diff --git a/lib/fs.js b/lib/fs.js
index 3ccc2b31c8..415d92d368 100644
--- a/lib/fs.js
+++ b/lib/fs.js
@@ -637,17 +637,8 @@ sys.inherits(ReadStream, events.EventEmitter);
 fs.FileReadStream = fs.ReadStream; // support the legacy name
 
 ReadStream.prototype.setEncoding = function (encoding) {
-  var Utf8Decoder = require("utf8decoder").Utf8Decoder; // lazy load
-  var self = this;
-  this._encoding = encoding.toLowerCase();
-  if (this._encoding == 'utf-8' || this._encoding == 'utf8') {
-    this._decoder = new Utf8Decoder();
-    this._decoder.onString = function(str) {
-      self.emit('data', str);
-    };
-  } else if (this._decoder) {
-    delete this._decoder;
-  }
+  var StringDecoder = require("string_decoder").StringDecoder; // lazy load
+  this._decoder = new StringDecoder(encoding);
 };
 
 
@@ -707,13 +698,11 @@ ReadStream.prototype._read = function () {
 
 
 ReadStream.prototype._emitData = function (d) {
-  if (!this._encoding) {
-    this.emit('data', d);
-  } else if (this._decoder) {
-    this._decoder.write(d);
+  if (this._decoder) {
+    var string = this._decoder.write(d);
+    if (string.length) this.emit('data', string);
   } else {
-    var string = d.toString(this._encoding, 0, d.length);
-    this.emit('data', string);
+    this.emit('data', d);
   }
 };
 
diff --git a/lib/http.js b/lib/http.js
index 1cf9ecaf1e..b5a9a1bdcb 100644
--- a/lib/http.js
+++ b/lib/http.js
@@ -9,7 +9,6 @@ if (debugLevel & 0x4) {
 }
 
 var net = require('net');
-var Utf8Decoder = require('utf8decoder').Utf8Decoder;
 var events = require('events');
 var Buffer = require('buffer').Buffer;
 
@@ -93,14 +92,12 @@ var parsers = new FreeList('parsers', 1000, function () {
 
   parser.onBody = function (b, start, len) {
     // TODO body encoding?
-    var enc = parser.incoming._encoding;
-    if (!enc) {
-      parser.incoming.emit('data', b.slice(start, start+len));
-    } else if (this._decoder) {
-      this._decoder.write(pool.slice(start, end));
+    var slice = b.slice(start, start+len);
+    if (parser.incoming._decoder) {
+      var string = parser.incoming._decoder.write(slice);
+      if (string.length) parser.incoming.emit('data', string);
     } else {
-      var string = b.toString(enc, start, start+len);
-      parser.incoming.emit('data', string);
+      parser.incoming.emit('data', slice);
     }
   };
 
@@ -217,18 +214,9 @@ IncomingMessage.prototype.setBodyEncoding = function (enc) {
   this.setEncoding(enc);
 };
 
-IncomingMessage.prototype.setEncoding = function (enc) {
-  // TODO check values, error out on bad, and deprecation message?
-  this._encoding = enc.toLowerCase();
-  if (this._encoding == 'utf-8' || this._encoding == 'utf8') {
-    this._decoder = new Utf8Decoder();
-    this._decoder.onString = function(str) {
-      this.emit('data', str);
-    };
-  } else if (this._decoder) {
-    delete this._decoder;
-  }
-
+IncomingMessage.prototype.setEncoding = function (encoding) {
+  var StringDecoder = require("string_decoder").StringDecoder; // lazy load
+  this._decoder = new StringDecoder(encoding);
 };
 
 IncomingMessage.prototype.pause = function () {
diff --git a/lib/net.js b/lib/net.js
index ac5f56825c..716326a57b 100644
--- a/lib/net.js
+++ b/lib/net.js
@@ -1,6 +1,5 @@
 var sys = require("sys");
 var fs = require("fs");
-var Utf8Decoder = require("utf8decoder").Utf8Decoder;
 var events = require("events");
 var dns = require('dns');
 
