diff --git a/Lib/codecs.py b/Lib/codecs.py
index 557ccf7..a67240a 100644
--- a/Lib/codecs.py
+++ b/Lib/codecs.py
@@ -858,10 +858,15 @@
         parameter.
 
     """
-    if encoding is not None and \
-       'b' not in mode:
-        # Force opening of the file in binary mode
-        mode = mode + 'b'
+    if encoding is not None:
+        if 'U' in mode:
+            # No automatic conversion of '\n' is done on reading and writing
+            mode = mode.strip().replace('U', '')
+            if mode[:1] not in set('rwa'):
+                mode = 'r' + mode
+        if 'b' not in mode:
+            # Force opening of the file in binary mode
+            mode = mode + 'b'
     file = __builtin__.open(filename, mode, buffering)
     if encoding is None:
         return file
diff --git a/Lib/test/test_codecs.py b/Lib/test/test_codecs.py
index 175f92b..8caf018 100644
--- a/Lib/test/test_codecs.py
+++ b/Lib/test/test_codecs.py
@@ -437,6 +437,21 @@
     def test_errors(self):
         self.assertRaises(UnicodeDecodeError, codecs.utf_16_decode, "\xff", "strict", True)
 
+    def test_bug691291(self):
+        # Files are always opened in binary mode, even if no binary mode was
+        # specified.  This means that no automatic conversion of '\n' is done
+        # on reading and writing.
+        s1 = u'Hello\r\nworld\r\n'
+
+        s = s1.encode(self.encoding)
+        try:
+            with open(test_support.TESTFN, 'wb') as fp:
+                fp.write(s)
+            with codecs.open(test_support.TESTFN, 'U', encoding=self.encoding) as reader:
+                self.assertEqual(reader.read(), s1)
+        finally:
+            test_support.unlink(test_support.TESTFN)
+
 class UTF16LETest(ReadTest):
     encoding = "utf-16-le"