper(PreferencesHelper):
+            """ A helper! """
+
+            # The path to the preferences node that contains our preferences.
+            preferences_path = 'acme.ui'
+
+            # The traits that we want to initialize from preferences.
+            bgcolor     = Str('blue')
+            width       = Int(50)
+            ratio       = Float(1.0)
+            visible     = Bool(True)
+            description = Unicode(u'U\xdc\xf2ser')
+            offsets     = List(Int, [1, 2, 3, 4])
+            names       = List(Str, ['joe', 'fred', 'jane'])
+
+        helper = AcmeUIPreferencesHelper()
+
+        original_description = helper.description
+        helper.description = u'U\xdc\xf2ser'
+        self.assertEqual(u'U\xdc\xf2ser', helper.description)
+
+
+        helper.description = u'caf\xe9'
+        self.assertEqual(u'caf\xe9', helper.description)
+        self.assertEqual(u'caf\xe9', p.get('acme.ui.description'))
+
+        p.save(self.example)
+
+        p.load(self.example)
+        self.assertEqual(u'caf\xe9', p.get('acme.ui.description'))
+        self.assertEqual(u'True', p.get('acme.ui.visible'))
+        self.assertEqual(True, helper.visible)
+
+        # reset the original description and save the example file
+        helper.description = original_description
+        p.save(self.example)
+
     def test_no_preferences_path(self):
         """ no preferences path """
 
@@ -453,11 +496,11 @@ def _width_changed(self, trait_name, old, new):
         # ratio to get set via the static trait change handler on the helper.
         p.set('acme.ui.width', 42)
         self.assertEqual(42, helper.width)
-        self.assertEqual('42', p.get('acme.ui.width'))
+        self.assertEqual(42, p.get('acme.ui.width'))
 
         # Did the ratio get changed?
         self.assertEqual(3.0, helper.ratio)
-        self.assertEqual('3.0', p.get('acme.ui.ratio'))
+        self.assertEqual(3.0, p.get('acme.ui.ratio'))
 
         return