diff --git a/lib/execjs/external_runtime.rb b/lib/execjs/external_runtime.rb
index 99f359c..850fa4f 100644
--- a/lib/execjs/external_runtime.rb
+++ b/lib/execjs/external_runtime.rb
@@ -5,11 +5,11 @@ module ExecJS
     class Context
       def initialize(runtime, source = "")
         @runtime = runtime
-        @source  = source
+        @source  = source.respond_to?(:encode) ? source.encode("UTF-8") : source
       end
 
       def eval(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           exec("return eval(#{MultiJson.encode("(#{source})")})")
@@ -17,7 +17,7 @@ module ExecJS
       end
 
       def exec(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         compile_to_tempfile([@source, source].join("\n")) do |file|
           extract_result(@runtime.send(:exec_runtime, file.path))
diff --git a/lib/execjs/mustang_runtime.rb b/lib/execjs/mustang_runtime.rb
index f02a244..f6b8f86 100644
--- a/lib/execjs/mustang_runtime.rb
+++ b/lib/execjs/mustang_runtime.rb
@@ -7,7 +7,7 @@ module ExecJS
       end
 
       def exec(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           eval "(function(){#{source}})()", options
@@ -15,7 +15,7 @@ module ExecJS
       end
 
       def eval(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           unbox @v8_context.eval("(#{source})")
diff --git a/lib/execjs/ruby_racer_runtime.rb b/lib/execjs/ruby_racer_runtime.rb
index d026db7..db5582e 100644
--- a/lib/execjs/ruby_racer_runtime.rb
+++ b/lib/execjs/ruby_racer_runtime.rb
@@ -7,7 +7,7 @@ module ExecJS
       end
 
       def exec(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           eval "(function(){#{source}})()", options
@@ -15,7 +15,7 @@ module ExecJS
       end
 
       def eval(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           unbox @v8_context.eval("(#{source})")
diff --git a/lib/execjs/ruby_rhino_runtime.rb b/lib/execjs/ruby_rhino_runtime.rb
index 2b90998..0c5aa24 100644
--- a/lib/execjs/ruby_rhino_runtime.rb
+++ b/lib/execjs/ruby_rhino_runtime.rb
@@ -7,7 +7,7 @@ module ExecJS
       end
 
       def exec(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           eval "(function(){#{source}})()", options
@@ -15,7 +15,7 @@ module ExecJS
       end
 
       def eval(source, options = {})
-        souce = source.encode('UTF-8') if source.respond_to?(:encode)
+        source = source.encode('UTF-8') if source.respond_to?(:encode)
 
         if /\S/ =~ source
           unbox @rhino_context.eval("(#{source})")
diff --git a/test/test_runtime.rb b/test/test_runtime.rb
index a983444..fa4052c 100644
--- a/test/test_runtime.rb
+++ b/test/test_runtime.rb
@@ -53,6 +53,25 @@ class TestRuntime < Test::Unit::TestCase
         @runtime.eval(binary)
       end
     end
+
+    def test_encoding_compile
+      utf8 = Encoding.find('UTF-8')
+
+      context = @runtime.compile("foo = function(v) { return '¶' + v; }".encode("ISO8859-15"))
+
+      assert_equal utf8, context.exec("return foo('hello')").encoding
+      assert_equal utf8, context.eval("foo('☃')").encoding
+
+      ascii = "foo('hello')".encode('US-ASCII')
+      result = context.eval(ascii)
+      assert_equal "¶hello", result
+      assert_equal utf8, result.encoding
+
+      assert_raise Encoding::UndefinedConversionError do
+        binary = "\xde\xad\xbe\xef".force_encoding("BINARY")
+        @runtime.eval(binary)
+      end
+    end
   end
 
   def test_compile