diff --git a/simgear/misc/strutils.cxx b/simgear/misc/strutils.cxx
index 405a980c..d3a483db 100644
--- a/simgear/misc/strutils.cxx
+++ b/simgear/misc/strutils.cxx
@@ -674,7 +674,7 @@ std::string unescape(const char* s)
 
     } else if (*s >= '0' && *s <= '7') {
         int v = *s++ - '0';
-        for (int i = 0; i < 3 && *s >= '0' && *s <= '7'; i++, s++)
+        for (int i = 0; i < 2 && *s >= '0' && *s <= '7'; i++, s++)
             v = v * 8 + *s - '0';
         r += v;
         continue;
diff --git a/simgear/misc/strutils_test.cxx b/simgear/misc/strutils_test.cxx
index 073d474c..d2c19cd9 100644
--- a/simgear/misc/strutils_test.cxx
+++ b/simgear/misc/strutils_test.cxx
@@ -142,6 +142,8 @@ void test_split()
 void test_unescape()
 {
   SG_CHECK_EQUAL(strutils::unescape("\\ \\n\\t\\x41\\117a"), " \n\tAOa");
+  // Two chars: '\033' (ESC) followed by '2'
+  SG_CHECK_EQUAL(strutils::unescape("\\0332"), "\0332");
 }
 
 void test_compare_versions()