diff --git a/xpfe/browser/resources/content/navigator.js b/xpfe/browser/resources/content/navigator.js
index 598522b1305a..374f6663fbfe 100644
--- a/xpfe/browser/resources/content/navigator.js
+++ b/xpfe/browser/resources/content/navigator.js
@@ -1588,10 +1588,31 @@ function getShortcutOrURI(url)
         shortcutURL = gBookmarksService.resolveKeyword(cmd);
         // Bug 123006 : %s replace and URI escape, %S replace with raw value
         if (shortcutURL && text) {
-          shortcutURL = /%[sS]/.test(shortcutURL) ?
-              shortcutURL.replace(/%s/g, encodeURIComponent(text))
-                         .replace(/%S/g, text) :
-              null;
+          var encodedText = null; 
+          var charset = "";
+          const re = /^(.*)\&mozcharset=([a-zA-Z][_\-a-zA-Z0-9]+)\s*$/; 
+          var matches = shortcutURL.match(re);
+          if (matches) {
+             shortcutURL = matches[1];
+             charset = matches[2];
+          }
+          else if (/%s/.test(shortcutURL)) {
+            try {
+              charset = BMSVC.getLastCharset(shortcutURL);
+            } catch (ex) {
+            }
+          }
+
+          if (charset)
+            encodedText = escape(convertFromUnicode(charset, text)); 
+          else  // default case: charset=UTF-8
+            encodedText = encodeURIComponent(text);
+
+          if (encodedText && /%[sS]/.test(shortcutURL))
+            shortcutURL = shortcutURL.replace(/%s/g, encodedText)
+                                     .replace(/%S/g, text);
+          else 
+            shortcutURL = null;
         }
       }
     }
@@ -2656,3 +2677,17 @@ function updateSavePageItems()
   var autoDownload = pref.getBoolPref("browser.download.autoDownload");
   goSetMenuValue("savepage", autoDownload ? "valueSave" : "valueSaveAs");
 }
+
+function convertFromUnicode(charset, str)
+{
+  try {
+    var unicodeConverter = Components
+       .classes["@mozilla.org/intl/scriptableunicodeconverter"]
+       .createInstance(Components.interfaces.nsIScriptableUnicodeConverter);
+    unicodeConverter.charset = charset;
+    str = unicodeConverter.ConvertFromUnicode(str);
+    return str + unicodeConverter.Finish();
+  } catch(ex) {
+    return null; 
+  }
+}
diff --git a/xpfe/components/bookmarks/public/nsIBookmarksService.idl b/xpfe/components/bookmarks/public/nsIBookmarksService.idl
index 12280ff72738..a54863e1e8f9 100644
--- a/xpfe/components/bookmarks/public/nsIBookmarksService.idl
+++ b/xpfe/components/bookmarks/public/nsIBookmarksService.idl
@@ -98,6 +98,8 @@ interface nsIBookmarksService : nsISupports
 
     void updateLastVisitedDate(in string aURL, in wstring docCharset);
     
+    AString getLastCharset(in AUTF8String aURL); 
+
     string resolveKeyword(in wstring aName);
     
     void importSystemBookmarks(in nsIRDFResource aParentFolder);
diff --git a/xpfe/components/bookmarks/src/nsBookmarksService.cpp b/xpfe/components/bookmarks/src/nsBookmarksService.cpp
index 410aba04502b..5c1129b48014 100644
--- a/xpfe/components/bookmarks/src/nsBookmarksService.cpp
+++ b/xpfe/components/bookmarks/src/nsBookmarksService.cpp
@@ -3666,6 +3666,45 @@ nsBookmarksService::UpdateBookmarkLastModifiedDate(nsIRDFResource *aSource)
     return rv;
 }
 
+NS_IMETHODIMP
+nsBookmarksService::GetLastCharset(const nsACString &aURL, nsAString &aCharset)
+{
+    aCharset.Truncate(); 
+
+    nsCOMPtr<nsIRDFLiteral> urlLiteral;
+    nsresult rv = gRDF->GetLiteral(NS_ConvertUTF8toUCS2(aURL).get(),
+                                   getter_AddRefs(urlLiteral));
+
+    if (NS_FAILED(rv))
+        return rv;
+
+    nsCOMPtr<nsIRDFResource> bookmark;
+    rv = GetSource(kNC_URL, urlLiteral, PR_TRUE, getter_AddRefs(bookmark));
+    if (NS_FAILED(rv))
+        return rv;
+
+    nsCOMPtr<nsIRDFNode> nodeType;
+    GetSynthesizedType(bookmark, getter_AddRefs(nodeType));
+    if (nodeType == kNC_Bookmark) {
+        nsCOMPtr<nsIRDFNode> charsetNode;
+        rv = GetTarget(bookmark, kWEB_LastCharset, PR_TRUE,
+                       getter_AddRefs(charsetNode));
+        if (NS_FAILED(rv))
+            return rv;
+
+        if (charsetNode) {
+            nsCOMPtr<nsIRDFLiteral> charsetData(do_QueryInterface(charsetNode));
+            if (charsetData) {
+                const PRUnichar *charset;
+                charsetData->GetValueConst(&charset);
+                aCharset.Assign(charset);
+            }
+        }
+    }
+
+    return NS_OK;
+}
+
 NS_IMETHODIMP
 nsBookmarksService::ResolveKeyword(const PRUnichar *aUserInput, char **aShortcutURL)
 {