diff --git a/lib/internal/streams/readable.js b/lib/internal/streams/readable.js
index aad4c594501ba6..3f94ff92d84b6e 100644
--- a/lib/internal/streams/readable.js
+++ b/lib/internal/streams/readable.js
@@ -65,6 +65,7 @@ const {
     ERR_OUT_OF_RANGE,
     ERR_STREAM_PUSH_AFTER_EOF,
     ERR_STREAM_UNSHIFT_AFTER_END_EVENT,
+    ERR_UNKNOWN_ENCODING
   }
 } = require('internal/errors');
 const { validateObject } = require('internal/validators');
@@ -162,7 +163,14 @@ function ReadableState(options, stream, isDuplex) {
   // Crypto is kind of old and crusty.  Historically, its default string
   // encoding is 'binary' so we have to make this configurable.
   // Everything else in the universe uses 'utf8', though.
-  this.defaultEncoding = (options && options.defaultEncoding) || 'utf8';
+  const defaultEncoding = options?.defaultEncoding;
+  if (defaultEncoding == null) {
+    this.defaultEncoding = 'utf8';
+  } else if (Buffer.isEncoding(defaultEncoding)) {
+    this.defaultEncoding = defaultEncoding;
+  } else {
+    throw new ERR_UNKNOWN_ENCODING(defaultEncoding);
+  }
 
   // Ref the piped dest which we need a drain event on it
   // type: null | Writable | Set<Writable>.
diff --git a/test/parallel/test-stream-readable-default-encoding.js b/test/parallel/test-stream-readable-default-encoding.js
new file mode 100644
index 00000000000000..954f1643baad4c
--- /dev/null
+++ b/test/parallel/test-stream-readable-default-encoding.js
@@ -0,0 +1,37 @@
+'use strict';
+const common = require('../common');
+const assert = require('assert');
+const { Readable } = require('stream');
+
+{
+  assert.throws(() => {
+    new Readable({
+      read: () => {},
+      defaultEncoding: 'my invalid encoding',
+    });
+  }, {
+    code: 'ERR_UNKNOWN_ENCODING',
+  });
+}
+
+{
+  const r = new Readable({
+    read() {},
+    defaultEncoding: 'hex'
+  });
+
+  r.push('ab');
+
+  r.on('data', common.mustCall((chunk) => assert.strictEqual(chunk.toString('hex'), 'ab')), 1);
+}
+
+{
+  const r = new Readable({
+    read() {},
+    defaultEncoding: 'hex',
+  });
+
+  r.push('xy', 'utf-8');
+
+  r.on('data', common.mustCall((chunk) => assert.strictEqual(chunk.toString('utf-8'), 'xy')), 1);
+}