diff --git a/lib/oga/xml/lexer.rb b/lib/oga/xml/lexer.rb
index 4b05b29..7038275 100644
--- a/lib/oga/xml/lexer.rb
+++ b/lib/oga/xml/lexer.rb
@@ -162,6 +162,20 @@ module Oga
         return !!html
       end
 
+      ##
+      # @return [TrueClass|FalseClass]
+      #
+      def html_script?
+        return html? && current_element == HTML_SCRIPT
+      end
+
+      ##
+      # @return [TrueClass|FalseClass]
+      #
+      def html_style?
+        return html? && current_element == HTML_STYLE
+      end
+
       private
 
       ##
@@ -194,20 +208,6 @@ module Oga
         return @elements.last
       end
 
-      ##
-      # @return [TrueClass|FalseClass]
-      #
-      def html_script?
-        return html? && current_element == HTML_SCRIPT
-      end
-
-      ##
-      # @return [TrueClass|FalseClass]
-      #
-      def html_style?
-        return html? && current_element == HTML_STYLE
-      end
-
       ##
       # Called when processing a single quote.
       #
diff --git a/lib/oga/xml/sax_parser.rb b/lib/oga/xml/sax_parser.rb
index 37bc910..2d4033b 100644
--- a/lib/oga/xml/sax_parser.rb
+++ b/lib/oga/xml/sax_parser.rb
@@ -128,6 +128,10 @@ module Oga
 
         key = ns ? "#{ns}:#{name}" : name
 
+        if value
+          value = EntityDecoder.try_decode(value, @lexer.html?)
+        end
+
         return {key => value}
       end
 
@@ -152,8 +156,30 @@ module Oga
         return merged
       end
 
+      ##
+      # @param [String] text
+      #
+      def on_text(text)
+        if @handler.respond_to?(:on_text)
+          unless inside_literal_html?
+            text = EntityDecoder.try_decode(text, @lexer.html?)
+          end
+
+          run_callback(:on_text, text)
+        end
+
+        return
+      end
+
       private
 
+      ##
+      # @return [TrueClass|FalseClass]
+      #
+      def inside_literal_html?
+        return @lexer.html_script? || @lexer.html_style?
+      end
+
       ##
       # @param [Symbol] method
       # @param [Array] args
diff --git a/spec/oga/xml/sax_parser_spec.rb b/spec/oga/xml/sax_parser_spec.rb
index e41baac..57deb46 100644
--- a/spec/oga/xml/sax_parser_spec.rb
+++ b/spec/oga/xml/sax_parser_spec.rb
@@ -58,6 +58,42 @@ describe Oga::XML::SaxParser do
 
       handler.attrs.should == {'b' => '10', 'x:c' => '20'}
     end
+
+    describe 'when parsing XML documents' do
+      it 'decodes XML entities in text nodes' do
+        handler = Class.new do
+          attr_reader :text
+
+          def on_text(text)
+            @text = text
+          end
+        end.new
+
+        parser = described_class.new(handler, '<')
+
+        parser.parse
+
+        handler.text.should == '<'
+      end
+    end
+
+    describe 'when parsing HTML documents' do
+      it 'decodes HTML entities in text nodes' do
+        handler = Class.new do
+          attr_reader :text
+
+          def on_text(text)
+            @text = text
+          end
+        end.new
+
+        parser = described_class.new(handler, '&nbsp;', :html => true)
+
+        parser.parse
+
+        handler.text.should == Oga::HTML::Entities::DECODE_MAPPING['&nbsp;']
+      end
+    end
   end
 
   describe '#on_attribute' do
@@ -84,6 +120,29 @@ describe Oga::XML::SaxParser do
 
       hash.should == {'FOO' => 'bar'}
     end
+
+    describe 'when parsing an XML document' do
+      it 'decodes XML entities' do
+        parser = described_class.new(@handler_without, '<a a="&lt;" />')
+        hash   = parser.on_attribute('a', nil, '&lt;')
+
+        hash.should == {'a' => '<'}
+      end
+    end
+
+    describe 'when parsing an HTML document' do
+      it 'decodes HTML entities' do
+        parser = described_class.new(
+          @handler_without,
+          '<a a="&nbsp;" />',
+          :html => true
+        )
+
+        hash = parser.on_attribute('a', nil, '&nbsp;')
+
+        hash.should == {'a' => Oga::HTML::Entities::DECODE_MAPPING['&nbsp;']}
+      end
+    end
   end
 
   describe '#on_attributes' do
@@ -111,4 +170,79 @@ describe Oga::XML::SaxParser do
       retval.should == %w{Alice Bob}
     end
   end
+
+  describe '#on_text' do
+    it 'invokes a custom on_text callback if defined' do
+      handler = Class.new do
+        attr_reader :text
+
+        def on_text(text)
+          @text = text.upcase
+        end
+      end.new
+
+      parser = described_class.new(handler, nil)
+
+      parser.on_text('foo')
+
+      handler.text.should == 'FOO'
+    end
+
+    describe 'when parsing an XML document' do
+      before do
+        @handler = Class.new do
+          attr_reader :text
+
+          def on_text(text)
+            @text = text
+          end
+        end.new
+
+        @parser = described_class.new(@handler, nil)
+      end
+
+      it 'decodes XML entities' do
+        @parser.on_text('&lt;')
+
+        @handler.text.should == '<'
+      end
+    end
+
+    describe 'when parsing an HTML document' do
+      before do
+        @handler = Class.new do
+          attr_reader :text
+
+          def on_text(text)
+            @text = text
+          end
+        end.new
+
+        @parser = described_class.new(@handler, nil, :html => true)
+      end
+
+      it 'decodes HTML entities' do
+        @parser.on_text('&nbsp;')
+
+        @handler.text.should ==
+          Oga::HTML::Entities::DECODE_MAPPING['&nbsp;']
+      end
+
+      it 'does not decode HTML entities of script tags' do
+        @parser.stub(:inside_literal_html?).and_return(true)
+
+        @parser.on_text('&nbsp;')
+
+        @handler.text.should == '&nbsp;'
+      end
+
+      it 'does not decode HTML entities of style tags' do
+        @parser.stub(:inside_literal_html?).and_return(true)
+
+        @parser.on_text('&nbsp;')
+
+        @handler.text.should == '&nbsp;'
+      end
+    end
+  end
 end