diff --git a/Lib/idlelib/PyShell.py b/Lib/idlelib/PyShell.py
index 17ca0ef..8ee0c0e 100755
--- a/Lib/idlelib/PyShell.py
+++ b/Lib/idlelib/PyShell.py
@@ -34,6 +34,7 @@
 from idlelib import Debugger
 from idlelib import RemoteDebugger
 from idlelib import macosxSupport
+from idlelib import IOBinding
 
 IDENTCHARS = string.ascii_letters + string.digits + "_"
 HOST = '127.0.0.1' # python execution server on localhost loopback
@@ -668,10 +669,11 @@
         self.more = 0
         self.save_warnings_filters = warnings.filters[:]
         warnings.filterwarnings(action="error", category=SyntaxWarning)
-        if isinstance(source, unicode):
-            from idlelib import IOBinding
+        if isinstance(source, unicode) and IOBinding.encoding != 'utf-8':
             try:
-                source = source.encode(IOBinding.encoding)
+                source = '# -*- coding: %s -*-\n%s' % (
+                        IOBinding.encoding,
+                        source.encode(IOBinding.encoding))
             except UnicodeError:
                 self.tkconsole.resetoutput()
                 self.write("Unsupported characters in input\n")
diff --git a/Lib/idlelib/run.py b/Lib/idlelib/run.py
index 6ffc1b9..d023e28 100644
--- a/Lib/idlelib/run.py
+++ b/Lib/idlelib/run.py
@@ -210,6 +210,8 @@
         fn, ln, nm, line = tb[i]
         if nm == '?':
             nm = "-toplevel-"
+        if fn.startswith("<pyshell#") and IOBinding.encoding != 'utf-8':
+            ln -= 1  # correction for coding cookie
         if not line and fn.startswith("<pyshell#"):
             line = rpchandler.remotecall('linecache', 'getline',
                                               (fn, ln), {})
diff --git a/Misc/NEWS b/Misc/NEWS
index c30fd14..05d609d 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -25,6 +25,12 @@
 
 - Issue #24134: Reverted issue #24134 changes.
 
+IDLE
+----
+
+- Issue #15809: IDLE shell now uses locale encoding instead of Latin1 for
+  decoding unicode literals.
+
 
 What's New in Python 2.7.10 release candidate 1?
 ================================================