diff --git a/ChangeLog b/ChangeLog
index 8569d2ce6c..2c9948600c 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,10 @@
+Sat Jan 19 08:35:36 2008  Nobuyoshi Nakada  <nobu@ruby-lang.org>
+
+	* parse.y (parser_prepare): get encoding from the first line.
+	  [ruby-dev:33168]
+
+	* ruby.c (load_file): set encoding to input with set_encoding.
+
 Sat Jan 19 03:46:42 2008  Yukihiro Matsumoto  <matz@ruby-lang.org>
 
 	* thread.c (thread_create_core): prohibit thread creation in the
diff --git a/parse.y b/parse.y
index 6c0ed229c1..88d168c320 100644
--- a/parse.y
+++ b/parse.y
@@ -4764,7 +4764,6 @@ rb_parser_compile_string(volatile VALUE vparser, const char *f, VALUE s, int lin
     lex_gets = lex_get_str;
     lex_gets_ptr = 0;
     lex_input = s;
-    parser->enc = rb_enc_get(s);
     lex_pbeg = lex_p = lex_pend = 0;
     compile_for_eval = rb_parse_in_eval();
 
@@ -5957,6 +5956,7 @@ parser_prepare(struct parser_params *parser)
 	return;
     }
     pushback(c);
+    parser->enc = rb_enc_get(lex_lastline);
 }
 
 #define IS_ARG() (lex_state == EXPR_ARG || lex_state == EXPR_CMDARG)
@@ -9689,9 +9689,6 @@ ripper_initialize(int argc, VALUE *argv, VALUE self)
         rb_str_append(fname2, fname);
     }
     parser_initialize(parser);
-    if (parser->parser_lex_gets == lex_get_str) {
-	parser->enc = rb_enc_get(src);
-    }
 
     parser->parser_ruby_sourcefile_string = fname2;
     parser->parser_ruby_sourcefile = RSTRING_PTR(fname2)+1;
diff --git a/ruby.c b/ruby.c
index 356bd4eed7..7ed0eee9b5 100644
--- a/ruby.c
+++ b/ruby.c
@@ -1038,6 +1038,7 @@ load_file(VALUE parser, const char *fname, int script, struct cmdline_options *o
     VALUE f;
     int line_start = 1;
     NODE *tree = 0;
+    rb_encoding *enc;
 
     if (!fname)
 	rb_load_fail(fname);
@@ -1151,10 +1152,16 @@ load_file(VALUE parser, const char *fname, int script, struct cmdline_options *o
 	require_libraries();	/* Why here? unnatural */
     }
     if (opt->enc_index >= 0) {
-	rb_enc_associate_index(f, opt->enc_index);
+	enc = rb_enc_from_index(opt->enc_index);
     }
     else if (f == rb_stdin) {
-	rb_enc_associate(f, rb_locale_encoding());
+	enc = rb_locale_encoding();
+    }
+    else {
+	enc = 0;
+    }
+    if (enc) {
+	rb_funcall(f, rb_intern("set_encoding"), 1, rb_enc_from_encoding(enc));
     }
     tree = (NODE *)rb_parser_compile_file(parser, fname, f, line_start);
     if (script && rb_parser_end_seen_p(parser)) {