diff --git a/e2e/tests-dfx/assetscanister.bash b/e2e/tests-dfx/assetscanister.bash
index c7497934ba..f90e3c1a46 100644
--- a/e2e/tests-dfx/assetscanister.bash
+++ b/e2e/tests-dfx/assetscanister.bash
@@ -3,14 +3,100 @@
 load ../utils/_
 
 setup() {
-    # We want to work from a temporary directory, different for every test.
-    cd "$(mktemp -d -t dfx-e2e-XXXXXXXX)" || exit
+    # We want to work from a different temporary directory for every test.
+    x=$(mktemp -d -t dfx-e2e-XXXXXXXX)
+    export TEMPORARY_HOME="$x"
+    export HOME="$TEMPORARY_HOME"
+    cd "$TEMPORARY_HOME" || exit
 
     dfx_new
 }
 
 teardown() {
     dfx_stop
+    rm -rf "$TEMPORARY_HOME"
+}
+
+@test "http_request percent-decodes urls" {
+    install_asset assetscanister
+
+    dfx_start
+
+    echo "contents of file with space in filename" >'src/e2e_project_assets/assets/filename with space.txt'
+    echo "contents of file with plus in filename" >'src/e2e_project_assets/assets/has+plus.txt'
+    echo "contents of file with percent in filename" >'src/e2e_project_assets/assets/has%percent.txt'
+    echo "filename is an ae symbol" >'src/e2e_project_assets/assets/æ'
+    echo "filename is percent symbol" >'src/e2e_project_assets/assets/%'
+    echo "filename contains question mark" >'src/e2e_project_assets/assets/filename?withqmark.txt'
+    dd if=/dev/urandom of='src/e2e_project_assets/assets/large with spaces.bin' bs=2500000 count=1
+
+
+    dfx deploy
+
+    # decode as expected
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/filename%20with%20space.txt";headers=vec{};method="GET";body=vec{}})'
+    assert_match "contents of file with space in filename"
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/has%2bplus.txt";headers=vec{};method="GET";body=vec{}})'
+    assert_match "contents of file with plus in filename"
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/has%2Bplus.txt";headers=vec{};method="GET";body=vec{}})'
+    assert_match "contents of file with plus in filename"
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/has%%percent.txt";headers=vec{};method="GET";body=vec{}})'
+    assert_match "contents of file with percent in filename"
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%e6";headers=vec{};method="GET";body=vec{}})'
+    assert_match "filename is an ae symbol" # candid looks like blob "filename is \c3\a6\0a"
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%%";headers=vec{};method="GET";body=vec{}})'
+    assert_match "filename is percent"
+     # this test ensures url decoding happens after removing the query string
+    assert_command dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/filename%3fwithqmark.txt";headers=vec{};method="GET";body=vec{}})'
+    assert_match "filename contains question mark"
+
+    # these error conditions can't be tested with curl, because something responds first with Bad Request.
+    assert_command_fail dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%";headers=vec{};method="GET";body=vec{}})'
+    assert_match "error decoding url: % must be followed by '%' or two hex digits"
+    assert_command_fail dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%z";headers=vec{};method="GET";body=vec{}})'
+    assert_match "error decoding url: % must be followed by two hex digits, but only one was found"
+    assert_command_fail dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%zz";headers=vec{};method="GET";body=vec{}})'
+    assert_match "error decoding url: neither character after % is a hex digit"
+    assert_command_fail dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%e";headers=vec{};method="GET";body=vec{}})'
+    assert_match "error decoding url: % must be followed by two hex digits, but only one was found"
+    assert_command_fail dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%g6";headers=vec{};method="GET";body=vec{}})'
+    assert_match "error decoding url: first character after % is not a hex digit"
+    assert_command_fail dfx canister --no-wallet call --query e2e_project_assets http_request '(record{url="/%ch";headers=vec{};method="GET";body=vec{}})'
+    assert_match "error decoding url: second character after % is not a hex digit"
+
+    ID=$(dfx canister id e2e_project_assets)
+    PORT=$(cat .dfx/webserver-port)
+
+    assert_command curl --fail -vv http://localhost:"$PORT"/filename%20with%20space.txt?canisterId="$ID"
+    # shellcheck disable=SC2154
+    assert_match "HTTP/1.1 200 OK" "$stderr"
+    assert_match "contents of file with space in filename"
+
+    assert_command curl --fail -vv http://localhost:"$PORT"/has%2bplus.txt?canisterId="$ID"
+    assert_match "HTTP/1.1 200 OK" "$stderr"
+    assert_match "contents of file with plus in filename"
+
+    assert_command curl --fail -vv http://localhost:"$PORT"/has%%percent.txt?canisterId="$ID"
+    assert_match "HTTP/1.1 200 OK" "$stderr"
+    assert_match "contents of file with percent in filename"
+
+    assert_command curl --fail -vv http://localhost:"$PORT"/%e6?canisterId="$ID"
+    assert_match "HTTP/1.1 200 OK" "$stderr"
+    assert_match "filename is an ae symbol"
+
+    assert_command curl --fail -vv http://localhost:"$PORT"/%%?canisterId="$ID"
+    assert_match "HTTP/1.1 200 OK" "$stderr"
+    assert_match "filename is percent symbol"
+
+    assert_command curl --fail -vv http://localhost:"$PORT"/filename%3fwithqmark.txt?canisterId="$ID"
+    assert_match "HTTP/1.1 200 OK" "$stderr"
+    assert_match "filename contains question mark"
+
+    assert_command curl --fail -vv --output lws-curl-output.bin "http://localhost:$PORT/large%20with%20spaces.bin?canisterId=$ID"
+    diff 'src/e2e_project_assets/assets/large with spaces.bin' lws-curl-output.bin
+
+    assert_command_fail curl --fail -vv http://localhost:"$PORT"/'filename with space'.txt?canisterId="$ID"
+    assert_match "400 Bad Request" "$stderr"
 }
 
