diff --git a/bin/ansible b/bin/ansible
index 86a91d0b492..b403a7fc869 100755
--- a/bin/ansible
+++ b/bin/ansible
@@ -133,9 +133,6 @@ class Cli(object):
             except (OSError, IOError), e:
                 raise errors.AnsibleError("Could not read %s: %s" % (this_path, e))
 
-            # get rid of newline chars        
-            tmp_vault_pass = tmp_vault_pass.strip()
-
             if not options.ask_vault_pass:
                 vault_pass = tmp_vault_pass
 
diff --git a/bin/ansible-playbook b/bin/ansible-playbook
index be178a6565c..344590341e6 100755
--- a/bin/ansible-playbook
+++ b/bin/ansible-playbook
@@ -127,9 +127,6 @@ def main(args):
             except (OSError, IOError), e:
                 raise errors.AnsibleError("Could not read %s: %s" % (this_path, e))
 
-            # get rid of newline chars
-            tmp_vault_pass = tmp_vault_pass.strip()
-
             if not options.ask_vault_pass:
                 vault_pass = tmp_vault_pass
 
diff --git a/bin/ansible-vault b/bin/ansible-vault
index 2c8094d13b1..9be2a172fb9 100755
--- a/bin/ansible-vault
+++ b/bin/ansible-vault
@@ -105,8 +105,6 @@ def _read_password(filename):
     f = open(filename, "rb")
     data = f.read()
     f.close
-    # get rid of newline chars
-    data = data.strip()
     return data
 
 def execute_create(args, options, parser):
diff --git a/test/units/TestVaultEditor.py b/test/units/TestVaultEditor.py
index 4d3f99e89a9..cf7515370ab 100644
--- a/test/units/TestVaultEditor.py
+++ b/test/units/TestVaultEditor.py
@@ -75,6 +75,32 @@ class TestVaultEditor(TestCase):
         assert error_hit == False, "error decrypting 1.0 file"            
         assert fdata.strip() == "foo", "incorrect decryption of 1.0 file: %s" % fdata.strip() 
 
+    def test_decrypt_1_0_newline(self):
+        if not HAS_AES or not HAS_COUNTER or not HAS_PBKDF2:
+            raise SkipTest
+        dirpath = tempfile.mkdtemp()
+        filename = os.path.join(dirpath, "foo-ansible-1.0-ansible-newline-ansible.yml")
+        shutil.rmtree(dirpath)
+        shutil.copytree("vault_test_data", dirpath)
+        ve = VaultEditor(None, "ansible\nansible\n", filename)
+
+        # make sure the password functions for the cipher
+        error_hit = False
+        try:        
+            ve.decrypt_file()
+        except errors.AnsibleError, e:
+            error_hit = True
+
+        # verify decrypted content
+        f = open(filename, "rb")
+        fdata = f.read()
+        f.close()
+
+        shutil.rmtree(dirpath)
+        assert error_hit == False, "error decrypting 1.0 file with newline in password"            
+        #assert fdata.strip() == "foo", "incorrect decryption of 1.0 file: %s" % fdata.strip() 
+
+
     def test_decrypt_1_1(self):
         if not HAS_AES or not HAS_COUNTER or not HAS_PBKDF2:
             raise SkipTest
diff --git a/test/units/vault_test_data/foo-ansible-1.0-ansible-newline-ansible.yml b/test/units/vault_test_data/foo-ansible-1.0-ansible-newline-ansible.yml
new file mode 100644
index 00000000000..dd4e6e746b0
--- /dev/null
+++ b/test/units/vault_test_data/foo-ansible-1.0-ansible-newline-ansible.yml
@@ -0,0 +1,4 @@
+$ANSIBLE_VAULT;1.0;AES
+53616c7465645f5ff0442ae8b08e2ff316d0d6512013185df7aded44f3c0eeef1b7544d078be1fe7
+ed88d0fedcb11928df45558f4b7f80fce627fbb08c5288885ab053f4129175779a8f24f5c1113731
+7d22cee14284670953c140612edf62f92485123fc4f15099ffe776e906e08145