diff --git a/CTFd/admin/challenges.py b/CTFd/admin/challenges.py
index 55de2811..37514563 100644
--- a/CTFd/admin/challenges.py
+++ b/CTFd/admin/challenges.py
@@ -1,9 +1,11 @@
 from flask import current_app as app, render_template, render_template_string, url_for
 from CTFd.utils.decorators import admins_only
+from CTFd.utils import binary_type
 from CTFd.models import Solves, Challenges, Flags
 from CTFd.plugins.challenges import get_chal_class
 from CTFd.admin import admin
 import os
+import six
 
 
 @admin.route('/admin/challenges')
@@ -22,9 +24,12 @@ def challenges_detail(challenge_id):
     flags = Flags.query.filter_by(challenge_id=challenge.id).all()
     challenge_class = get_chal_class(challenge.type)
 
-    with open(os.path.join(app.root_path, challenge_class.templates['update'].lstrip('/'))) as update:
+    with open(os.path.join(app.root_path, challenge_class.templates['update'].lstrip('/')), 'rb') as update:
+        tpl = update.read()
+        if six.PY3 and isinstance(tpl, binary_type):
+            tpl = tpl.decode('utf-8')
         update_j2 = render_template_string(
-            update.read().decode('utf-8'),
+            tpl,
             challenge=challenge
         )
 
diff --git a/tests/admin/test_challenges.py b/tests/admin/test_challenges.py
index 5832d57a..2df8119d 100644
--- a/tests/admin/test_challenges.py
+++ b/tests/admin/test_challenges.py
@@ -21,6 +21,32 @@ def test_get_admin_challenges_new():
     destroy_ctfd(app)
 
 
+def test_create_new_challenge():
+    """Test that an admin can create a challenge properly"""
+    app = create_ctfd()
+    with app.app_context():
+        register_user(app)
+        client = login_as_user(app, name="admin", password="password")
+
+        challenge_data = {
+            "name": "name",
+            "category": "category",
+            "description": "description",
+            "value": 100,
+            "state": "hidden",
+            "type": "standard"
+        }
+
+        r = client.post('/api/v1/challenges', json=challenge_data)
+        assert r.get_json().get('data')['id'] == 1
+        r = client.get('/admin/challenges/1')
+        assert r.status_code == 200
+        r = client.get('/api/v1/challenges/1')
+        assert r.get_json().get('data')['id'] == 1
+
+    destroy_ctfd(app)
+
+
 def test_hidden_challenge_is_reachable():
     """Test that hidden challenges are visible for admins"""
     app = create_ctfd()