diff --git a/CHANGES.rst b/CHANGES.rst
index b07f323f..2f6c89dc 100644
--- a/CHANGES.rst
+++ b/CHANGES.rst
@@ -37,6 +37,9 @@ Changes in this release include the following:
   passing it to a window constructor, and can also be used as the source in a
   Bind().
 
+* Fixed issue when sys.prefix is not unicode (Python2) and when its contents 
+  are not translatable to utf-8.
+
 
 
 4.0.2 "Cute as a June bug!"
diff --git a/etg/app.py b/etg/app.py
index 7713aed2..c026c984 100644
--- a/etg/app.py
+++ b/etg/app.py
@@ -430,7 +430,10 @@ def run():
                         self.RedirectStdio(filename)
 
                     # Use Python's install prefix as the default
-                    wx.StandardPaths.Get().SetInstallPrefix(_sys.prefix)
+                    prefix = _sys.prefix
+                    if isinstance(prefix, (bytes, bytearray)):
+                        prefix = prefix.decode(_sys.getfilesystemencoding())
+                    wx.StandardPaths.Get().SetInstallPrefix(prefix)
 
                     # Until the new native control for wxMac is up to par, still use the generic one.
                     wx.SystemOptions.SetOption("mac.listctrl.always_use_generic", 1)