diff --git a/changelogs/unreleased/44564-error-500-while-attempting-to-resolve-conflicts-due-to-utf-8-conversion-error.yml b/changelogs/unreleased/44564-error-500-while-attempting-to-resolve-conflicts-due-to-utf-8-conversion-error.yml
new file mode 100644
index 00000000000..3fb96153b9c
--- /dev/null
+++ b/changelogs/unreleased/44564-error-500-while-attempting-to-resolve-conflicts-due-to-utf-8-conversion-error.yml
@@ -0,0 +1,5 @@
+---
+title: Fix 500 error when trying to resolve non-ASCII conflicts in the editor
+merge_request: 17962
+author:
+type: fixed
diff --git a/lib/gitlab/conflict/file_collection.rb b/lib/gitlab/conflict/file_collection.rb
index 3ccfd9a739d..65a65b67975 100644
--- a/lib/gitlab/conflict/file_collection.rb
+++ b/lib/gitlab/conflict/file_collection.rb
@@ -40,7 +40,10 @@ module Gitlab
         # when there are no conflict files.
         files.each(&:lines)
         files.any?
-      rescue Gitlab::Git::CommandError, Gitlab::Git::Conflict::Parser::UnresolvableError, Gitlab::Git::Conflict::Resolver::ConflictSideMissing
+      rescue Gitlab::Git::CommandError,
+             Gitlab::Git::Conflict::Parser::UnresolvableError,
+             Gitlab::Git::Conflict::Resolver::ConflictSideMissing,
+             Gitlab::Git::Conflict::File::UnsupportedEncoding
         false
       end
       cache_method :can_be_resolved_in_ui?
diff --git a/lib/gitlab/git/conflict/file.rb b/lib/gitlab/git/conflict/file.rb
index 2a9cf10a068..f08dab59ce4 100644
--- a/lib/gitlab/git/conflict/file.rb
+++ b/lib/gitlab/git/conflict/file.rb
@@ -2,17 +2,19 @@ module Gitlab
   module Git
     module Conflict
       class File
+        UnsupportedEncoding = Class.new(StandardError)
+
         attr_reader :their_path, :our_path, :our_mode, :repository, :commit_oid
 
-        attr_accessor :content
+        attr_accessor :raw_content
 
-        def initialize(repository, commit_oid, conflict, content)
+        def initialize(repository, commit_oid, conflict, raw_content)
           @repository = repository
           @commit_oid = commit_oid
           @their_path = conflict[:theirs][:path]
           @our_path = conflict[:ours][:path]
           @our_mode = conflict[:ours][:mode]
-          @content = content
+          @raw_content = raw_content
         end
 
         def lines
@@ -29,6 +31,14 @@ module Gitlab
           end
         end
 
+        def content
+          @content ||= @raw_content.dup.force_encoding('UTF-8')
+
+          raise UnsupportedEncoding unless @content.valid_encoding?
+
+          @content
+        end
+
         def type
           lines unless @type
 
diff --git a/lib/gitlab/git/conflict/parser.rb b/lib/gitlab/git/conflict/parser.rb
index 3effa9d2d31..fb5717dd556 100644
--- a/lib/gitlab/git/conflict/parser.rb
+++ b/lib/gitlab/git/conflict/parser.rb
@@ -4,7 +4,6 @@ module Gitlab
       class Parser
         UnresolvableError = Class.new(StandardError)
         UnmergeableFile = Class.new(UnresolvableError)
-        UnsupportedEncoding = Class.new(UnresolvableError)
 
         # Recoverable errors - the conflict can be resolved in an editor, but not with
         # sections.
@@ -75,10 +74,6 @@ module Gitlab
           def validate_text!(text)
             raise UnmergeableFile if text.blank? # Typically a binary file
             raise UnmergeableFile if text.length > 200.kilobytes
-
-            text.force_encoding('UTF-8')
-
-            raise UnsupportedEncoding unless text.valid_encoding?
           end
 
           def validate_delimiter!(condition)
diff --git a/lib/gitlab/gitaly_client/conflict_files_stitcher.rb b/lib/gitlab/gitaly_client/conflict_files_stitcher.rb
index 97c13d1fdb0..c275a065bce 100644
--- a/lib/gitlab/gitaly_client/conflict_files_stitcher.rb
+++ b/lib/gitlab/gitaly_client/conflict_files_stitcher.rb
@@ -17,7 +17,7 @@ module Gitlab
 
               current_file = file_from_gitaly_header(gitaly_file.header)
             else
-              current_file.content << gitaly_file.content
+              current_file.raw_content << gitaly_file.content
             end
           end
         end
diff --git a/spec/lib/gitlab/git/conflict/file_spec.rb b/spec/lib/gitlab/git/conflict/file_spec.rb
new file mode 100644
index 00000000000..afed6c32af6
--- /dev/null
+++ b/spec/lib/gitlab/git/conflict/file_spec.rb
@@ -0,0 +1,50 @@
+# coding: utf-8
+require 'spec_helper'
+
+describe Gitlab::Git::Conflict::File do
+  let(:conflict) { { theirs: { path: 'foo', mode: 33188 }, ours: { path: 'foo', mode: 33188 } } }
+  let(:invalid_content) { described_class.new(nil, nil, conflict, "a\xC4\xFC".force_encoding(Encoding::ASCII_8BIT)) }
+  let(:valid_content) { described_class.new(nil, nil, conflict, "Espa\xC3\xB1a".force_encoding(Encoding::ASCII_8BIT)) }
+
+  describe '#lines' do
+    context 'when the content contains non-UTF-8 characters' do
+      it 'raises UnsupportedEncoding' do
+        expect { invalid_content.lines }
+          .to raise_error(described_class::UnsupportedEncoding)
+      end
+    end
+
+    context 'when the content can be converted to UTF-8' do
+      it 'sets lines to the lines' do
+        expect(valid_content.lines).to eq([{
+                                             full_line: 'España',
+                                             type: nil,
+                                             line_obj_index: 0,
+                                             line_old: 1,
+                                             line_new: 1
+                                           }])
+      end
+
+      it 'sets the type to text' do
+        expect(valid_content.type).to eq('text')
+      end
+    end
+  end
+
+  describe '#content' do
+    context 'when the content contains non-UTF-8 characters' do
+      it 'raises UnsupportedEncoding' do
+        expect { invalid_content.content }
+          .to raise_error(described_class::UnsupportedEncoding)
+      end
+    end
+
+    context 'when the content can be converted to UTF-8' do
+      it 'returns a valid UTF-8 string' do
+        expect(valid_content.content).to eq('España')
+        expect(valid_content.content).to be_valid_encoding
+        expect(valid_content.content.encoding).to eq(Encoding::UTF_8)
+      end
+    end
+  end
+end
diff --git a/spec/lib/gitlab/git/conflict/parser_spec.rb b/spec/lib/gitlab/git/conflict/parser_spec.rb
index 7b035a381f1..29a1702a1c6 100644
--- a/spec/lib/gitlab/git/conflict/parser_spec.rb
+++ b/spec/lib/gitlab/git/conflict/parser_spec.rb
@@ -212,13 +212,6 @@ CONFLICT
             .not_to raise_error
         end
       end
-
-      context 'when the file contains non-UTF-8 characters' do
-        it 'raises UnsupportedEncoding' do
-          expect { parse_text("a\xC4\xFC".force_encoding(Encoding::ASCII_8BIT)) }
-            .to raise_error(Gitlab::Git::Conflict::Parser::UnsupportedEncoding)
-        end
-      end
     end
   end
 end