diff --git a/ChangeLog.md b/ChangeLog.md
--- a/ChangeLog.md
+++ b/ChangeLog.md
@@ -1,3 +1,7 @@
+## 0.8.20
+
+* Upgrade to libyaml 0.1.7
+
 ## 0.8.19.0
 
 * Add `Data.Yaml.TH` module
diff --git a/README.md b/README.md
--- a/README.md
+++ b/README.md
@@ -2,7 +2,7 @@
 
 Provides support for parsing and emitting Yaml documents.
 
-This package includes the [full libyaml C library version 0.1.5 by Kirill Simonov](http://pyyaml.org/wiki/LibYAML) in the package so you don't need to worry about any non-Haskell dependencies.
+This package includes the [full libyaml C library version 0.1.7 by Kirill Simonov](http://pyyaml.org/wiki/LibYAML) in the package so you don't need to worry about any non-Haskell dependencies.
 
 The package is broken down into two primary modules. `Data.Yaml` provides a high-level interface based around the JSON datatypes provided by the `aeson` package. `Text.Libyaml` provides a lower-level, streaming interface. For most users, `Data.Yaml` is recommended.
 
diff --git a/libyaml/api.c b/libyaml/api.c
--- a/libyaml/api.c
+++ b/libyaml/api.c
@@ -424,7 +424,7 @@
 {
     yaml_emitter_t *emitter = data;
 
-    if (emitter->output.string.size + *emitter->output.string.size_written
+    if (emitter->output.string.size - *emitter->output.string.size_written
             < size) {
         memcpy(emitter->output.string.buffer
                 + *emitter->output.string.size_written,
diff --git a/libyaml/scanner.c b/libyaml/scanner.c
--- a/libyaml/scanner.c
+++ b/libyaml/scanner.c
@@ -1106,13 +1106,6 @@
             && parser->indent == (ptrdiff_t)parser->mark.column);
 
     /*
-     * A simple key is required only when it is the first token in the current
-     * line.  Therefore it is always allowed.  But we add a check anyway.
-     */
-
-    assert(parser->simple_key_allowed || !required);    /* Impossible. */
-
-    /*
      * If the current position may start a simple key, save it.
      */
 
@@ -2629,6 +2622,9 @@
         /* Check if it is a URI-escape sequence. */
 
         if (CHECK(parser->buffer, '%')) {
+            if (!STRING_EXTEND(parser, string))
+                goto error;
+
             if (!yaml_parser_scan_uri_escapes(parser,
                         directive, start_mark, &string)) goto error;
         }
diff --git a/libyaml/yaml_private.h b/libyaml/yaml_private.h
--- a/libyaml/yaml_private.h
+++ b/libyaml/yaml_private.h
@@ -143,9 +143,12 @@
      (string).start = (string).pointer = (string).end = 0)
 
 #define STRING_EXTEND(context,string)                                           \
-    (((string).pointer+5 < (string).end)                                        \
+    ((((string).pointer+5 < (string).end)                                       \
         || yaml_string_extend(&(string).start,                                  \
-            &(string).pointer, &(string).end))
+            &(string).pointer, &(string).end)) ?                                \
+         1 :                                                                    \
+        ((context)->error = YAML_MEMORY_ERROR,                                  \
+         0))
 
 #define CLEAR(context,string)                                                   \
     ((string).pointer = (string).start,                                         \
@@ -655,7 +658,7 @@
      (node).data.mapping.pairs.top = (node_pairs_start),                        \
      (node).data.mapping.style = (node_style))
 
-#define YAML_VERSION_STRING "0.1.5"
+#define YAML_VERSION_STRING "0.1.7"
 #define YAML_VERSION_MAJOR 0
 #define YAML_VERSION_MINOR 1
-#define YAML_VERSION_PATCH 5
+#define YAML_VERSION_PATCH 7
diff --git a/yaml.cabal b/yaml.cabal
--- a/yaml.cabal
+++ b/yaml.cabal
@@ -1,5 +1,5 @@
 name:            yaml
-version:         0.8.19.0
+version:         0.8.20
 license:         BSD3
 license-file:    LICENSE
 author:          Michael Snoyman <michael@snoyman.com>, Anton Ageev <antage@gmail.com>,Kirill Simonov