@@ -500,20 +499,20 @@ function initStream (self) {
       var end = pool.used + bytesRead;
       pool.used += bytesRead;
 
-      if (!self._encoding) {
+      if (self._decoder) {
+        // emit String
+        var string = self._decoder.write(pool.slice(start, end));
+        if (string.length) self.emit('data', string);
+      } else {
+        // emit buffer
         if (self._events && self._events['data']) {
           // emit a slice
           self.emit('data', pool.slice(start, end));
         }
-
-        // Optimization: emit the original buffer with end points
-        if (self.ondata) self.ondata(pool, start, end);
-      } else if (this._decoder) {
-        this._decoder.write(pool.slice(start, end));
-      } else {
-        var string = pool.toString(self._encoding, start, end);
-        self.emit('data', string);
       }
+
+      // Optimization: emit the original buffer with end points
+      if (self.ondata) self.ondata(pool, start, end);
     }
   };
   self.readable = false;
@@ -828,18 +827,9 @@ Stream.prototype._writeQueueLast = function () {
 };
 
 
-Stream.prototype.setEncoding = function (enc) {
-  var self = this;
-  // TODO check values, error out on bad, and deprecation message?
-  this._encoding = enc.toLowerCase();
-  if (this._encoding == 'utf-8' || this._encoding == 'utf8') {
-    this._decoder = new Utf8Decoder();
-    this._decoder.onString = function(str) {
-      self.emit('data', str);
-    };
-  } else if (this._decoder) {
-    delete this._decoder;
-  }
+Stream.prototype.setEncoding = function (encoding) {
+  var StringDecoder = require("string_decoder").StringDecoder; // lazy load
+  this._decoder = new StringDecoder(encoding);
 };
 
 
diff --git a/lib/utf8decoder.js b/lib/string_decoder.js
similarity index 67%
rename from lib/utf8decoder.js
rename to lib/string_decoder.js
index cd2bb9672e..2c7ace0ae5 100644
--- a/lib/utf8decoder.js
+++ b/lib/string_decoder.js
@@ -1,12 +1,21 @@
 var Buffer = require('buffer').Buffer;
 
-var Utf8Decoder = exports.Utf8Decoder = function() {
-  this.charBuffer = new Buffer(4);
-  this.charReceived = 0;
-  this.charLength = 0;
+var StringDecoder = exports.StringDecoder = function (encoding) {
+  this.encoding = (encoding || 'utf8').toLowerCase().replace(/[-_]/,'');
+  if (this.encoding === 'utf8') {
+    this.charBuffer = new Buffer(4);
+    this.charReceived = 0;
+    this.charLength = 0;
+  }
 };
 
-Utf8Decoder.prototype.write = function(buffer) {
+
+StringDecoder.prototype.write = function (buffer) {
+  // If not utf8... 
+  if (this.encoding !== 'utf8') {
+    return buffer.toString(this.encoding);
+  }
+
   var charStr = '';
   // if our last write ended with an incomplete multibyte character
   if (this.charLength) {
@@ -21,28 +30,23 @@ Utf8Decoder.prototype.write = function(buffer) {
 
     if (this.charReceived < this.charLength) {
       // still not enough chars in this buffer? wait for more ...
-      return;
+      return '';
     }
 
     // get the character that was split
     charStr = this.charBuffer.slice(0, this.charLength).toString();
     this.charReceived = this.charLength = 0;
 
-    if (i == buffer.length) {
-      // if there are no more bytes in this buffer, just emit our char
-      this.onString(charStr)
-      return;
-    }
+    // if there are no more bytes in this buffer, just emit our char
+    if (i == buffer.length) return charStr;
 
-    // otherwise cut of the characters end from the beginning of this buffer
+    // otherwise cut off the characters end from the beginning of this buffer
     buffer = buffer.slice(i, buffer.length);
   }
 
 
   // determine how many bytes we have to check at the end of this buffer
-  var i = (buffer.length >= 3)
-    ? 3
-    : buffer.length;
+  var i = (buffer.length >= 3) ? 3 : buffer.length;
 
