diff --git a/lib/api/readable.js b/lib/api/readable.js
index 5ebd04ebe83..61cae82b12f 100644
--- a/lib/api/readable.js
+++ b/lib/api/readable.js
@@ -3,6 +3,7 @@
 const assert = require('node:assert')
 const { addAbortListener } = require('node:events')
 const { Readable } = require('node:stream')
+const { StringDecoder } = require('node:string_decoder')
 const { RequestAbortedError, NotSupportedError, InvalidArgumentError, AbortError } = require('../core/errors')
 const util = require('../core/util')
 const { ReadableStreamFrom } = require('../core/util')
@@ -15,6 +16,9 @@ const kContentType = Symbol('kContentType')
 const kContentLength = Symbol('kContentLength')
 const kUsed = Symbol('kUsed')
 const kBytesRead = Symbol('kBytesRead')
+const kDecoder = Symbol('kDecoder')
+const kEncoding = Symbol('kEncoding')
+const kDecoderEnded = Symbol('kDecoderEnded')
 
 const noop = () => {}
 
@@ -55,6 +59,15 @@ class BodyReadable extends Readable {
     /** @type {number} */
     this[kBytesRead] = 0
 
+    /** @type {StringDecoder|null} */
+    this[kDecoder] = null
+
+    /** @type {BufferEncoding|undefined} */
+    this[kEncoding] = undefined
+
+    /** @type {boolean} */
+    this[kDecoderEnded] = false
+
     /** @type {ReadableStream|null} */
     this[kBody] = null
 
@@ -161,11 +174,39 @@ class BodyReadable extends Readable {
         consumePush(this[kConsume], chunk)
         return this[kReading] ? super.push(chunk) : true
       }
+
+      return super.push(chunk)
     }
 
     return super.push(chunk)
   }
 
+  /**
+   * @param {number} [size]
+   * @returns {Buffer|string|null}
+   */
+  read (size) {
+    const chunk = super.read(size)
+
+    if (!this[kDecoder]) {
+      return chunk
+    }
+
+    if (chunk !== null) {
+      return this[kDecoder].write(chunk)
+    }
+
+    if (this._readableState.endEmitted && !this[kDecoderEnded]) {
+      this[kDecoderEnded] = true
+      const tail = this[kDecoder].end()
+      if (tail !== '') {
+        return tail
+      }
+    }
+
+    return chunk
+  }
+
   /**
    * Consumes and returns the body as a string.
    *
@@ -324,10 +365,22 @@ class BodyReadable extends Readable {
    * @returns {this}
    */
   setEncoding (encoding) {
+    const state = this._readableState
+    const buffer = state.buffer.slice()
+    const bufferIndex = state.bufferIndex
+    const length = state.length
+    const ret = super.setEncoding(encoding)
     if (Buffer.isEncoding(encoding)) {
-      this._readableState.encoding = encoding
+      const decoder = new StringDecoder(encoding)
+      this[kDecoder] = decoder
+      this[kEncoding] = decoder.encoding
+      state.buffer = buffer
+      state.bufferIndex = bufferIndex
+      state.length = length
+      state.decoder = null
+      state.encoding = null
     }
-    return this
+    return ret
   }
 }
 
@@ -396,6 +449,11 @@ function consume (stream, type) {
         reject(rState.errored ?? new TypeError('unusable'))
       }
     } else {
+      if (stream[kEncoding]) {
+        stream._readableState.decoder = null
+        stream._readableState.encoding = null
+      }
+
       queueMicrotask(() => {
         stream[kConsume] = {
           type,
@@ -432,6 +490,10 @@ function consumeStart (consume) {
   }
 
   const { _readableState: state } = consume.stream
+  if (consume.stream[kEncoding]) {
+    state.decoder = null
+    state.encoding = null
+  }
 
   if (state.bufferIndex) {
     const start = state.bufferIndex
@@ -446,10 +508,10 @@ function consumeStart (consume) {
   }
 
   if (state.endEmitted) {
-    consumeEnd(this[kConsume], this._readableState.encoding)
+    consumeEnd(this[kConsume], this[kEncoding])
   } else {
     consume.stream.on('end', function () {
-      consumeEnd(this[kConsume], this._readableState.encoding)
+      consumeEnd(this[kConsume], this[kEncoding])
     })
   }
 
@@ -546,6 +608,9 @@ function consumeEnd (consume, encoding) {
  * @returns {void}
  */
 function consumePush (consume, chunk) {
+  if (typeof chunk === 'string') {
+    chunk = Buffer.from(chunk, consume.stream[kEncoding])
+  }
   consume.length += chunk.length
   consume.body.push(chunk)
 }
diff --git a/test/client-request.js b/test/client-request.js
index 3e154aca6b1..22007c5d947 100644
--- a/test/client-request.js
+++ b/test/client-request.js
@@ -1494,6 +1494,39 @@ test('request multibyte text with setEncoding', async (t) => {
   await t.completed
 })
 
+test('request multibyte text with async iteration and setEncoding', async (t) => {
+  t = tspl(t, { plan: 1 })
+
+  const data = Buffer.from('abc傳def')
+  const server = createServer({ joinDuplicateHeaders: true }, (req, res) => {
+    res.write(data.subarray(0, 5))
+    setTimeout(() => {
+      res.end(data.subarray(5))
+    }, 100)
+  })
+  after(server.close.bind(server))
+
+  server.listen(0, async () => {
+    const client = new Client(`http://localhost:${server.address().port}`)
+    after(client.destroy.bind(client))
+
+    const { body } = await client.request({
+      path: '/',
+      method: 'GET'
+    })
+    body.setEncoding('utf8')
+
+    let text = ''
+    for await (const chunk of body) {
+      text += chunk
+    }
+
+    t.deepStrictEqual(text, data.toString('utf8'))
+  })
+
+  await t.completed
+})
+
 test('request multibyte text with setEncoding', async (t) => {
   t = tspl(t, { plan: 1 })