Index: django/template/defaultfilters.py
===================================================================
--- django/template/defaultfilters.py	(revision 3254)
+++ django/template/defaultfilters.py	(working copy)
@@ -65,8 +65,11 @@
 
 def slugify(value):
     "Converts to lowercase, removes non-alpha chars and converts spaces to hyphens"
-    value = re.sub('[^\w\s-]', '', value).strip().lower()
-    return re.sub('[-\s]+', '-', value)
+    decoded_value = unicode(value, 'utf-8')
+    p = re.compile('[^\w\s-]', re.UNICODE)
+    decoded_value = re.sub(p, '', decoded_value).strip().lower()
+    decoded_value = re.sub('[-\s]+', '-', decoded_value)
+    return decoded_value.encode('utf-8')
 
 def stringformat(value, arg):
     """