diff --git a/index.js b/index.js
index cb3697b1..25f90d02 100644
--- a/index.js
+++ b/index.js
@@ -6,6 +6,9 @@
 var domToReact = require('./lib/dom-to-react');
 var htmlToDOM = require('html-dom-parser');
 
+// decode HTML entities by default for `htmlparser2`
+var domParserOptions = { decodeEntities: true };
+
 /**
  * Convert HTML string to React elements.
  *
@@ -18,7 +21,7 @@ function HTMLReactParser(html, options) {
     if (typeof html !== 'string') {
         throw new TypeError('First argument must be a string');
     }
-    return domToReact(htmlToDOM(html), options);
+    return domToReact(htmlToDOM(html, domParserOptions), options);
 }
 
 /**
diff --git a/test/html-to-react.js b/test/html-to-react.js
index 156866d9..388a6ff1 100644
--- a/test/html-to-react.js
+++ b/test/html-to-react.js
@@ -78,6 +78,13 @@ describe('html-to-react', function() {
             assert.equal(render(reactElement), svg);
         });
 
+        it('decodes HTML entities', function() {
+            var encodedEntities = 'asdf & ÿ ü '';
+            var decodedEntities = 'asdf & ÿ ü \'';
+            var reactElement = Parser('<i>' + encodedEntities + '</i>');
+            assert.equal(reactElement.props.children, decodedEntities);
+        });
+
     });
 
     /**