   // figure out if one of the last i bytes of our buffer announces an incomplete char
   for (; i > 0; i--) {
@@ -71,8 +75,7 @@ Utf8Decoder.prototype.write = function(buffer) {
 
   if (!this.charLength) {
     // no incomplete char at the end of this buffer, emit the whole thing
-    this.onString(charStr+buffer.toString());
-    return;
+    return charStr + buffer.toString();
   }
 
   // buffer the incomplete character bytes we got
@@ -81,9 +84,9 @@ Utf8Decoder.prototype.write = function(buffer) {
 
   if (buffer.length - i > 0) {
     // buffer had more bytes before the incomplete char, emit them
-    this.onString(charStr+buffer.slice(0, buffer.length - i).toString());
-  } else if (charStr) {
-    // or just emit the charStr if any
-    this.onString(charStr);
+    return charStr + buffer.toString('utf8', 0, buffer.length - i);
   }
+
+  // or just emit the charStr
+  return charStr;
 };
diff --git a/src/node.cc b/src/node.cc
index a83cd7b911..48ca941f48 100644
--- a/src/node.cc
+++ b/src/node.cc
@@ -1866,7 +1866,7 @@ static Handle<Value> Binding(const Arguments& args) {
       exports->Set(String::New("utils"),        String::New(native_utils));
       exports->Set(String::New("path"),         String::New(native_path));
       exports->Set(String::New("module"),       String::New(native_module));
-      exports->Set(String::New("utf8decoder"),  String::New(native_utf8decoder));
+      exports->Set(String::New("string_decoder"), String::New(native_string_decoder));
       binding_cache->Set(module, exports);
     }
 
diff --git a/test/simple/test-http-upgrade.js b/test/simple/test-http-upgrade.js
index 8afe331d42..a1021e95d5 100644
--- a/test/simple/test-http-upgrade.js
+++ b/test/simple/test-http-upgrade.js
@@ -50,12 +50,6 @@ function testServer(){
 sys.inherits(testServer, http.Server);
 
 
-function testClient(){
-  var conn = net.createConnection(PORT);
-  conn.setEncoding("utf8");
-  return conn;
-}
-
 function writeReq(socket, data, encoding){
   requests_sent++;
   socket.write(data);
@@ -66,7 +60,8 @@ function writeReq(socket, data, encoding){
   connection: Upgrade with listener
 -----------------------------------------------*/
 function test_upgrade_with_listener(_server){
-  var conn = new testClient();
+  var conn = net.createConnection(PORT);
+  conn.setEncoding("utf8");
   var state = 0;
 
   conn.addListener("connect", function () {
@@ -79,10 +74,12 @@ function test_upgrade_with_listener(_server){
             );
   });
 
-  conn.addListener("data", function(data){
+  conn.addListener("data", function (data) {
     state++;
 
-    if(state == 1){
+    assert.equal('string', typeof data);
+
+    if(state == 1) {
       assert.equal("HTTP/1.1 101", data.substr(0, 12));
       assert.equal("WjN}|M(6", request_upgradeHead.toString("utf8"));
       conn.write("test", "utf8");
@@ -106,7 +103,8 @@ function test_upgrade_with_listener(_server){
 var test_upgrade_no_listener_ended = false;
 
 function test_upgrade_no_listener(){
-  var conn = new testClient();
+  var conn = net.createConnection(PORT);
+  conn.setEncoding("utf8");
 
   conn.addListener("connect", function () {
     writeReq(conn, "GET / HTTP/1.1\r\nUpgrade: WebSocket\r\nConnection: Upgrade\r\n\r\n");
@@ -126,12 +124,15 @@ function test_upgrade_no_listener(){
   connection: normal
 -----------------------------------------------*/
 function test_standard_http(){
-  var conn = new testClient();
+  var conn = net.createConnection(PORT);
+  conn.setEncoding("utf8");
+
   conn.addListener("connect", function () {
     writeReq(conn, "GET / HTTP/1.1\r\n\r\n");
   });
 
   conn.addListener("data", function(data){
+    assert.equal("string", typeof data);
     assert.equal("HTTP/1.1 200", data.substr(0, 12));
     conn.end();
   });
@@ -144,7 +145,7 @@ function test_standard_http(){
 
 var server = createTestServer();
 
