diff --git a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemEditableRemoteFile.java b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemEditableRemoteFile.java
index 10d9d21f578..769b46ed724 100644
--- a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemEditableRemoteFile.java
+++ b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemEditableRemoteFile.java
@@ -598,7 +598,7 @@ public class SystemEditableRemoteFile implements ISystemEditableRemoteObject, IP
 			return false;	
 		}
 		
-		subsystem.download(remoteFile, localPath, SystemEncodingUtil.ENCODING_UTF_8, monitor);
+		subsystem.download(remoteFile, localPath, remoteFile.getEncoding(), monitor);
 		if (monitor.isCanceled())
 		{
 			return false;
@@ -1438,7 +1438,7 @@ public class SystemEditableRemoteFile implements ISystemEditableRemoteObject, IP
 		else {
 			
 			if (!properties.getUsedBinaryTransfer()) {
-				encoding = SystemEncodingUtil.ENCODING_UTF_8;
+				encoding = remoteFile.getEncoding();
 			}
 		}
 		
diff --git a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemUniversalTempFileListener.java b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemUniversalTempFileListener.java
index fb05070d5e9..3f238f533dc 100644
--- a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemUniversalTempFileListener.java
+++ b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/SystemUniversalTempFileListener.java
@@ -230,7 +230,13 @@ public class SystemUniversalTempFileListener extends SystemTempFileListener
 				try
 				{
 					// upload our pending changes to the remote file
-					fs.upload(tempFile.getLocation().makeAbsolute().toOSString(), remoteFile, SystemEncodingUtil.ENCODING_UTF_8, monitor);
+					String srcEncoding = tempFile.getCharset(true);
+					
+					if (srcEncoding == null) {
+						srcEncoding = remoteFile.getEncoding();
+					}
+					
+					fs.upload(tempFile.getLocation().makeAbsolute().toOSString(), remoteFile, srcEncoding, monitor);
 				}
 
 				catch (RemoteFileSecurityException e)
diff --git a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/UniversalFileTransferUtility.java b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/UniversalFileTransferUtility.java
index 7752861d52d..ae993967096 100644
--- a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/UniversalFileTransferUtility.java
+++ b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/files/ui/resources/UniversalFileTransferUtility.java
@@ -167,7 +167,8 @@ public class UniversalFileTransferUtility
 		    // copy remote file to workspace
 			SystemUniversalTempFileListener listener = SystemUniversalTempFileListener.getListener();
 			listener.addIgnoreFile(tempFile);
-		    srcFS.download(srcFileOrFolder, tempFile.getLocation().makeAbsolute().toOSString(), SystemEncodingUtil.ENCODING_UTF_8, monitor);
+			String remoteEncoding = srcFileOrFolder.getEncoding();
+		    srcFS.download(srcFileOrFolder, tempFile.getLocation().makeAbsolute().toOSString(), remoteEncoding, monitor);
 		    listener.removeIgnoreFile(tempFile);
 		    if (!tempFile.exists() && !tempFile.isSynchronized(IResource.DEPTH_ZERO))
 		    {
@@ -196,12 +197,12 @@ public class UniversalFileTransferUtility
 					try
 					{
 						String cset = tempFile.getCharset();
-						if (!cset.equals(SystemEncodingUtil.ENCODING_UTF_8))
+						if (!cset.equals(remoteEncoding))
 						{
 						
