You need to escape your backslash:

p.sub('gray \\1', s)

alternatively you can use a raw string as you already did for the regex:

p.sub(r'gray \1', s)

One solution is to use positive lookahead as follows.

import re
p = re.compile(ur'(\-abc)(?=\.jpg)')
test_str = u"-abc1234567-abc.jpg"
subst = u""

result = re.sub(p, subst, test_str)  

OR

You can use two capture groups as follows.

import re
p = re.compile(ur'(\-abc)(\.jpg)')
test_str = u"-abc1234567-abc.jpg"
subst = r"\2"

result = re.sub(p, subst, test_str)

This is a completely backwards use of regex. The point of capture groups is to hold text you want to keep, not text you want to replace.

Since you've written your regex the wrong way, you have to do most of the substitution operation manually:

"""
Replaces the text captured by named groups.
"""
def replace_groups(pattern, string, replacements):
    pattern = re.compile(pattern)
    # create a dict of {group_index: group_name} for use later
    groupnames = {index: name for name, index in pattern.groupindex.items()}

    def repl(match):
        # we have to split the matched text into chunks we want to keep and
        # chunks we want to replace
        # captured text will be replaced. uncaptured text will be kept.
        text = match.group()
        chunks = []
        lastindex = 0
        for i in range(1, pattern.groups+1):
            groupname = groupnames.get(i)
            if groupname not in replacements:
                continue

            # keep the text between this match and the last
            chunks.append(text[lastindex:match.start(i)])
            # then instead of the captured text, insert the replacement text for this group
            chunks.append(replacements[groupname])
            lastindex = match.end(i)
        chunks.append(text[lastindex:])
        # join all the junks to obtain the final string with replacements
        return ''.join(chunks)

    # for each occurence call our custom replacement function
    return re.sub(pattern, repl, string)

>>> replace_groups(pattern, s, {'d': 'aaa', 'm': 'bbb', 'Y': 'ccc'})
'monthday=aaa, month=bbb, year=ccc'

Have a look at re.sub:

result = re.sub(r"(\d.*?)\s(\d.*?)", r"\1 \2", string1)

This is Python's regex substitution (replace) function. The replacement string can be filled with so-called backreferences (backslash, group number) which are replaced with what was matched by the groups. Groups are counted the same as by the group(...) function, i.e. starting from 1, from left to right, by opening parentheses.