diff --git a/CHANGELOG.md b/CHANGELOG.md
index 061b3d47d..40ede7e17 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -29,6 +29,7 @@ at anytime.
   * Fixed BlobManager causing functional tests to fail, removed its unneeded manage() loop
   * Increased max_key_fee
   * Fixed unit tests on appveyor Windows build
+  * Fixed [#692](https://github.com/lbryio/lbry/issues/692) 
 
 ### Deprecated
   *
diff --git a/lbrynet/conf.py b/lbrynet/conf.py
index 6a960d11f..8efeaa87e 100644
--- a/lbrynet/conf.py
+++ b/lbrynet/conf.py
@@ -43,6 +43,21 @@ settings_encoders = {
     '.yml': yaml.safe_dump
 }
 
+def _win_path_to_bytes(path):
+    """
+    Encode Windows paths to string. appdirs.user_data_dir()
+    on windows will return unicode path, unlike other platforms
+    which returns string. This will cause problems
+    because we use strings for filenames and combining them with
+    os.path.join() will result in errors.
+    """
+    for encoding in ('ASCII', 'MBCS'):
+        try:
+            return path.encode(encoding)
+        except (UnicodeEncodeError, LookupError):
+            pass
+    return path
+
 if sys.platform.startswith('darwin'):
     platform = DARWIN
     default_download_directory = os.path.join(os.path.expanduser('~'), 'Downloads')
@@ -57,6 +72,10 @@ elif sys.platform.startswith('win'):
         get_path(FOLDERID.RoamingAppData, UserHandle.current), 'lbrynet')
     default_lbryum_dir = os.path.join(
         get_path(FOLDERID.RoamingAppData, UserHandle.current), 'lbryum')
+
+    default_download_directory = _win_path_to_bytes(default_download_directory)
+    default_data_dir = _win_path_to_bytes(default_data_dir)
+    default_lbryum_dir = _win_path_to_bytes(default_lbryum_dir)
 else:
     platform = LINUX
     default_download_directory = os.path.join(os.path.expanduser('~'), 'Downloads')
diff --git a/tests/unit/test_conf.py b/tests/unit/test_conf.py
index 2fce3e447..17dff30e2 100644
--- a/tests/unit/test_conf.py
+++ b/tests/unit/test_conf.py
@@ -1,7 +1,6 @@
 import os
 
 from twisted.trial import unittest
-
 from lbrynet import conf
 
 
@@ -54,3 +53,11 @@ class SettingsTest(unittest.TestCase):
         self.assertEqual('cli_test_string', settings['test'])
         settings.set('test', 'runtime_takes_precedence', data_types=(conf.TYPE_RUNTIME,))
         self.assertEqual('runtime_takes_precedence', settings['test'])
+
+    def test_data_dir(self):
+        # check if these directories are returned as string and not unicode
+        # otherwise there will be problems when calling os.path.join on
+        # unicode directory names with string file names
+        self.assertEqual(str, type(conf.default_download_directory))
+        self.assertEqual(str, type(conf.default_data_dir))
+        self.assertEqual(str, type(conf.default_lbryum_dir))