diff --git a/include/transport/Conversation.h b/include/transport/Conversation.h
index 9c268139..ec8fa2c6 100644
--- a/include/transport/Conversation.h
+++ b/include/transport/Conversation.h
@@ -151,6 +151,8 @@ class Conversation {
 
 		void sendCachedMessages(const Swift::JID &to = Swift::JID());
 
+		void setMUCEscaping(bool mucEscaping);
+
 	private:
 		Swift::Presence::ref generatePresence(const std::string &nick, int flag, int status, const std::string &statusMessage, const std::string &newname = "");
 		void cacheMessage(boost::shared_ptr<Swift::Message> &message);
@@ -165,6 +167,7 @@ class Conversation {
 		std::list<Swift::JID> m_jids;
 		bool m_sentInitialPresence;
 		bool m_nicknameChanged;
+		bool m_mucEscaping;
 
 		// TODO: Move this to some extra class to cache the most used
 		// rooms across different accounts. Just now if we have 10 users
diff --git a/libtransport/Conversation.cpp b/libtransport/Conversation.cpp
index 08c57be6..bda7f39b 100644
--- a/libtransport/Conversation.cpp
+++ b/libtransport/Conversation.cpp
@@ -45,6 +45,7 @@ Conversation::Conversation(ConversationManager *conversationManager, const std::
 	m_jid = m_conversationManager->getUser()->getJID().toBare();
 	m_sentInitialPresence = false;
 	m_nicknameChanged = false;
+	m_mucEscaping = false;
 
 	if (CONFIG_BOOL_DEFAULTED(conversationManager->getComponent()->getConfig(), "features.rawxml", false)) {
 		m_sentInitialPresence = true;
@@ -54,11 +55,16 @@ Conversation::Conversation(ConversationManager *conversationManager, const std::
 Conversation::~Conversation() {
 }
 
+void Conversation::setMUCEscaping(bool mucEscaping) {
+	LOG4CXX_INFO(logger, m_jid.toString() << ": Setting MUC escaping to " << mucEscaping);
+	m_mucEscaping = mucEscaping;
+}
+
 void Conversation::destroyRoom() {
 	if (m_muc) {
 		Swift::Presence::ref presence = Swift::Presence::create();
 		std::string legacyName = m_legacyName;
-		if (legacyName.find_last_of("@") != std::string::npos) {
+		if (!m_mucEscaping && legacyName.find_last_of("@") != std::string::npos) {
 			legacyName.replace(legacyName.find_last_of("@"), 1, "%"); // OK
 		}
 		legacyName = Swift::JID::getEscapedNode(legacyName);
@@ -180,7 +186,7 @@ void Conversation::handleMessage(boost::shared_ptr<Swift::Message> &message, con
 			}
 			else {
 				std::string legacyName = m_room;
-				if (legacyName.find_last_of("@") != std::string::npos) {
+				if (!m_mucEscaping && legacyName.find_last_of("@") != std::string::npos) {
 					legacyName.replace(legacyName.find_last_of("@"), 1, "%"); // OK
 				}
 				legacyName = Swift::JID::getEscapedNode(legacyName);
@@ -190,7 +196,7 @@ void Conversation::handleMessage(boost::shared_ptr<Swift::Message> &message, con
 	}
 	else {
 		std::string legacyName = m_legacyName;
-		if (legacyName.find_last_of("@") != std::string::npos) {
+		if (!m_mucEscaping && legacyName.find_last_of("@") != std::string::npos) {
 			legacyName.replace(legacyName.find_last_of("@"), 1, "%"); // OK
 		}
 		legacyName = Swift::JID::getEscapedNode(legacyName);
@@ -251,7 +257,7 @@ Swift::Presence::ref Conversation::generatePresence(const std::string &nick, int
 	Swift::Presence::ref presence = Swift::Presence::create();
 	std::string legacyName = m_legacyName;
 	if (m_muc) {
-		if (legacyName.find_last_of("@") != std::string::npos) {
+		if (!m_mucEscaping && legacyName.find_last_of("@") != std::string::npos) {
 			legacyName.replace(legacyName.find_last_of("@"), 1, "%"); // OK
 		}
 		legacyName = Swift::JID::getEscapedNode(legacyName);
diff --git a/libtransport/User.cpp b/libtransport/User.cpp
index dee06fe4..e8dbacfa 100644
--- a/libtransport/User.cpp
+++ b/libtransport/User.cpp
@@ -292,6 +292,10 @@ void User::handlePresence(Swift::Presence::ref presence, bool forceJoin) {
 			conv->setNickname(presence->getTo().getResource());
 			conv->addJID(presence->getFrom());
 
