diff --git a/development/FORMAT b/development/FORMAT
index 7ca9e10372..314f9b0b20 100644
--- a/development/FORMAT
+++ b/development/FORMAT
@@ -1,6 +1,21 @@
 LyX file-format changes
 -----------------------
 
+2006-08-14  Georg Baum  <Georg.Baum@post.rwth-aachen.de>
+
+	* format incremented to 249: Unicode
+
+	LyX documents are now always encoded in utf8. The value of
+	\inputencoding does now only determine the encoding of the created
+	LaTeX file.
+	Up to format 248 the value of \inputencoding did also determine the
+	encoding of the LyX file:
+
+	\inputencoding       LyX file encoding
+	auto                 as determined by the document language
+	default              latin1
+	everything else      as determined by \inputencoding
+
 2006-07-03  Georg Baum  <Georg.Baum@post.rwth-aachen.de>
 
 	* format incremented to 248: Basic booktabs support
diff --git a/lib/lyx2lyx/LyX.py b/lib/lyx2lyx/LyX.py
index 0161dc6afe..5ba2836d0c 100644
--- a/lib/lyx2lyx/LyX.py
+++ b/lib/lyx2lyx/LyX.py
@@ -73,7 +73,7 @@ format_relation = [("0_06",    [200], generate_minor_versions("0.6" , 4)),
                    ("1_2",     [220], generate_minor_versions("1.2" , 4)),
                    ("1_3",     [221], generate_minor_versions("1.3" , 7)),
                    ("1_4", range(222,246), generate_minor_versions("1.4" , 3)),
-                   ("1_5", range(246,249), generate_minor_versions("1.5" , 0))]
+                   ("1_5", range(246,250), generate_minor_versions("1.5" , 0))]
 
 
 def formats_list():
@@ -108,7 +108,9 @@ def trim_eol(line):
         return line[:-1]
 
 
-def get_encoding(language, inputencoding):
+def get_encoding(language, inputencoding, format):
+    if format > 248:
+        return "utf8"
     from lyx2lyx_lang import lang
     if inputencoding == "auto":        
         return lang[language][3]
@@ -224,7 +226,7 @@ class LyX_Base:
         self.format  = self.read_format()
         self.language = get_value(self.header, "\\language", 0, default = "english")
         self.inputencoding = get_value(self.header, "\\inputencoding", 0, default = "auto")
-        self.encoding = get_encoding(self.language, self.inputencoding)
+        self.encoding = get_encoding(self.language, self.inputencoding, self.format)
         self.initial_version = self.read_version()
 
         # Second pass over header and preamble, now we know the file encoding
@@ -246,7 +248,7 @@ class LyX_Base:
         self.set_version()
         self.set_format()
         if self.encoding == "auto":
-            self.encoding = get_encoding(self.language, self.encoding)
+            self.encoding = get_encoding(self.language, self.encoding, self.format)
 
         if self.preamble:
             i = find_token(self.header, '\\textclass', 0) + 1
diff --git a/lib/lyx2lyx/lyx_1_5.py b/lib/lyx2lyx/lyx_1_5.py
index e26116ca13..2b055fcc46 100644
--- a/lib/lyx2lyx/lyx_1_5.py
+++ b/lib/lyx2lyx/lyx_1_5.py
@@ -21,6 +21,7 @@
 
 import re
 from parser_tools import find_token, find_token_exact, find_tokens, find_end_of, get_value
+from LyX import get_encoding
 
 
 ####################################################################
@@ -217,13 +218,18 @@ def revert_booktabs(document):
 
 
 def convert_utf8(document):
+    document.encoding = "utf8"
+
+
+def revert_utf8(document):
     i = find_token(document.header, "\\inputencoding", 0)
     if i == -1:
-        document.header.append("\\inputencoding utf-8")
-    else:
-        document.header[i] = "\\inputencoding utf-8"
-    document.inputencoding = "utf-8"
-    document.encoding = "utf-8"
+        document.header.append("\\inputencoding auto")
+    elif get_value(document.header, "\\inputencoding", i) == "utf8":
+        document.header[i] = "\\inputencoding auto"
+    document.inputencoding = get_value(document.header, "\\inputencoding", 0)
+    document.encoding = get_encoding(document.language, document.inputencoding, 248)
+
 
 ##
 # Conversion hub
@@ -232,11 +238,11 @@ def convert_utf8(document):
 supported_versions = ["1.5.0","1.5"]
 convert = [[246, []],
            [247, [convert_font_settings]],
-           [248, []]
-           # ,[xxx, [convert_utf8]] uncomment to support convertion to utf-8
-          ]
+           [248, []],
+           [249, [convert_utf8]]]
 
-revert =  [[247, [revert_booktabs]],
+revert =  [[248, [revert_utf8]],
+           [247, [revert_booktabs]],
            [246, [revert_font_settings]],
            [245, [revert_framed]]]
 
diff --git a/src/buffer.C b/src/buffer.C
index fd50d05017..21240a0bea 100644
--- a/src/buffer.C
+++ b/src/buffer.C
@@ -146,7 +146,7 @@ extern BufferList bufferlist;
 
 namespace {
 
-int const LYX_FORMAT = 248;
+int const LYX_FORMAT = 249;
 
 } // namespace anon
 
diff --git a/src/bufferparams.h b/src/bufferparams.h
index d78692733a..4be55bdf4c 100644
--- a/src/bufferparams.h
+++ b/src/bufferparams.h
@@ -175,7 +175,15 @@ public:
 	/// BranchList:
 	BranchList & branchlist();
 	BranchList const & branchlist() const;
-	///
+	/**
+	 * The input encoding for LaTeX. This can be one of
+	 * - auto: find out the input encoding from the used languages
+	 * - default: Don't load the inputenc package and hope that it will
+	 *   work (unlikely)
+	 * - any encoding supported by the inputenc package
+	 * The encoding of the LyX file is always utf8 and has nothing to
+	 * do with this setting.
+	 */
 	std::string inputenc;
 	///
 	std::string preamble;