diff --git a/Lib/compiler/ast.py b/Lib/compiler/ast.py
index bc283c0..4794d66 100644
--- a/Lib/compiler/ast.py
+++ b/Lib/compiler/ast.py
@@ -267,6 +267,20 @@
     def __repr__(self):
         return "Break()"
 
+class Bytes(Node):
+    def __init__(self, value, lineno=None):
+        self.value = value
+        self.lineno = lineno
+
+    def getChildren(self):
+        return self.value,
+
+    def getChildNodes(self):
+        return ()
+
+    def __repr__(self):
+        return "Bytes(%s)" % (repr(self.value),)
+
 class CallFunc(Node):
     def __init__(self, node, args, star_args = None, dstar_args = None, lineno=None):
         self.node = node
diff --git a/Lib/compiler/pyassem.py b/Lib/compiler/pyassem.py
index cac899d..f665c54 100644
--- a/Lib/compiler/pyassem.py
+++ b/Lib/compiler/pyassem.py
@@ -792,6 +792,7 @@
         'DELETE_ATTR': -1,
         'STORE_GLOBAL': -1,
         'BUILD_MAP': 1,
+        'MAKE_BYTES': 0,
         'COMPARE_OP': -1,
         'STORE_FAST': -1,
         'IMPORT_STAR': -1,
diff --git a/Lib/compiler/pycodegen.py b/Lib/compiler/pycodegen.py
index 8db4e0d..83fbc17 100644
--- a/Lib/compiler/pycodegen.py
+++ b/Lib/compiler/pycodegen.py
@@ -930,6 +930,10 @@
 
     def visitConst(self, node):
         self.emit('LOAD_CONST', node.value)
+    
+    def visitBytes(self, node):
+        self.emit('LOAD_CONST', node.value)
+        self.emit('MAKE_BYTES')
 
     def visitKeyword(self, node):
         self.emit('LOAD_CONST', node.name)
diff --git a/Lib/compiler/transformer.py b/Lib/compiler/transformer.py
index 5f2face..79b702c 100644
--- a/Lib/compiler/transformer.py
+++ b/Lib/compiler/transformer.py
@@ -745,9 +745,11 @@
             return eval(lit)
 
     def atom_string(self, nodelist):
-        k = ''
-        for node in nodelist:
+        k = self.decode_literal(nodelist[0][1])
+        for node in nodelist[1:]:
             k += self.decode_literal(node[1])
+        if isinstance(k, bytes):
+          return Bytes(str(k), lineno=nodelist[0][2])
         return Const(k, lineno=nodelist[0][2])
 
     def atom_ellipsis(self, nodelist):
diff --git a/Lib/opcode.py b/Lib/opcode.py
index 1e15582..69982f2 100644
--- a/Lib/opcode.py
+++ b/Lib/opcode.py
@@ -111,6 +111,7 @@
 def_op('LOAD_LOCALS', 82)
 def_op('RETURN_VALUE', 83)
 def_op('IMPORT_STAR', 84)
+def_op('MAKE_BYTES', 85)
 def_op('YIELD_VALUE', 86)
 def_op('POP_BLOCK', 87)
 def_op('END_FINALLY', 88)
diff --git a/Lib/test/test_bytes.py b/Lib/test/test_bytes.py
index 997122b..4dee01b 100644
--- a/Lib/test/test_bytes.py
+++ b/Lib/test/test_bytes.py
@@ -403,7 +403,19 @@
             self.assertEqual(bytes.join(tuple(lst)), bytes("abc"))
             self.assertEqual(bytes.join(iter(lst)), bytes("abc"))
         # XXX more...
-            
+
+    def test_literal(self):
+        tests =  [
+            (b"Wonderful spam", u"Wonderful spam"),
+            (br"Wonderful spam too", u"Wonderful spam too"),
+            (b"\xaa\x00\000\200", u"\xaa\x00\000\200"),
+            (br"\xaa\x00\000\200", ur"\xaa\x00\000\200"),
+        ]
+        for b, s in tests:
+            self.assertEqual(b, bytes(s, 'latin-1'))
+        for c in range(128, 256):
+            self.assertRaises(SyntaxError, eval,
+                              'b"%s"' % chr(c))
 
     # Optimizations:
     # __iter__? (optimization)
diff --git a/Lib/test/test_compiler.py b/Lib/test/test_compiler.py
index ab9a660..bbd7511 100644
--- a/Lib/test/test_compiler.py
+++ b/Lib/test/test_compiler.py
@@ -187,6 +187,30 @@
         exec(c, dct)
         self.assertEquals(dct.get('result'), 1)
 
+    def testBytesLiteral(self):
+        c = compiler.compile("b'foo'", '<string>', 'eval')
+        b = eval(c)
+        
+        c = compiler.compile('def f(b=b"foo"):\n'
+                             '    b[0] += 1\n'
+                             '    return b\n'
+                             'f(); f(); result = f()\n',
+                             '<string>',
+                             'exec')
+        dct = {}
+        exec(c, dct)
+        self.assertEquals(dct.get('result'), b"ioo")
+        
+        c = compiler.compile('def f():\n'
+                             '    b = b"foo"\n'
+                             '    b[0] += 1\n'
+                             '    return b\n'
+                             'f(); f(); result = f()\n',
+                             '<string>',
+                             'exec')
+        dct = {}
+        exec(c, dct)
+        self.assertEquals(dct.get('result'), b"goo")
 
 NOLINENO = (compiler.ast.Module, compiler.ast.Stmt, compiler.ast.Discard)