diff --git a/CHANGELOG b/CHANGELOG
index a8df558..fee3d3b 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,3 +1,5 @@
+* Fix `Template#evaluate` "eating" previous character if `null` was returned from `toTemplateReplacements` function. (Nir, Jürgen Hörmann, kangax)
+
 * Make sure (deficient) APPLET, OBJECT and EMBED elements are extended with simulated methods in IE8. Return early if `_extendedByPrototype` is present on an element. (Tobie Langel, kangax)
 
 * Replace array creation and `Array#include` with a more efficient `RegExp#test`. (kangax)
diff --git a/src/lang/template.js b/src/lang/template.js
index 9cb227d..292dd79 100644
--- a/src/lang/template.js
+++ b/src/lang/template.js
@@ -124,11 +124,11 @@ var Template = Class.create({
    *  with symbols replaced by `object`’s corresponding properties.
   **/
   evaluate: function(object) {
-    if (Object.isFunction(object.toTemplateReplacements))
+    if (object && Object.isFunction(object.toTemplateReplacements))
       object = object.toTemplateReplacements();
 
     return this.template.gsub(this.pattern, function(match) {
-      if (object == null) return '';
+      if (object == null) return (match[1] + '');
       
       var before = match[1] || '';
       if (before == '\\') return match[2];
diff --git a/test/unit/string_test.js b/test/unit/string_test.js
index 93308a4..6b910d9 100644
--- a/test/unit/string_test.js
+++ b/test/unit/string_test.js
@@ -342,6 +342,12 @@ new Test.Unit.Runner({
       toTemplateReplacements: function() { return { name: this.name, job: this.getJob() } }
     };
     this.assertEqual('My name is Stephan, my job is Web developer', new Template(source).evaluate(subject));
+    
+    var strActual = new Template('foo #{bar} baz').evaluate({
+      toTemplateReplacements: function(){ return null; }
+    });
+    this.assertIdentical('foo  baz', strActual);
+    this.assertIdentical('foo', new Template('foo#{bar}').evaluate(null));
   },
 
   testTemplateEvaluationCombined: function() {