diff --git a/django/db/backends/oracle/base.py b/django/db/backends/oracle/base.py
index 80558a0a680..c4155e2c9ab 100644
--- a/django/db/backends/oracle/base.py
+++ b/django/db/backends/oracle/base.py
@@ -36,6 +36,14 @@ DatabaseError = Database.DatabaseError
 IntegrityError = Database.IntegrityError
 
 
+# Check whether cx_Oracle was compiled with the WITH_UNICODE option.  This will
+# also be True in Python 3.0.
+if int(Database.version.split('.', 1)[0]) >= 5 and not hasattr(Database, 'UNICODE'):
+    convert_unicode = force_unicode
+else:
+    convert_unicode = smart_str
+
+
 class DatabaseFeatures(BaseDatabaseFeatures):
     empty_fetchmany_value = ()
     needs_datetime_string_cast = False
@@ -170,10 +178,10 @@ WHEN (new.%(col_name)s IS NULL)
         return "RETURNING %s INTO %%s", (InsertIdVar(),)
 
     def savepoint_create_sql(self, sid):
-        return "SAVEPOINT " + self.quote_name(sid)
+        return convert_unicode("SAVEPOINT " + self.quote_name(sid))
 
     def savepoint_rollback_sql(self, sid):
-        return "ROLLBACK TO SAVEPOINT " + self.quote_name(sid)
+        return convert_unicode("ROLLBACK TO SAVEPOINT " + self.quote_name(sid))
 
     def sql_flush(self, style, tables, sequences):
         # Return a list of 'TRUNCATE x;', 'TRUNCATE y;',
@@ -304,7 +312,7 @@ class DatabaseWrapper(BaseDatabaseWrapper):
     def _cursor(self):
         cursor = None
         if not self._valid_connection():
-            conn_string = self._connect_string()
+            conn_string = convert_unicode(self._connect_string())
             self.connection = Database.connect(conn_string, **self.settings_dict['DATABASE_OPTIONS'])
             cursor = FormatStylePlaceholderCursor(self.connection)
             # Set oracle date to ansi date format.  This only needs to execute
@@ -355,7 +363,8 @@ class OracleParam(object):
         if hasattr(param, 'bind_parameter'):
             self.smart_str = param.bind_parameter(cursor)
         else:
-            self.smart_str = smart_str(param, cursor.charset, strings_only)
+            self.smart_str = convert_unicode(param, cursor.charset,
+                                             strings_only)
         if hasattr(param, 'input_size'):
             # If parameter has `input_size` attribute, use that.
             self.input_size = param.input_size
@@ -423,7 +432,7 @@ class FormatStylePlaceholderCursor(object):
         # is being passed to SQL*Plus.
         if query.endswith(';') or query.endswith('/'):
             query = query[:-1]
-        query = smart_str(query, self.charset) % tuple(args)
+        query = convert_unicode(query % tuple(args), self.charset)
         self._guess_input_sizes([params])
         try:
             return self.cursor.execute(query, self._param_generator(params))
@@ -445,7 +454,7 @@ class FormatStylePlaceholderCursor(object):
         # is being passed to SQL*Plus.
         if query.endswith(';') or query.endswith('/'):
             query = query[:-1]
-        query = smart_str(query, self.charset) % tuple(args)
+        query = convert_unicode(query % tuple(args), self.charset)
         formatted = [self._format_params(i) for i in params]
         self._guess_input_sizes(formatted)
         try:
diff --git a/docs/ref/databases.txt b/docs/ref/databases.txt
index 007a7079b7a..fc58dbaf477 100644
--- a/docs/ref/databases.txt
+++ b/docs/ref/databases.txt
@@ -476,6 +476,10 @@ version of the driver should **not** be used with Django;
 ``cx_Oracle`` 5.0.1 resolved this issue, so if you'd like to use a
 more recent ``cx_Oracle``, use version 5.0.1.
 
+``cx_Oracle`` 5.0.1 or greater can optionally be compiled with the
+``WITH_UNICODE`` environment variable.  This is recommended but not
+required.
+
 .. _`Oracle Database Server`: http://www.oracle.com/
 .. _`cx_Oracle`: http://cx-oracle.sourceforge.net/
 
diff --git a/tests/regressiontests/backends/tests.py b/tests/regressiontests/backends/tests.py
index aff27369ad1..628fabf04a8 100644
--- a/tests/regressiontests/backends/tests.py
+++ b/tests/regressiontests/backends/tests.py
@@ -1,7 +1,7 @@
 # -*- coding: utf-8 -*-
 # Unit and doctests for specific database backends.
 import unittest
-from django.db import connection
+from django.db import backend, connection
 from django.db.backends.signals import connection_created
 from django.conf import settings
 
@@ -11,9 +11,10 @@ class Callproc(unittest.TestCase):
         # If the backend is Oracle, test that we can call a standard
         # stored procedure through our cursor wrapper.
         if settings.DATABASE_ENGINE == 'oracle':
+            convert_unicode = backend.convert_unicode
             cursor = connection.cursor()
-            cursor.callproc('DBMS_SESSION.SET_IDENTIFIER',
-                            ['_django_testing!',])
+            cursor.callproc(convert_unicode('DBMS_SESSION.SET_IDENTIFIER'),
+                            [convert_unicode('_django_testing!'),])
             return True
         else:
             return True