diff --git a/lib/ansible/plugins/inventory/azure_rm.py b/lib/ansible/plugins/inventory/azure_rm.py
index edc4017451..6beef88a2f 100644
--- a/lib/ansible/plugins/inventory/azure_rm.py
+++ b/lib/ansible/plugins/inventory/azure_rm.py
@@ -156,7 +156,7 @@ from ansible.module_utils.six import iteritems
 from ansible.module_utils.azure_rm_common import AzureRMAuth
 from ansible.errors import AnsibleParserError, AnsibleError
 from ansible.module_utils.parsing.convert_bool import boolean
-from ansible.module_utils._text import to_native
+from ansible.module_utils._text import to_native, to_bytes
 from itertools import chain
 from msrest import ServiceClient, Serializer, Deserializer
 from msrestazure import AzureConfiguration
@@ -450,7 +450,7 @@ class AzureHost(object):
         self.nics = []
 
         # Azure often doesn't provide a globally-unique filename, so use resource name + a chunk of ID hash
-        self.default_inventory_hostname = '{0}_{1}'.format(vm_model['name'], hashlib.sha1(vm_model['id']).hexdigest()[0:4])
+        self.default_inventory_hostname = '{0}_{1}'.format(vm_model['name'], hashlib.sha1(to_bytes(vm_model['id'])).hexdigest()[0:4])
 
         self._hostvars = {}