diff --git a/CHANGELOG.md b/CHANGELOG.md
index 21007aafe..201dc8817 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -223,6 +223,15 @@ The format follows [Keep a Changelog](https://keepachangelog.com/en/1.1.0/).
   prefix check using OS path separators. Added regression test tagged
   `@tdd_issue_7558`.
 
+- **File Edit Encoding Parameter** (#7559): `_handle_file_edit()` now correctly
+  respects the `encoding` parameter when reading and writing files. Previously the
+  function ignored the caller-supplied encoding and fell back to the platform default,
+  causing data corruption with non-UTF-8 files. The fix extracts `encoding` from the
+  tool inputs (defaulting to `"utf-8"`) and passes it to both `path.read_text()` and
+  `path.write_text()`. The `FILE_EDIT_SPEC` input schema was updated to declare the
+  `encoding` field. BDD scenarios were added to cover explicit encoding and the
+  UTF-8 default.
+
 - **Validation Gate Empty-Run Guard** (#7508): Fixed `ApplyValidationSummary.all_required_passed`
   returning `True` when zero validations were run, silently bypassing the apply gate. The property
   now returns `False` when the validation result set is empty (`is_empty` is `True`), ensuring
diff --git a/CONTRIBUTORS.md b/CONTRIBUTORS.md
index cb09b3a56..637dd5b31 100644
--- a/CONTRIBUTORS.md
+++ b/CONTRIBUTORS.md
@@ -19,3 +19,4 @@ Below are some of the specific details of various contributions.
 * HAL 9000 has contributed the plan concurrency race-condition fix (#7989): wired `LockService` into the plan lifecycle, guarding `execute_plan()` and `apply_plan()` with plan-level advisory locks and unique per-invocation owner identities to prevent silent concurrent state corruption.
 * This project was made possible thanks to considerable donation of time, money, and resources by CleverThis, Inc.
 * HAL 9000 has contributed automated bug fixes, CLI output formatting improvements, and ongoing maintenance as part of the CleverAgents automation system.
+* HAL 9000 has contributed the file edit encoding parameter fix (PR #8258 / issue #7559).
diff --git a/features/steps/tool_builtins_steps.py b/features/steps/tool_builtins_steps.py
index 012f748bd..7569e85c6 100644
--- a/features/steps/tool_builtins_steps.py
+++ b/features/steps/tool_builtins_steps.py
@@ -62,6 +62,15 @@ def step_given_file_with_content(context: Any, name: str, content: str) -> None:
     path.write_text(content)
 
 
+@given('an encoded file "{name}" with encoding "{encoding}" and content "{content}"')
+def step_given_file_with_content_encoding(
+    context: Any, name: str, encoding: str, content: str
+) -> None:
+    path = Path(context.sandbox_dir) / name
+    path.parent.mkdir(parents=True, exist_ok=True)
+    path.write_text(content, encoding=encoding)
+
+
 @given('a file "{name}" with lines "{csv_lines}"')
 def step_given_file_with_lines(context: Any, name: str, csv_lines: str) -> None:
     lines = csv_lines.split(",")
@@ -149,6 +158,24 @@ def step_when_file_edit(context: Any, old: str, new: str) -> None:
     )
 
 
+@when(
+    'I edit file "edit-enc.txt" replacing "{old}" with "{new}" specifying encoding "{encoding}"'
+)
+def step_when_file_edit_with_encoding(
+    context: Any, old: str, new: str, encoding: str
+) -> None:
+    _run_tool(
+        context,
+        "builtin/file-edit",
+        {
+            "path": "edit-enc.txt",
+            "old_text": old,
+            "new_text": new,
+            "encoding": encoding,
+        },
+    )
+
+
 @when('I execute the "builtin/file-edit" tool replacing all "{old}" with "{new}"')
 def step_when_file_edit_all(context: Any, old: str, new: str) -> None:
     _run_tool(
diff --git a/features/tool_builtins.feature b/features/tool_builtins.feature
index 944faaffb..ea7f94141 100644
--- a/features/tool_builtins.feature
+++ b/features/tool_builtins.feature
@@ -69,6 +69,20 @@ Feature: Built-in File Tools
     Then the tool result should not be successful
     And the tool result error should mention "not found"
 
+  Scenario: Edit file uses explicit encoding parameter
+    Given a temporary sandbox directory
+    And an encoded file "edit-enc.txt" with encoding "latin-1" and content "café"
+    When I edit file "edit-enc.txt" replacing "café" with "naïve" specifying encoding "latin-1"
+    Then the tool result should be successful
+    And the output "replacements" should equal 1
+
+  Scenario: Edit file defaults to utf-8 encoding when not specified
+    Given a temporary sandbox directory
+    And a file "edit.txt" with content "default encoding test"
+    When I execute the "builtin/file-edit" tool replacing "default" with "explicit"
+    Then the tool result should be successful
+    And the output "replacements" should equal 1
+
   # ---- File Delete ----
 
   Scenario: Delete an existing file
diff --git a/src/cleveragents/tool/builtins/file_tools.py b/src/cleveragents/tool/builtins/file_tools.py
index 468e7bd90..5968ecaf3 100644
--- a/src/cleveragents/tool/builtins/file_tools.py
+++ b/src/cleveragents/tool/builtins/file_tools.py
@@ -144,8 +144,9 @@ def _handle_file_edit(inputs: dict[str, Any]) -> dict[str, Any]:
     old_text: str = inputs["old_text"]
     new_text: str = inputs["new_text"]
     replace_all: bool = inputs.get("replace_all", False)
+    encoding: str = inputs.get("encoding", "utf-8")
 
-    content = path.read_text()
+    content = path.read_text(encoding=encoding)
     count = content.count(old_text)
 
     if count == 0:
@@ -157,7 +158,7 @@ def _handle_file_edit(inputs: dict[str, Any]) -> dict[str, Any]:
         content = content.replace(old_text, new_text, 1)
         count = 1
 
-    path.write_text(content)
+    path.write_text(content, encoding=encoding)
 
     return {
         "path": str(path),
@@ -330,6 +331,11 @@ FILE_EDIT_SPEC = ToolSpec(
                 "default": False,
                 "description": "Replace all occurrences",
             },
+            "encoding": {
+                "type": "string",
+                "default": "utf-8",
+                "description": "File encoding",
+            },
         },
         "required": ["path", "old_text", "new_text"],
     },