diff --git a/Lib/test/test_xml_etree.py b/Lib/test/test_xml_etree.py
index 2ccb77a..8cdd4ee 100644
--- a/Lib/test/test_xml_etree.py
+++ b/Lib/test/test_xml_etree.py
@@ -213,6 +213,23 @@
     """
     ET.XML("<?xml version='1.0' encoding='%s'?><xml />" % encoding)
 
+def processinginstruction():
+    """
+    Test ProcessingInstruction directly
+
+    >>> from xml.etree import ElementTree as ET
+
+    >>> ET.tostring(ET.ProcessingInstruction('test', 'instruction'))
+    '<?test instruction?>'
+    >>> ET.tostring(ET.PI('test', 'instruction'))
+    '<?test instruction?>'
+
+    Issue #2746
+
+    >>> ET.tostring(ET.PI('test', '<testing&>'))
+    '<?test <testing&>?>'
+
+    """
 
 #
 # xinclude tests (samples from appendix C of the xinclude specification)
diff --git a/Lib/xml/etree/ElementTree.py b/Lib/xml/etree/ElementTree.py
index 7dbc72e..e5afcbc 100644
--- a/Lib/xml/etree/ElementTree.py
+++ b/Lib/xml/etree/ElementTree.py
@@ -666,9 +666,9 @@
         # write XML to file
         tag = node.tag
         if tag is Comment:
-            file.write("<!-- %s -->" % _escape_cdata(node.text, encoding))
+            file.write("<!-- %s -->" % _encode(node.text, encoding))
         elif tag is ProcessingInstruction:
-            file.write("<?%s?>" % _escape_cdata(node.text, encoding))
+            file.write("<?%s?>" % _encode(node.text, encoding))
         else:
             items = node.items()
             xmlns_items = [] # new namespaces in this scope
diff --git a/Misc/ACKS b/Misc/ACKS
index 089e463..0ce586e 100644
--- a/Misc/ACKS
+++ b/Misc/ACKS
@@ -525,6 +525,7 @@
 Sjoerd Mullender
 Sape Mullender
 Michael Muller
+Neil Muller
 R. David Murray
 Piotr Meyer
 John Nagle
diff --git a/Misc/NEWS b/Misc/NEWS
index 1a752fc..0300b4f 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -78,6 +78,11 @@
 Library
 -------
 
+- Issue #2746: Don't escape ampersands and angle brackets ("&", "<", ">")
+  in XML processing instructions and comments.  These raw characters are
+  allowed by the XML specification, and are necessary when outputting e.g.
+  PHP code in a processing instruction.  Patch by Neil Muller.
+
 - Issue #7869: logging: improved diagnostic for format-time errors.
 
 - Issue #7868: logging: added loggerClass attribute to Manager.