+			if (presence->getTo().toString().find("\\40") != std::string::npos) {
+				conv->setMUCEscaping(true);
+			}
+
 			onRawPresenceReceived(presence);
 			onRoomJoined(presence->getFrom(), room, presence->getTo().getResource(), password);
 
diff --git a/tests/libtransport/conversationmanager.cpp b/tests/libtransport/conversationmanager.cpp
index 3f860f44..2f711094 100644
--- a/tests/libtransport/conversationmanager.cpp
+++ b/tests/libtransport/conversationmanager.cpp
@@ -26,6 +26,7 @@ class ConversationManagerTest : public CPPUNIT_NS :: TestFixture, public BasicTe
 	CPPUNIT_TEST(handleSubjectMessages);
 	CPPUNIT_TEST(handleParticipantChanged);
 	CPPUNIT_TEST(handleParticipantChangedEscaped);
+	CPPUNIT_TEST(handleParticipantChangedEscaped2);
 	CPPUNIT_TEST(handleParticipantChangedTwoResources);
 	CPPUNIT_TEST(handlePMFromXMPP);
 	CPPUNIT_TEST(handleGroupchatRemoved);
@@ -571,6 +572,29 @@ class ConversationManagerTest : public CPPUNIT_NS :: TestFixture, public BasicTe
 		CPPUNIT_ASSERT_EQUAL(Swift::MUCOccupant::Participant, *getStanza(received[0])->getPayload<Swift::MUCUserPayload>()->getItems()[0].role);
 	}
 
+	void handleParticipantChangedEscaped2() {
+		User *user = userManager->getUser("user@localhost");
+		TestingConversation *conv = new TestingConversation(user->getConversationManager(), "19:70027094a9c84c518535a610766bed65@thread.skype", true);
+		conv->setMUCEscaping(true);
+		
+		conv->onMessageToSend.connect(boost::bind(&ConversationManagerTest::handleMessageReceived, this, _1, _2));
+		conv->setNickname("nickname");
+		conv->addJID("user@localhost/resource");
+
+		// normal presence
+		conv->handleParticipantChanged("anotheruser", Conversation::PARTICIPANT_FLAG_NONE, Swift::StatusShow::Away, "my status message");
+		loop->processEvents();
+
+		CPPUNIT_ASSERT_EQUAL(1, (int) received.size());
+		CPPUNIT_ASSERT(dynamic_cast<Swift::Presence *>(getStanza(received[0])));
+		CPPUNIT_ASSERT_EQUAL(Swift::StatusShow::Away, dynamic_cast<Swift::Presence *>(getStanza(received[0]))->getShow());
+		CPPUNIT_ASSERT_EQUAL(std::string("user@localhost/resource"), dynamic_cast<Swift::Presence *>(getStanza(received[0]))->getTo().toString());
+		CPPUNIT_ASSERT_EQUAL(std::string("19\\3a70027094a9c84c518535a610766bed65\\40thread.skype@localhost/anotheruser"), dynamic_cast<Swift::Presence *>(getStanza(received[0]))->getFrom().toString());
+		CPPUNIT_ASSERT(getStanza(received[0])->getPayload<Swift::MUCUserPayload>());
+		CPPUNIT_ASSERT_EQUAL(Swift::MUCOccupant::Member, *getStanza(received[0])->getPayload<Swift::MUCUserPayload>()->getItems()[0].affiliation);
+		CPPUNIT_ASSERT_EQUAL(Swift::MUCOccupant::Participant, *getStanza(received[0])->getPayload<Swift::MUCUserPayload>()->getItems()[0].role);
+	}
+
 	void handleParticipantChangedTwoResources() {
 		connectSecondResource();
 		received2.clear();