-server.listen(PORT, function(){
+server.listen(PORT, function () {
   // All tests get chained after this:
   test_upgrade_with_listener(server);
 });
diff --git a/test/simple/test-utf8-decoder.js b/test/simple/test-string-decoder.js
similarity index 51%
rename from test/simple/test-utf8-decoder.js
rename to test/simple/test-string-decoder.js
index fc15f224ed..fd5267537e 100644
--- a/test/simple/test-utf8-decoder.js
+++ b/test/simple/test-string-decoder.js
@@ -1,36 +1,30 @@
 require('../common');
-var Utf8Decoder = require('utf8decoder').Utf8Decoder,
-    Buffer = require('buffer').Buffer,
-    decoder = new Utf8Decoder(),
-    buffer,
-    onStringCalled = 0;
 
-decoder.onString = function(str) {
-  onStringCalled++;
-  assert.deepEqual(str, buffer.toString());
-};
+Buffer = require('buffer').Buffer;
+StringDecoder = require('string_decoder').StringDecoder;
+decoder = new StringDecoder('utf8');
+
+
 
 buffer = new Buffer('$');
-decoder.write(buffer);
-assert.equal(onStringCalled, 1);
+assert.deepEqual('$', decoder.write(buffer));
 
 buffer = new Buffer('¢');
-decoder.write(buffer.slice(0, 1));
-decoder.write(buffer.slice(1, 2));
-assert.equal(onStringCalled, 2);
+assert.deepEqual('', decoder.write(buffer.slice(0, 1)));
+assert.deepEqual('¢', decoder.write(buffer.slice(1, 2)));
 
 buffer = new Buffer('€');
-decoder.write(buffer.slice(0, 1));
-decoder.write(buffer.slice(1, 2));
-decoder.write(buffer.slice(2, 3));
-assert.equal(onStringCalled, 3);
+assert.deepEqual('', decoder.write(buffer.slice(0, 1)));
+assert.deepEqual('', decoder.write(buffer.slice(1, 2)));
+assert.deepEqual('€', decoder.write(buffer.slice(2, 3)));
 
 buffer = new Buffer([0xF0, 0xA4, 0xAD, 0xA2]);
-decoder.write(buffer.slice(0, 1));
-decoder.write(buffer.slice(1, 2));
-decoder.write(buffer.slice(2, 3));
-decoder.write(buffer.slice(3, 4));
-assert.equal(onStringCalled, 4);
+s = '';
+s += decoder.write(buffer.slice(0, 1));
+s += decoder.write(buffer.slice(1, 2));
+s += decoder.write(buffer.slice(2, 3));
+s += decoder.write(buffer.slice(3, 4));
+assert.ok(s.length > 0);
 
 // A mixed ascii and non-ascii string
 // Test stolen from deps/v8/test/cctest/test-strings.cc
@@ -51,18 +45,16 @@ charLengths = [0, 0, 1, 2, 2, 2, 3, 4, 4, 4, 5, 5];
 print('scanning ');
 for (var j = 2; j < buffer.length; j++) {
   for (var i = 1; i < j; i++) {
-    var decoder = new Utf8Decoder();
-    var sum = "";
-    decoder.onString = function (s) { sum += s; };
+    var decoder = new StringDecoder('utf8');
 
-    decoder.write(buffer.slice(0, i));
+    var sum = decoder.write(buffer.slice(0, i));
 
     // just check that we've received the right amount
     // after the first write
     assert.equal(charLengths[i], sum.length);
 
-    decoder.write(buffer.slice(i, j));
-    decoder.write(buffer.slice(j, buffer.length));
+    sum += decoder.write(buffer.slice(i, j));
+    sum += decoder.write(buffer.slice(j, buffer.length));
     assert.equal(expected, sum);
     print(".");
   }