diff --git a/mercurial_keyring.py b/mercurial_keyring.py
--- a/mercurial_keyring.py
+++ b/mercurial_keyring.py
@@ -240,8 +240,12 @@ class PasswordStore(object):
         """Physically write to keyring"""
         keyring = import_keyring()
         # keyring in general expects unicode.
-        # Mercurial provides "local" encoding. See #33
-        password = encoding.fromlocal(password).decode('utf-8')
+        # Mercurial provides "local" encoding. See #33.
+        # py3 adds even more fun as we get already unicode from getpass.
+        # To handle those quirks, let go through encoding.fromlocal in case we
+        # got bytestr here, this will handle both normal py2 and emergency py3 cases.
+        if isinstance(password, bytes):
+            password = encoding.fromlocal(password).decode('utf-8')
         try:
             keyring.set_password(
                 KEYRING_SERVICE, pwdkey, password)