diff --git a/org.eclipse.jgit/src/org/eclipse/jgit/lib/BlobBasedConfig.java b/org.eclipse.jgit/src/org/eclipse/jgit/lib/BlobBasedConfig.java
index cbb2f5b85..7d52991df 100644
--- a/org.eclipse.jgit/src/org/eclipse/jgit/lib/BlobBasedConfig.java
+++ b/org.eclipse.jgit/src/org/eclipse/jgit/lib/BlobBasedConfig.java
@@ -79,7 +79,15 @@ public class BlobBasedConfig extends Config {
 	public BlobBasedConfig(Config base, final byte[] blob)
 			throws ConfigInvalidException {
 		super(base);
-		fromText(RawParseUtils.decode(blob));
+		final String decoded;
+		if (blob.length >= 3 && blob[0] == (byte) 0xEF
+				&& blob[1] == (byte) 0xBB && blob[2] == (byte) 0xBF) {
+			decoded = RawParseUtils.decode(RawParseUtils.UTF8_CHARSET,
+					blob, 3, blob.length);
+		} else {
+			decoded = RawParseUtils.decode(blob);
+		}
+		fromText(decoded);
 	}
 
 	/**