diff --git a/scripts/qapi.py b/scripts/qapi.py
index 3c8ce45..14468ba 100644
--- a/scripts/qapi.py
+++ b/scripts/qapi.py
@@ -173,7 +173,41 @@ class QAPISchema:
                         raise QAPISchemaError(self,
                                               'Missing terminating "\'"')
                     if esc:
-                        string += ch
+                        if ch == 'b':
+                            string += '\b'
+                        elif ch == 'f':
+                            string += '\f'
+                        elif ch == 'n':
+                            string += '\n'
+                        elif ch == 'r':
+                            string += '\r'
+                        elif ch == 't':
+                            string += '\t'
+                        elif ch == 'u':
+                            value = 0
+                            for x in range(0, 4):
+                                ch = self.src[self.cursor]
+                                self.cursor += 1
+                                if ch not in "0123456789abcdefABCDEF":
+                                    raise QAPISchemaError(self,
+                                                          '\\u escape needs 4 '
+                                                          'hex digits')
+                                value = (value << 4) + int(ch, 16)
+                            # If Python 2 and 3 didn't disagree so much on
+                            # how to handle Unicode, then we could allow
+                            # Unicode string defaults.  But most of QAPI is
+                            # ASCII-only, so we aren't losing much for now.
+                            if not value or value > 0x7f:
+                                raise QAPISchemaError(self,
+                                                      'For now, \\u escape '
+                                                      'only supports non-zero '
+                                                      'values up to \\u007f')
+                            string += chr(value)
+                        elif ch in "\\/'\"":
+                            string += ch
+                        else:
+                            raise QAPISchemaError(self,
+                                                  "Unknown escape \\%s" %ch)
                         esc = False
                     elif ch == "\\":
                         esc = True
diff --git a/tests/Makefile b/tests/Makefile
index e2a3bd3..547a249 100644
--- a/tests/Makefile
+++ b/tests/Makefile
@@ -212,6 +212,8 @@ check-qapi-schema-y := $(addprefix tests/qapi-schema/, \
 	enum-clash-member.json enum-max-member.json enum-union-clash.json \
 	enum-bad-name.json funny-char.json indented-expr.json \
 	missing-type.json bad-ident.json ident-with-escape.json \
+	escape-outside-string.json unknown-escape.json \
+	escape-too-short.json escape-too-big.json unicode-str.json \
 	double-type.json bad-base.json bad-type-bool.json bad-type-int.json \
 	bad-type-dict.json double-data.json unknown-expr-key.json \
 	redefined-type.json redefined-command.json redefined-builtin.json \
diff --git a/tests/qapi-schema/escape-outside-string.err b/tests/qapi-schema/escape-outside-string.err
new file mode 100644
index 0000000..b9b8837
--- /dev/null
+++ b/tests/qapi-schema/escape-outside-string.err
@@ -0,0 +1 @@
+tests/qapi-schema/escape-outside-string.json:3:27: Stray "\"
diff --git a/tests/qapi-schema/escape-outside-string.exit b/tests/qapi-schema/escape-outside-string.exit
new file mode 100644
index 0000000..d00491f
--- /dev/null
+++ b/tests/qapi-schema/escape-outside-string.exit
@@ -0,0 +1 @@
+1
diff --git a/tests/qapi-schema/escape-outside-string.json b/tests/qapi-schema/escape-outside-string.json
new file mode 100644
index 0000000..482f795
--- /dev/null
+++ b/tests/qapi-schema/escape-outside-string.json
@@ -0,0 +1,3 @@
+# escape sequences are permitted only inside strings
+# { 'command': 'foo', 'data': {} }
+{ 'command': 'foo', 'data'\u003a{} }
diff --git a/tests/qapi-schema/escape-outside-string.out b/tests/qapi-schema/escape-outside-string.out
new file mode 100644
index 0000000..e69de29
diff --git a/tests/qapi-schema/escape-too-big.err b/tests/qapi-schema/escape-too-big.err
new file mode 100644
index 0000000..d9aeb5d
--- /dev/null
+++ b/tests/qapi-schema/escape-too-big.err
@@ -0,0 +1 @@
+tests/qapi-schema/escape-too-big.json:3:14: For now, \u escape only supports non-zero values up to \u007f
diff --git a/tests/qapi-schema/escape-too-big.exit b/tests/qapi-schema/escape-too-big.exit
