diff --git a/actionpack/lib/action_view/template_handlers/erb.rb b/actionpack/lib/action_view/template_handlers/erb.rb
index 2f2febaa52..3def949f1e 100644
--- a/actionpack/lib/action_view/template_handlers/erb.rb
+++ b/actionpack/lib/action_view/template_handlers/erb.rb
@@ -48,8 +48,11 @@ class ERB < TemplateHandler
       self.erb_trim_mode = '-'
 
       def compile(template)
-        src = ::ERB.new(template.source, nil, erb_trim_mode, '@output_buffer').src
-        "__in_erb_template=true;#{src}"
+        src = ::ERB.new("<% __in_erb_template=true %>#{template.source}", nil, erb_trim_mode, '@output_buffer').src
+
+        # Ruby 1.9 prepends an encoding to the source. However this is
+        # useless because you can only set an encoding on the first line
+        RUBY_VERSION >= '1.9' ? src.sub(/\A#coding:.*\n/, '') : src
       end
     end
   end