 							//System.out.println("charset ="+cset);
 							//System.out.println("tempfile ="+tempFile.getFullPath());
-							tempFile.setCharset(SystemEncodingUtil.ENCODING_UTF_8, monitor);
+							tempFile.setCharset(remoteEncoding, monitor);
 						}
 					}
 					catch (Exception e)
@@ -528,7 +529,8 @@ public class UniversalFileTransferUtility
 		    // copy remote file to workspace
 			SystemUniversalTempFileListener listener = SystemUniversalTempFileListener.getListener();
 			listener.addIgnoreFile(tempFile);
-		    download(srcFileOrFolder, tempFile, SystemEncodingUtil.ENCODING_UTF_8, monitor);
+			String encoding = System.getProperty("file.encoding"); //$NON-NLS-1$
+		    download(srcFileOrFolder, tempFile, encoding, monitor);
 		    listener.removeIgnoreFile(tempFile);
 		    if (!tempFile.exists() && !tempFile.isSynchronized(IResource.DEPTH_ZERO))
 		    {
@@ -549,9 +551,9 @@ public class UniversalFileTransferUtility
 					try
 					{
 						String cset = tempFile.getCharset();
-						if (!cset.equals(SystemEncodingUtil.ENCODING_UTF_8))
+						if (!cset.equals(encoding))
 						{
-							tempFile.setCharset(SystemEncodingUtil.ENCODING_UTF_8, monitor);
+							tempFile.setCharset(encoding, monitor);
 						}
 					}
 					catch (Exception e)
diff --git a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/internal/files/ui/resources/SystemRemoteEditManager.java b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/internal/files/ui/resources/SystemRemoteEditManager.java
index a920d99b1b2..125e0cd6fdf 100644
--- a/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/internal/files/ui/resources/SystemRemoteEditManager.java
+++ b/rse/plugins/org.eclipse.rse.files.ui/src/org/eclipse/rse/internal/files/ui/resources/SystemRemoteEditManager.java
@@ -313,7 +313,7 @@ public class SystemRemoteEditManager
 			
 			description.setNatureIds(newNatures);
 			editProject.setDescription(description, null);
-			editProject.setDefaultCharset(SystemEncodingUtil.ENCODING_UTF_8, new NullProgressMonitor());
+			// editProject.setDefaultCharset(SystemEncodingUtil.ENCODING_UTF_8, new NullProgressMonitor());
 	
 			
 			// add java support
diff --git a/rse/plugins/org.eclipse.rse.services.local/src/org/eclipse/rse/internal/services/local/files/LocalFileService.java b/rse/plugins/org.eclipse.rse.services.local/src/org/eclipse/rse/internal/services/local/files/LocalFileService.java
index cdb9669172a..2d8526746ee 100644
--- a/rse/plugins/org.eclipse.rse.services.local/src/org/eclipse/rse/internal/services/local/files/LocalFileService.java
+++ b/rse/plugins/org.eclipse.rse.services.local/src/org/eclipse/rse/internal/services/local/files/LocalFileService.java
@@ -597,11 +597,13 @@ public class LocalFileService extends AbstractFileService implements IFileServic
 					destinationFile.setLastModified(localFile.lastModified());
 					//TODO check if we want to preserve permissions
 					//if(!localFile.canWrite()) destinationFile.setReadOnly();
-					if (destinationFile.length() != localFile.length()) {
+					
+					// File lengths can be different if the encodings are different
+/*					if (destinationFile.length() != localFile.length()) {
 						//	throw new RemoteFileCancelledException();
 						System.err.println("local.upload: size mismach on "+destinationFile.getAbsolutePath()); //$NON-NLS-1$
 						return false;
-					}
+					}*/
 				}
 			}
 			catch (IOException e)
diff --git a/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java
index e01c80f2e23..155ece98de4 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java
@@ -68,7 +68,7 @@ public final class FileServiceSubSystem extends RemoteFileSubSystem implements I
 	protected IRemoteFile _userHome;
 	
 	
-
+	
 	
 	public FileServiceSubSystem(IHost host, IConnectorService connectorService, IFileService hostFileService, IHostFileToRemoteFileAdapter fileAdapter, ISearchService searchService)
 	{
@@ -454,7 +454,7 @@ public final class FileServiceSubSystem extends RemoteFileSubSystem implements I
 		File localFile = new File(localpath);
 		try
 		{
-			getFileService().download(monitor, parentPath, file.getName(), localFile, isBinary(file), encoding);
+			getFileService().download(monitor, parentPath, file.getName(), localFile, isBinary(file), file.getEncoding());
 		}
 		catch (SystemMessageException e)
 		{
@@ -533,7 +533,7 @@ public final class FileServiceSubSystem extends RemoteFileSubSystem implements I
 	{
 		String remoteParentPath = destination.getParentPath();
 		String remoteFileName = destination.getName();
-		String hostEncoding = getRemoteEncoding(); // default host encoding
+		String hostEncoding = destination.getEncoding();
 		boolean isBinary = isBinary(encoding, hostEncoding, destination.getAbsolutePath());
 
 		if (!destination.canWrite())