diff --git a/src/GF/Compile.hs b/src/GF/Compile.hs
index 92a956d5f..5d5081541 100644
--- a/src/GF/Compile.hs
+++ b/src/GF/Compile.hs
@@ -208,7 +208,7 @@ compileSourceModule opts env@(k,gr,_) mo@(i,mi) = do
 generateModuleCode :: Options -> FilePath -> SourceModule -> IOE SourceModule
 generateModuleCode opts file minfo = do
   let minfo1 = subexpModule minfo
-      out    = prGrammar (MGrammar [codeSourceModule encodeUTF8 minfo1])
+      out    = codeStringLiterals encodeUTF8 $ prGrammar (MGrammar [minfo1])
   putPointE Normal opts ("  wrote file" +++ file) $ ioeIO $ writeFile file $ out
   return minfo1
 
diff --git a/src/GF/Compile/Coding.hs b/src/GF/Compile/Coding.hs
index a226265c5..704e95201 100644
--- a/src/GF/Compile/Coding.hs
+++ b/src/GF/Compile/Coding.hs
@@ -48,3 +48,13 @@ codeSourceModule co (id,moi) = case moi of
       PSeq p q -> PSeq (codp p) (codp q)
       PAlt p q -> PAlt (codp p) (codp q)
       _ -> p
+
+-- | Run an encoding function on all string literals within the given string.
+codeStringLiterals :: (String -> String) -> String -> String
+codeStringLiterals _ [] = []
+codeStringLiterals co ('"':cs) = '"' : inStringLiteral cs
+  where inStringLiteral [] = error "codeStringLiterals: unterminated string literal"
+        inStringLiteral ('"':ds) = '"' : codeStringLiterals co ds
+        inStringLiteral ('\\':d:ds) = '\\' : co [d] ++ inStringLiteral ds
+        inStringLiteral (d:ds) = co [d] ++ inStringLiteral ds
+codeStringLiterals co (c:cs) = c : codeStringLiterals co cs
diff --git a/src/GF/Infra/CompactPrint.hs b/src/GF/Infra/CompactPrint.hs
index ca2452de6..486c9e183 100644
--- a/src/GF/Infra/CompactPrint.hs
+++ b/src/GF/Infra/CompactPrint.hs
@@ -5,8 +5,7 @@ compactPrint = compactPrintCustom keywordGF (const False)
 
 compactPrintGFCC = compactPrintCustom (const False) keywordGFCC
 
--- FIXME: using words is not safe, since this is run on UTF-8 encoded data.
-compactPrintCustom pre post = id -- dps . concat . map (spaceIf pre post) . words 
+compactPrintCustom pre post = dps . concat . map (spaceIf pre post) . words 
 
 dps = dropWhile isSpace