diff --git a/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/HgConfig.java b/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/HgConfig.java
index a3210b4f14..1ff338a7fd 100644
--- a/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/HgConfig.java
+++ b/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/HgConfig.java
@@ -57,6 +57,17 @@ public class HgConfig extends SimpleRepositoryConfig
 
   //~--- get methods ----------------------------------------------------------
 
+  /**
+   * Method description
+   *
+   *
+   * @return
+   */
+  public String getEncoding()
+  {
+    return encoding;
+  }
+
   /**
    * Method description
    *
@@ -111,11 +122,22 @@ public class HgConfig extends SimpleRepositoryConfig
   public boolean isValid()
   {
     return super.isValid() && Util.isNotEmpty(hgBinary)
-           && Util.isNotEmpty(pythonBinary);
+      && Util.isNotEmpty(pythonBinary);
   }
 
   //~--- set methods ----------------------------------------------------------
 
+  /**
+   * Method description
+   *
+   *
+   * @param encoding
+   */
+  public void setEncoding(String encoding)
+  {
+    this.encoding = encoding;
+  }
+
   /**
    * Method description
    *
@@ -162,6 +184,9 @@ public class HgConfig extends SimpleRepositoryConfig
 
   //~--- fields ---------------------------------------------------------------
 
+  /** Field description */
+  private String encoding = "UTF-8";
+
   /** Field description */
   private String hgBinary;
 
diff --git a/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/spi/HgCommandContext.java b/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/spi/HgCommandContext.java
index 7c61381149..073cef716d 100644
--- a/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/spi/HgCommandContext.java
+++ b/scm-plugins/scm-hg-plugin/src/main/java/sonia/scm/repository/spi/HgCommandContext.java
@@ -38,6 +38,11 @@ package sonia.scm.repository.spi;
 import com.aragost.javahg.Repository;
 import com.aragost.javahg.RepositoryConfiguration;
 
+import com.google.common.base.Charsets;
+
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+
 import sonia.scm.repository.HgConfig;
 import sonia.scm.repository.spi.javahg.HgFileviewExtension;
 
@@ -47,6 +52,8 @@ import java.io.Closeable;
 import java.io.File;
 import java.io.IOException;
 
+import java.nio.charset.Charset;
+
 /**
  *
  * @author Sebastian Sdorra
@@ -54,6 +61,14 @@ import java.io.IOException;
 public class HgCommandContext implements Closeable
 {
 
+  /**
+   * the logger for HgCommandContext
+   */
+  private static final Logger logger =
+    LoggerFactory.getLogger(HgCommandContext.class);
+
+  //~--- constructors ---------------------------------------------------------
+
   /**
    * Constructs ...
    *
@@ -99,6 +114,22 @@ public class HgCommandContext implements Closeable
 
       repoConfiguration.addExtension(HgFileviewExtension.class);
 
+      try
+      {
+        Charset charset = Charset.forName(config.getEncoding());
+
+        if (logger.isTraceEnabled())
+        {
+          logger.trace("set encoding {} for mercurial", config.getEncoding());
+        }
+
+        repoConfiguration.setEncoding(charset);
+      }
+      catch (IllegalArgumentException ex)
+      {
+        logger.error("could not set encoding for mercurial", ex);
+      }
+
       repoConfiguration.setHgBin(config.getHgBinary());
       repository = Repository.open(repoConfiguration, directory);
     }
diff --git a/scm-plugins/scm-hg-plugin/src/main/resources/sonia/scm/hg.config.js b/scm-plugins/scm-hg-plugin/src/main/resources/sonia/scm/hg.config.js
index d7c6fe0950..8c6900fd74 100644
--- a/scm-plugins/scm-hg-plugin/src/main/resources/sonia/scm/hg.config.js
+++ b/scm-plugins/scm-hg-plugin/src/main/resources/sonia/scm/hg.config.js
@@ -43,6 +43,7 @@ Sonia.hg.ConfigPanel = Ext.extend(Sonia.config.ConfigForm, {
   useOptimizedBytecodeText: 'Optimized Bytecode (.pyo)',
   configWizardText: 'Start Configuration Wizard',
   configWizardLabelText: 'Start Configuration Wizard',
+  encodingText: 'Encoding',
   disabledText: 'Disabled',
 
   // helpText
@@ -51,6 +52,7 @@ Sonia.hg.ConfigPanel = Ext.extend(Sonia.config.ConfigForm, {
   pythonPathHelpText: 'Python Module Search Path (PYTHONPATH).',
   repositoryDirectoryHelpText: 'Location of the Mercurial repositories.',
   useOptimizedBytecodeHelpText: 'Use the Python "-O" switch.',
+  encodingHelpText: 'Repository Encoding.',
   disabledHelpText: 'Enable or disable the Mercurial plugin. \n\
                     Note you have to reload the page, after changing this value.',
 
@@ -81,6 +83,12 @@ Sonia.hg.ConfigPanel = Ext.extend(Sonia.config.ConfigForm, {
         fieldLabel: this.repositoryDirectoryText,
         helpText: this.repositoryDirectoryHelpText,
         allowBlank : false
+      },{
+        xtype: 'textfield',
+        name: 'encoding',
+        fieldLabel: this.encodingText,
+        helpText: this.encodingHelpText,
+        allowBlank : false
       },{
         xtype: 'checkbox',
         name: 'useOptimizedBytecode',