diff --git a/CHANGES.txt b/CHANGES.txt
index 9d68b7fd4ef..841d2622101 100644
--- a/CHANGES.txt
+++ b/CHANGES.txt
@@ -38,6 +38,9 @@
 
 * Added pip completion support for fish shell.
 
+* Fix problems on Windows on Python 2 when username or hostname contains
+  non-ASCII characters (:issue:`3463`, :pull:`3970`).
+
 * Use git fetch --tags to fetch tags in addition to everything else that
   is normally fetched; this is necessary in case a git requirement url
   points to a tag or commit that is not on a branch (:pull:`3791`)
diff --git a/pip/utils/appdirs.py b/pip/utils/appdirs.py
index 15ca3cd03e8..a4948cd9239 100644
--- a/pip/utils/appdirs.py
+++ b/pip/utils/appdirs.py
@@ -8,6 +8,7 @@
 import sys
 
 from pip.compat import WINDOWS, expanduser
+from pip._vendor.six import PY2, text_type
 
 
 def user_cache_dir(appname):
@@ -35,6 +36,11 @@ def user_cache_dir(appname):
         # Get the base path
         path = os.path.normpath(_get_win_folder("CSIDL_LOCAL_APPDATA"))
 
+        # When using Python 2, return paths as bytes on Windows like we do on
+        # other operating systems. See helper function docs for more details.
+        if PY2 and isinstance(path, text_type):
+            path = _win_path_to_bytes(path)
+
         # Add our app name and Cache directory to it
         path = os.path.join(path, appname, "Cache")
     elif sys.platform == "darwin":
@@ -222,3 +228,21 @@ def _get_win_folder_with_ctypes(csidl_name):
         _get_win_folder = _get_win_folder_with_ctypes
     except ImportError:
         _get_win_folder = _get_win_folder_from_registry
+
+
+def _win_path_to_bytes(path):
+    """Encode Windows paths to bytes. Only used on Python 2.
+
+    Motivation is to be consistent with other operating systems where paths
+    are also returned as bytes. This avoids problems mixing bytes and Unicode
+    elsewhere in the codebase. For more details and discussion see
+    <https://github.com/pypa/pip/issues/3463>.
+
+    If encoding using ASCII and MBCS fails, return the original Unicode path.
+    """
+    for encoding in ('ASCII', 'MBCS'):
+        try:
+            return path.encode(encoding)
+        except (UnicodeEncodeError, LookupError):
+            pass
+    return path
diff --git a/tests/unit/test_utils.py b/tests/unit/test_utils.py
index 32220b4d180..d81ac81a215 100644
--- a/tests/unit/test_utils.py
+++ b/tests/unit/test_utils.py
@@ -22,6 +22,7 @@
 from pip.utils.encoding import auto_decode
 from pip.utils.hashes import Hashes, MissingHashes
 from pip.utils.glibc import check_glibc_version
+from pip.utils.appdirs import user_cache_dir
 from pip._vendor.six import BytesIO
 
 
@@ -524,3 +525,10 @@ def test_manylinux1_check_glibc_version(self):
                 else:
                     # Didn't find the warning we were expecting
                     assert False
+
+
+class Test_user_cache_dir(object):
+
+    def test_return_path_as_str(self):
+        """Test that path is bytes on Python 2 and Unicode on Python 3."""
+        assert isinstance(user_cache_dir('test'), str)