 @test "generates gzipped content encoding for .js files" {
diff --git a/src/distributed/assetstorage/Main.mo b/src/distributed/assetstorage/Main.mo
index 6e6a57d4e1..0695e58a7d 100644
--- a/src/distributed/assetstorage/Main.mo
+++ b/src/distributed/assetstorage/Main.mo
@@ -402,7 +402,10 @@ shared ({caller = creator}) actor class () {
   };
 
   public query func http_request(request: T.HttpRequest): async T.HttpResponse {
-    let key = getKey(request.url);
+    let key = switch(urlDecode(getKey(request.url))) {
+      case (#ok(decoded)) decoded;
+      case (#err(msg)) throw Error.reject("error decoding url: " # msg);
+    };
     let acceptEncodings = getAcceptEncodings(request.headers);
 
     let assetAndEncoding: ?(A.Asset, A.AssetEncoding) = switch (getAssetAndEncoding(key, acceptEncodings)) {
@@ -530,4 +533,54 @@ shared ({caller = creator}) actor class () {
     }
   };
 
+  private func urlDecode(encoded: Text): Result.Result<Text, Text> {
+    var decoded = "";
+    let iter = Text.toIter(encoded);
+    loop {
+      switch (iter.next()) {
+        case null return #ok(decoded);
+        case (? '%') {
+          switch (iter.next()) {
+            case null return #err("% must be followed by '%' or two hex digits");
+            case (? '%') decoded #= "%";
+            case (?first) {
+              switch (iter.next()) {
+                case null return #err("% must be followed by two hex digits, but only one was found");
+                case (?second) {
+                  switch (hexCharAsNibble(first), hexCharAsNibble(second)) {
+                    case (?hi, ?lo) decoded #= Char.toText(Char.fromNat32(hi << 4 | lo));
+                    case (null, ?_) return #err("first character after % is not a hex digit");
+                    case (?_, null) return #err("second character after % is not a hex digit");
+                    case (null, null) return #err("neither character after % is a hex digit");
+                  };
+                };
+              };
+            };
+          };
+        };
+        case (?c) decoded #= Char.toText(c);
+      };
+    };
+  };
+
+  private func hexCharAsNibble(c: Char): ?Nat32 {
+    let n = Char.toNat32(c);
+
+    let asDigit = n -% Char.toNat32('0');
+    if (asDigit <= (9 : Nat32)) {
+      return ?asDigit;
+    };
+
+    let asLowerHexDigit = n -% Char.toNat32('a');
+    if (asLowerHexDigit <= (5 : Nat32)) {
+      return ?(0xA + asLowerHexDigit);
+    };
+
+    let asUpperHexDigit = n -% Char.toNat32('A');
+    if (asUpperHexDigit <= (5 : Nat32)) {
+      return ?(0xA + asUpperHexDigit);
+    };
+
+    null
+  };
 };