diff --git a/nodes/core/core/80-template.js b/nodes/core/core/80-template.js
index 85efaccbe..02d34e9b9 100644
--- a/nodes/core/core/80-template.js
+++ b/nodes/core/core/80-template.js
@@ -22,9 +22,10 @@ module.exports = function(RED) {
      * Custom Mustache Context capable to resolve message property and node
      * flow and global context
      */
-    function NodeContext(msg, nodeContext,parent) {
+    function NodeContext(msg, nodeContext, parent, escapeStrings) {
         this.msgContext = new mustache.Context(msg,parent);
         this.nodeContext = nodeContext;
+        this.escapeStrings = escapeStrings;
     }
 
     NodeContext.prototype = new mustache.Context();
@@ -34,6 +35,14 @@ module.exports = function(RED) {
         try {
             var value = this.msgContext.lookup(name);
             if (value !== undefined) {
+                if (this.escapeStrings && typeof value === "string") {
+                    value = value.replace(/\\/g, "\\\\");
+                    value = value.replace(/\n/g, "\\n");
+                    value = value.replace(/\t/g, "\\t");
+                    value = value.replace(/\r/g, "\\r");
+                    value = value.replace(/\f/g, "\\f");
+                    value = value.replace(/[\b]/g, "\\b");
+                }
                 return value;
             }
 
@@ -73,7 +82,11 @@ module.exports = function(RED) {
             try {
                 var value;
                 if (node.syntax === "mustache") {
-                    value = mustache.render(node.template,new NodeContext(msg, node.context()));
+                    if (node.outputFormat === "json") {
+                        value = mustache.render(node.template,new NodeContext(msg, node.context(), null, true));
+                    } else {
+                        value = mustache.render(node.template,new NodeContext(msg, node.context(), null, false));
+                    }
                 } else {
                     value = node.template;
                 }
diff --git a/test/nodes/core/core/80-template_spec.js b/test/nodes/core/core/80-template_spec.js
index 811e7f179..b59c0f46c 100644
--- a/test/nodes/core/core/80-template_spec.js
+++ b/test/nodes/core/core/80-template_spec.js
@@ -88,6 +88,18 @@ describe('template node', function() {
         });
     });
 
+    it('should handle escape characters in Mustache format and JSON output mode', function(done) {
+        var flow = [{id:"n1", type:"template", field:"payload", syntax:"mustache", template:"{\"data\":\"{{payload}}\"}", output:"json", wires:[["n2"]]},{id:"n2",type:"helper"}];
+        helper.load(templateNode, flow, function() {
+            var n1 = helper.getNode("n1");
+            var n2 = helper.getNode("n2");
+            n2.on("input", function(msg) {
+                msg.payload.should.have.property('data', 'line\t1\nline\\2\r\nline\b3\f');
+                done();
+            });
+            n1.receive({payload:"line\t1\nline\\2\r\nline\b3\f"});
+        });
+    });
 
     it('should modify payload in plain text mode', function(done) {
         var flow = [{id:"n1", type:"template", field:"payload", syntax:"plain", template:"payload={{payload}}",wires:[["n2"]]},{id:"n2",type:"helper"}];