Index: utils/lit/lit/TestRunner.py
===================================================================
--- utils/lit/lit/TestRunner.py
+++ utils/lit/lit/TestRunner.py
@@ -344,8 +344,10 @@
     stderr = StringIO()
     exitCode = 0
     for dir in args:
+        dir = lit.util.convertToLocalEncoding(dir)
+        cwd = lit.util.convertToLocalEncoding(cmd_shenv.cwd)
         if not os.path.isabs(dir):
-            dir = os.path.realpath(os.path.join(cmd_shenv.cwd, dir))
+            dir = os.path.realpath(os.path.join(cwd, dir))
         if parent:
             lit.util.mkdir_p(dir)
         else:
@@ -598,8 +600,10 @@
     stderr = StringIO()
     exitCode = 0
     for path in args:
+        path = lit.util.convertToLocalEncoding(path)
+        cwd = lit.util.convertToLocalEncoding(cmd_shenv.cwd)
         if not os.path.isabs(path):
-            path = os.path.realpath(os.path.join(cmd_shenv.cwd, path))
+            path = os.path.realpath(os.path.join(cwd, path))
         if force and not os.path.exists(path):
             continue
         try:
@@ -695,7 +699,7 @@
         else:
             # Make sure relative paths are relative to the cwd.
             redir_filename = os.path.join(cmd_shenv.cwd, name)
-            fd = open(redir_filename, mode)
+            fd = open(lit.util.convertToLocalEncoding(redir_filename), mode)
         # Workaround a Win32 and/or subprocess bug when appending.
         #
         # FIXME: Actually, this is probably an instance of PR6753.
@@ -1080,27 +1084,30 @@
         script += '.bat'
 
     # Write script file
-    mode = 'w'
-    if litConfig.isWindows and not isWin32CMDEXE:
-      mode += 'b'  # Avoid CRLFs when writing bash scripts.
-    f = open(script, mode)
+    f = open(script, 'wb')
     if isWin32CMDEXE:
         for i, ln in enumerate(commands):
-            commands[i] = re.sub(kPdbgRegex, "echo '\\1' > nul && ", ln)
+            commands[i] = re.sub(kPdbgRegex, b"echo '\\1' > nul && ", ln)
         if litConfig.echo_all_commands:
-            f.write('@echo on\n')
+            f.write(b'@echo on\n')
         else:
-            f.write('@echo off\n')
-        f.write('\n@if %ERRORLEVEL% NEQ 0 EXIT\n'.join(commands))
+            f.write(b'@echo off\n')
+        # In python 3, this needs to be converted to bytes
+        if not isinstance(commands[i], bytes):
+          commands = map(lambda s: bytes(s, 'utf-8'), commands)
+        f.write(b'\n@if %ERRORLEVEL% NEQ 0 EXIT\n'.join(commands))
     else:
         for i, ln in enumerate(commands):
             commands[i] = re.sub(kPdbgRegex, ": '\\1'; ", ln)
         if test.config.pipefail:
-            f.write('set -o pipefail;')
+            f.write(b'set -o pipefail;\n')
         if litConfig.echo_all_commands:
-            f.write('set -x;')
-        f.write('{ ' + '; } &&\n{ '.join(commands) + '; }')
-    f.write('\n')
+            f.write(b'set -x;\n')
+        # In python 3, the commands need to be converted to bytes
+        if not isinstance(commands[i], bytes):
+          commands = map(lambda s: bytes(s, 'utf-8'), commands)
+        f.write(b'{ ' + b'; } &&\n{ '.join(commands) + b'; }\n')
+    f.write(b'\n')
     f.close()
 
     if isWin32CMDEXE:
Index: utils/lit/lit/util.py
===================================================================
--- utils/lit/lit/util.py
+++ utils/lit/lit/util.py
@@ -424,3 +424,21 @@
         psutilProc.kill()
     except psutil.NoSuchProcess:
         pass
+
+def convertToLocalEncoding(text):
+    """This function converts utf-8 text into a format which the local system prefers
+    to work with.
+    """
+    if platform.system() == 'Windows':
+        if sys.version_info < (3,0):
+            # On Windows and Python2, we want to use 'unicode' so it gets converted
+            # to UTF-16
+            return text.decode('utf-8') if isinstance(text, str) else text
+        else:
+            # On Windows and Python3, we want to use a unicode string so it gets
+            # converted to UTF-16
+            return text.decode('utf-8') if isinstance(text, bytes) else text
+
+    # On non Windows, we just want bytes so python don't try to
+    # convert it to ascii
+    return text if isinstance(text, bytes) else text.encode('utf-8')
Index: utils/lit/tests/Inputs/shtest-shell/rm-unicode-0.txt
===================================================================
--- /dev/null
+++ utils/lit/tests/Inputs/shtest-shell/rm-unicode-0.txt
@@ -0,0 +1,7 @@
+# Check creating and removing unicode files
+#
+# RUN: mkdir -p  Output/中文
+# RUN: echo "" > Output/中文/你好.txt
+# RUN: rm Output/中文/你好.txt
+# RUN: echo "" > Output/中文/你好.txt
+# RUN: rm -r Output/中文
Index: utils/lit/tests/shtest-shell.py
===================================================================
--- utils/lit/tests/shtest-shell.py
+++ utils/lit/tests/shtest-shell.py
@@ -224,6 +224,7 @@
 # CHECK: Exit Code: 1
 # CHECK: ***
 
+# CHECK: PASS: shtest-shell :: rm-unicode-0.txt
 # CHECK: PASS: shtest-shell :: sequencing-0.txt
 # CHECK: XFAIL: shtest-shell :: sequencing-1.txt
 # CHECK: PASS: shtest-shell :: valid-shell.txt