diff --git a/CHANGES b/CHANGES
index f3840268b..fd1d08bb7 100644
--- a/CHANGES
+++ b/CHANGES
@@ -76,6 +76,12 @@ Release 1.0 (in development)
 * Added ``htmltitle`` block in layout template.
 
 
+Release 0.6.5 (in development)
+==============================
+
+* #321: Fix link generation in the LaTeX builder.
+
+
 Release 0.6.4 (Jan 12, 2010)
 ============================
 
diff --git a/sphinx/themes/default/static/default.css_t b/sphinx/themes/default/static/default.css_t
index 04562d961..495cccdb9 100644
--- a/sphinx/themes/default/static/default.css_t
+++ b/sphinx/themes/default/static/default.css_t
@@ -210,6 +210,18 @@ div.admonition p.admonition-title + p {
     display: inline;
 }
 
+div.admonition p {
+    margin-bottom: 5px;
+}
+
+div.admonition pre {
+    margin-bottom: 5px;
+}
+
+div.admonition ul, div.admonition ol {
+    margin-bottom: 5px;
+}
+
 div.note {
     background-color: #eee;
     border: 1px solid #ccc;
diff --git a/sphinx/writers/latex.py b/sphinx/writers/latex.py
index 35e393c54..59658f1a0 100644
--- a/sphinx/writers/latex.py
+++ b/sphinx/writers/latex.py
@@ -1045,13 +1045,15 @@ class LaTeXTranslator(nodes.NodeVisitor):
             self.body.append('\\href{%s}{' % self.encode_uri(uri))
             self.context.append('}')
         elif uri.startswith('#'):
-            self.body.append('\\hyperlink{%s}{' % uri[1:])
+            # references to labels
+            self.body.append('\\hyperlink{%s}{' % self.idescape(uri[1:]))
             self.context.append('}')
         elif uri.startswith('%'):
+            # references to documents or labels inside documents
             hashindex = uri.find('#')
             targetname = (hashindex == -1) and '--doc-' + uri[1:] \
                                            or uri[hashindex+1:]
-            self.body.append('\\hyperlink{%s}{' % targetname)
+            self.body.append('\\hyperlink{%s}{' % self.idescape(targetname))
             self.context.append('}')
         elif uri.startswith('@token'):
             if self.in_production_list: