diff --git a/client/mysql.cc b/client/mysql.cc
index 3de616ae407..be157f52d08 100644
--- a/client/mysql.cc
+++ b/client/mysql.cc
@@ -2044,7 +2044,8 @@ static bool add_line(String &buffer,char *line,char *in_string,
     }
 #endif
     if (!*ml_comment && inchar == '\\' &&
-        !(mysql.server_status & SERVER_STATUS_NO_BACKSLASH_ESCAPES))
+        !(*in_string && 
+          (mysql.server_status & SERVER_STATUS_NO_BACKSLASH_ESCAPES)))
     {
       // Found possbile one character command like \c
 
diff --git a/mysql-test/suite/bugs/r/rpl_bug36391.result b/mysql-test/suite/bugs/r/rpl_bug36391.result
new file mode 100644
index 00000000000..2d62837a87a
--- /dev/null
+++ b/mysql-test/suite/bugs/r/rpl_bug36391.result
@@ -0,0 +1,17 @@
+stop slave;
+drop table if exists t1,t2,t3,t4,t5,t6,t7,t8,t9;
+reset master;
+reset slave;
+drop table if exists t1,t2,t3,t4,t5,t6,t7,t8,t9;
+start slave;
+drop table if exists t1;
+Warnings:
+Note	1051	Unknown table 't1'
+create table t1(id int);
+show tables;
+Tables_in_test
+t1
+show master status;
+File	Position	Binlog_Do_DB	Binlog_Ignore_DB
+master-bin.000001	278		
+flush logs;
diff --git a/mysql-test/suite/bugs/t/rpl_bug36391-master.opt b/mysql-test/suite/bugs/t/rpl_bug36391-master.opt
new file mode 100644
index 00000000000..56273241f14
--- /dev/null
+++ b/mysql-test/suite/bugs/t/rpl_bug36391-master.opt
@@ -0,0 +1 @@
+--sql_mode=NO_BACKSLASH_ESCAPES
diff --git a/mysql-test/suite/bugs/t/rpl_bug36391.test b/mysql-test/suite/bugs/t/rpl_bug36391.test
new file mode 100644
index 00000000000..9f384304837
--- /dev/null
+++ b/mysql-test/suite/bugs/t/rpl_bug36391.test
@@ -0,0 +1,28 @@
+#
+# BUG#36391 and BUG#38731
+#
+# The fix for BUG#20103 "Escaping with backslash does not work as expected"
+# was implemented too greedy though in that it not only changes the behavior
+# of backslashes within strings but in general, so disabling command shortcuts
+# like \G or \C (which in turn leads to BUG#36391: "mysqlbinlog creates invalid charset statements".
+#
+# The test executes simple commands that are stored in the binary log and
+# re-execute them through the mysql client which should have to process 
+# some command shortcuts. The backslashes within strings is disabled in the file
+# rpl_bug36391-master.opt by the option --sql_mode=NO_BACKSLASH_ESCAPES.
+#
+# 
+
+--source include/master-slave.inc
+
+drop table if exists t1;
+
+create table t1(id int);
+
+show tables;
+
+show master status;
+
+flush logs;
+
+--exec $MYSQL_BINLOG $MYSQL_TEST_DIR/var/log/master-bin.000001 | $MYSQL test