diff --git a/.changeset/wild-coins-live.md b/.changeset/wild-coins-live.md
new file mode 100644
index 000000000000..b6b989ba8425
--- /dev/null
+++ b/.changeset/wild-coins-live.md
@@ -0,0 +1,5 @@
+---
+'@sveltejs/kit': patch
+---
+
+fix: correctly navigate when hash router is enabled and the browser encodes extra hashes
diff --git a/packages/kit/src/runtime/client/client.js b/packages/kit/src/runtime/client/client.js
index c91bb818355b..56c3855aa436 100644
--- a/packages/kit/src/runtime/client/client.js
+++ b/packages/kit/src/runtime/client/client.js
@@ -306,7 +306,7 @@ export async function start(_app, _target, hydrate) {
 	if (hydrate) {
 		await _hydrate(target, hydrate);
 	} else {
-		goto(location.href, { replaceState: true });
+		goto(app.hash ? decodeURIComponent(location.href) : location.href, { replaceState: true });
 	}
 
 	_start_router();
@@ -2395,7 +2395,7 @@ function _start_router() {
 			// (surprisingly!) mutates `current.url`, allowing us to
 			// detect it and trigger a navigation
 			if (current.url.hash === location.hash) {
-				navigate({ type: 'goto', url: current.url });
+				navigate({ type: 'goto', url: new URL(decodeURIComponent(current.url.href)) });
 			}
 		}
 	});
diff --git a/packages/kit/test/apps/hash-based-routing/test/test.js b/packages/kit/test/apps/hash-based-routing/test/test.js
index ae379c55f601..6743639fec2c 100644
--- a/packages/kit/test/apps/hash-based-routing/test/test.js
+++ b/packages/kit/test/apps/hash-based-routing/test/test.js
@@ -55,6 +55,14 @@ test.describe('hash based navigation', () => {
 		await expect(page.locator('p')).toHaveText('a');
 	});
 
+	test('navigation works with URL encoded characters', async ({ page }) => {
+		await page.goto('/#/%23test');
+		await expect(page.locator('p')).toHaveText('home');
+		// hashchange event
+		await page.goto('/#/a%23test');
+		await expect(page.locator('p')).toHaveText('a');
+	});
+
 	test('route id and params are correct', async ({ page }) => {
 		await page.goto('/#/b/123');
 		await expect(page.locator('p[data-data]')).toHaveText('{"slug":"123"} /b/[slug] /#/b/123');