diff --git a/gluon/contrib/minify/cssmin.py b/gluon/contrib/minify/cssmin.py
index f9ed89f9..15d97a0b 100644
--- a/gluon/contrib/minify/cssmin.py
+++ b/gluon/contrib/minify/cssmin.py
@@ -10,8 +10,11 @@ Original author: Zachary Voase
 Modified for inclusion into web2py by: Ross Peoples <ross.peoples@gmail.com>
 """
 
+try:
+    from StringIO import StringIO
+except ImportError:
+    from io import StringIO
 
-from StringIO import StringIO  # The pure-Python StringIO supports unicode.
 import re
 
 
diff --git a/gluon/contrib/minify/minify.py b/gluon/contrib/minify/minify.py
index 8749acd7..134cc664 100644
--- a/gluon/contrib/minify/minify.py
+++ b/gluon/contrib/minify/minify.py
@@ -8,30 +8,40 @@ Created by: Ross Peoples <ross.peoples@gmail.com>
 Modified by: Massimo Di Pierro <massimo.dipierro@gmail.com>
 """
 
-import cssmin
-import jsmin
+from . import cssmin
+from . import jsmin
 import os
 import hashlib
 import re
+import sys
+PY2 = sys.version_info[0] == 2
 
+if PY2:
+    hashlib_md5 = hashlib.md5
+else:
+    hashlib_md5 = lambda s: hashlib.md5(bytes(s, 'utf8'))
+
+def open_py23(filename, mode):
+    if PY2:
+        f = open(filename, mode + 'b')
+    else:
+        f = open(filename, mode, encoding="utf8")
+    return f
 
 def read_binary_file(filename):
-    f = open(filename, 'rb')
+    f = open_py23(filename, 'r')
     data = f.read()
     f.close()
     return data
 
-
 def write_binary_file(filename, data):
-    f = open(filename, 'wb')
+    f = open_py23(filename, 'w')
     f.write(data)
     f.close()
 
-
 def fix_links(css, static_path):
     return re.sub(r'url\((["\'])\.\./', 'url(\\1' + static_path, css)
 
-
 def minify(files, path_info, folder, optimize_css, optimize_js,
            ignore_concat=[],
            ignore_minify=['/jquery.js', '/anytime.js']):
@@ -109,7 +119,7 @@ def minify(files, path_info, folder, optimize_css, optimize_js,
                     js.append(contents)
             else:
                 js.append(filename)
-    dest_key = hashlib.md5(repr(processed)).hexdigest()
+    dest_key = hashlib_md5(repr(processed)).hexdigest()
     if css and concat_css:
         css = '\n\n'.join(contents for contents in css)
         if not inline_css:
diff --git a/gluon/globals.py b/gluon/globals.py
index 9d17fae6..5b963f0a 100644
--- a/gluon/globals.py
+++ b/gluon/globals.py
@@ -13,7 +13,7 @@ Contains the classes for the global used variables:
 - Session
 
 """
-from gluon._compat import pickle, StringIO, copyreg, Cookie, urlparse, PY2, iteritems, to_unicode, to_native, unicodeT, long
+from gluon._compat import pickle, StringIO, copyreg, Cookie, urlparse, PY2, iteritems, to_unicode, to_native, unicodeT, long, hashlib_md5
 from gluon.storage import Storage, List
 from gluon.streamer import streamer, stream_file_or_304_or_206, DEFAULT_CHUNK_SIZE
 from gluon.contenttype import contenttype
@@ -457,7 +457,6 @@ class Response(Storage):
         self.write(s, escape=False)
 
     def include_files(self, extensions=None):
-
         """
         Includes files (usually in the head).
         Can minify and cache local files
@@ -484,8 +483,7 @@ class Response(Storage):
 
         if have_minify and ((self.optimize_css and has_css) or (self.optimize_js and has_js)):
             # cache for 5 minutes by default
-            key = hashlib.md5(repr(files)).hexdigest()
-
+            key = hashlib_md5(repr(files)).hexdigest()
             cache = self.cache_includes or (current.cache.ram, 60 * 5)
 
             def call_minify(files=files):
@@ -523,6 +521,7 @@ class Response(Storage):
                 tmpl = template_mapping.get(f)
                 if tmpl:
                     s.append(tmpl % item[1])
+
         self.write(''.join(s), escape=False)
 
     def stream(self,
diff --git a/gluon/tests/test_appadmin.py b/gluon/tests/test_appadmin.py
index 41613152..22b1d05a 100644
--- a/gluon/tests/test_appadmin.py
+++ b/gluon/tests/test_appadmin.py
@@ -17,6 +17,7 @@ from gluon import fileutils
 from gluon.dal import DAL, Field, Table
 from gluon.http import HTTP
 from gluon.fileutils import open_file
+from gluon.cache import CacheInRam
 
 DEFAULT_URI = os.getenv('DB', 'sqlite:memory')
 
@@ -104,6 +105,21 @@ class TestAppAdmin(unittest.TestCase):
         self._test_index()
         remove_compiled_application(appname_path)
 
+    def test_index_minify(self):
+        # test for gluon/contrib/minify
+        self.env['response'].optimize_css = 'concat|minify'
+        self.env['response'].optimize_js = 'concat|minify'
+        self.env['current'].cache = Storage({'ram':CacheInRam()})
+        appname_path = os.path.join(os.getcwd(), 'applications', 'welcome')
+        self._test_index()
+        file_l = os.listdir(os.path.join(appname_path, 'static', 'temp'))
+        file_l.sort()
+        self.assertTrue(len(file_l) == 2)
+        self.assertEqual(file_l[0][0:10], 'compressed')
+        self.assertEqual(file_l[1][0:10], 'compressed')
+        self.assertEqual(file_l[0][-3:], 'css')
+        self.assertEqual(file_l[1][-2:], 'js')
+
     def test_select(self):
         request = self.env['request']
         request.args = List(['db'])