new file mode 100644
index 0000000..d00491f
--- /dev/null
+++ b/tests/qapi-schema/escape-too-big.exit
@@ -0,0 +1 @@
+1
diff --git a/tests/qapi-schema/escape-too-big.json b/tests/qapi-schema/escape-too-big.json
new file mode 100644
index 0000000..62bcecd
--- /dev/null
+++ b/tests/qapi-schema/escape-too-big.json
@@ -0,0 +1,3 @@
+# we don't support full Unicode strings, yet
+# { 'command': 'é' }
+{ 'command': '\u00e9' }
diff --git a/tests/qapi-schema/escape-too-big.out b/tests/qapi-schema/escape-too-big.out
new file mode 100644
index 0000000..e69de29
diff --git a/tests/qapi-schema/escape-too-short.err b/tests/qapi-schema/escape-too-short.err
new file mode 100644
index 0000000..934de59
--- /dev/null
+++ b/tests/qapi-schema/escape-too-short.err
@@ -0,0 +1 @@
+tests/qapi-schema/escape-too-short.json:3:14: \u escape needs 4 hex digits
diff --git a/tests/qapi-schema/escape-too-short.exit b/tests/qapi-schema/escape-too-short.exit
new file mode 100644
index 0000000..d00491f
--- /dev/null
+++ b/tests/qapi-schema/escape-too-short.exit
@@ -0,0 +1 @@
+1
diff --git a/tests/qapi-schema/escape-too-short.json b/tests/qapi-schema/escape-too-short.json
new file mode 100644
index 0000000..6cb1dec
--- /dev/null
+++ b/tests/qapi-schema/escape-too-short.json
@@ -0,0 +1,3 @@
+# the \u escape requires 4 hex digits
+# { 'command': 'a' }
+{ 'command': '\u61' }
diff --git a/tests/qapi-schema/escape-too-short.out b/tests/qapi-schema/escape-too-short.out
new file mode 100644
index 0000000..e69de29
diff --git a/tests/qapi-schema/ident-with-escape.err b/tests/qapi-schema/ident-with-escape.err
index f7d1c55..e69de29 100644
--- a/tests/qapi-schema/ident-with-escape.err
+++ b/tests/qapi-schema/ident-with-escape.err
@@ -1 +0,0 @@
-tests/qapi-schema/ident-with-escape.json:3: Expression is missing metatype
diff --git a/tests/qapi-schema/ident-with-escape.exit b/tests/qapi-schema/ident-with-escape.exit
index d00491f..573541a 100644
--- a/tests/qapi-schema/ident-with-escape.exit
+++ b/tests/qapi-schema/ident-with-escape.exit
@@ -1 +1 @@
-1
+0
diff --git a/tests/qapi-schema/ident-with-escape.json b/tests/qapi-schema/ident-with-escape.json
index cfb2050..5661750 100644
--- a/tests/qapi-schema/ident-with-escape.json
+++ b/tests/qapi-schema/ident-with-escape.json
@@ -1,4 +1,4 @@
-# FIXME: we should allow escape sequences in strings, if they map back to ASCII
+# we allow escape sequences in strings, if they map back to ASCII
 # { 'command': 'fooA', 'data': { 'bar1': 'str' } }
 { 'c\u006fmmand': '\u0066\u006f\u006FA',
   'd\u0061ta': { '\u0062\u0061\u00721': '\u0073\u0074\u0072' } }
diff --git a/tests/qapi-schema/ident-with-escape.out b/tests/qapi-schema/ident-with-escape.out
index e69de29..4028430 100644
--- a/tests/qapi-schema/ident-with-escape.out
+++ b/tests/qapi-schema/ident-with-escape.out
@@ -0,0 +1,3 @@
+[OrderedDict([('command', 'fooA'), ('data', OrderedDict([('bar1', 'str')]))])]
+[]
+[]
diff --git a/tests/qapi-schema/unicode-str.err b/tests/qapi-schema/unicode-str.err
new file mode 100644
index 0000000..f621cd6
--- /dev/null
+++ b/tests/qapi-schema/unicode-str.err
@@ -0,0 +1 @@
+tests/qapi-schema/unicode-str.json:2: 'command' uses invalid name 'é'
diff --git a/tests/qapi-schema/unicode-str.exit b/tests/qapi-schema/unicode-str.exit
new file mode 100644
index 0000000..d00491f
--- /dev/null
+++ b/tests/qapi-schema/unicode-str.exit
@@ -0,0 +1 @@
+1
diff --git a/tests/qapi-schema/unicode-str.json b/tests/qapi-schema/unicode-str.json
new file mode 100644
index 0000000..5253a1b
--- /dev/null
+++ b/tests/qapi-schema/unicode-str.json
@@ -0,0 +1,2 @@
+# we don't support full Unicode strings, yet
+{ 'command': 'é' }
diff --git a/tests/qapi-schema/unicode-str.out b/tests/qapi-schema/unicode-str.out
new file mode 100644
index 0000000..e69de29
diff --git a/tests/qapi-schema/unknown-escape.err b/tests/qapi-schema/unknown-escape.err
new file mode 100644
index 0000000..000e30d
--- /dev/null
+++ b/tests/qapi-schema/unknown-escape.err
@@ -0,0 +1 @@
+tests/qapi-schema/unknown-escape.json:3:21: Unknown escape \x
diff --git a/tests/qapi-schema/unknown-escape.exit b/tests/qapi-schema/unknown-escape.exit
new file mode 100644
index 0000000..d00491f
--- /dev/null
+++ b/tests/qapi-schema/unknown-escape.exit
@@ -0,0 +1 @@
+1
diff --git a/tests/qapi-schema/unknown-escape.json b/tests/qapi-schema/unknown-escape.json
new file mode 100644
index 0000000..8e6891e
--- /dev/null
+++ b/tests/qapi-schema/unknown-escape.json
@@ -0,0 +1,3 @@
+# we only recognize JSON escape sequences, plus our \' extension (no \x)
+# { 'command': 'foo', 'data': {} }
+{ 'command': 'foo', 'dat\x61':{} }
