diff --git a/ChangeLog b/ChangeLog
index 317f660f1..85db0cd41 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,9 @@
+2005-07-08  Moritz Bunkus  <moritz@bunkus.org>
+
+	* mkvmerge: bug fix: Fixed support for USF subtitles stored in
+	UTF-16 and UTF-32. Added support for USF subtitles stored in UTF-8
+	without a BOM.
+
 2005-07-01  Moritz Bunkus  <moritz@bunkus.org>
 
 	* Released v1.5.0.
diff --git a/src/common/mm_io.h b/src/common/mm_io.h
index 6dd4f31e6..32fe74cee 100644
--- a/src/common/mm_io.h
+++ b/src/common/mm_io.h
@@ -235,6 +235,9 @@ public:
   virtual string getline();
   virtual int read_next_char(char *buffer);
   virtual byte_order_e get_byte_order();
+  virtual void set_byte_order(byte_order_e new_byte_order) {
+    byte_order = new_byte_order;
+  }
 };
 
 class MTX_DLL_API mm_stdio_c: public mm_io_c {
diff --git a/src/common/xml_element_parser.cpp b/src/common/xml_element_parser.cpp
index fb09b3b47..c824bf006 100644
--- a/src/common/xml_element_parser.cpp
+++ b/src/common/xml_element_parser.cpp
@@ -640,6 +640,8 @@ xml_parser_c::parse_one_xml_line() {
   if (!m_xml_source->getline2(line))
     return false;
 
+  handle_xml_encoding(line);
+
   line += "\n";
   if ((XML_Parse(m_xml_parser, line.c_str(), line.length(),
                  m_xml_source->eof()) == 0) &&
@@ -664,3 +666,71 @@ xml_parser_c::throw_error(const xml_parser_error_c &error) {
   m_saved_parser_error = error;
   longjmp(m_parser_error_jmp_buf, 1);
 }
+
+void
+xml_parser_c::handle_xml_encoding(string &line) {
+  int pos;
+  string new_line;
+
+  if ((XMLP_STATE_AFTER_HEADER == m_xml_parser_state) ||
+      (BO_NONE == m_xml_source->get_byte_order()))
+    return;
+
+  pos = 0;
+
+  if (XMLP_STATE_INITIAL == m_xml_parser_state) {
+    pos = line.find("<?xml");
+    if (0 > pos)
+      return;
+    m_xml_parser_state = XMLP_STATE_ATTRIBUTE_NAME;
+    pos += 5;
+    new_line = line.substr(0, pos);
+  }
+
+  while ((line.length() > pos) &&
+         (XMLP_STATE_AFTER_HEADER != m_xml_parser_state)) {
+    char cur_char = line[pos];
+    ++pos;
+
+    if (XMLP_STATE_ATTRIBUTE_NAME == m_xml_parser_state) {
+      if (('?' == cur_char) && (line.length() > pos) &&
+          ('>' == line[pos])) {
+        new_line += "?>" + line.substr(pos + 1, line.length() - pos - 1);
+        m_xml_parser_state = XMLP_STATE_AFTER_HEADER;
+
+      } else if ('"' == cur_char)
+        m_xml_parser_state = XMLP_STATE_ATTRIBUTE_VALUE;
+
+      else if ((' ' != cur_char) && ('=' != cur_char))
+        m_xml_attribute_name += cur_char;
+
+    } else {
+      // XMLP_STATE_ATTRIBUTE_VALUE
+      if ('"' == cur_char) {
+        m_xml_parser_state = XMLP_STATE_ATTRIBUTE_NAME;
+        strip(m_xml_attribute_name);
+        strip(m_xml_attribute_value);
+        if (m_xml_attribute_name == "encoding") {
+          m_xml_attribute_value = downcase(m_xml_attribute_value);
+          if ((m_xml_source->get_byte_order() == BO_NONE) &&
+              ((m_xml_attribute_value == "utf-8") ||
+               (m_xml_attribute_value == "utf8")))
+            m_xml_source->set_byte_order(BO_UTF8);
+
+          else if (starts_with_case(m_xml_attribute_value, "utf"))
+            m_xml_attribute_value = "UTF-8";
+        }
+
+        new_line += " " + m_xml_attribute_name + "=\"" +
+          m_xml_attribute_value + "\"";
+        m_xml_attribute_name = "";
+        m_xml_attribute_value = "";
+
+      } else
+        m_xml_attribute_value += cur_char;
+    }
+  }
+
+  line = new_line;
+}
+
diff --git a/src/common/xml_element_parser.h b/src/common/xml_element_parser.h
index 91df6f050..2bf2d572f 100644
--- a/src/common/xml_element_parser.h
+++ b/src/common/xml_element_parser.h
@@ -60,11 +60,13 @@ class MTX_DLL_API xml_parser_c {
 private:
   jmp_buf m_parser_error_jmp_buf;
   xml_parser_error_c m_saved_parser_error;
+  string m_xml_attribute_name, m_xml_attribute_value;
 
 protected:
   enum state_t {
     XMLP_STATE_INITIAL,
-    XMLP_STATE_IN_HEADER,
+    XMLP_STATE_ATTRIBUTE_NAME,
+    XMLP_STATE_ATTRIBUTE_VALUE,
     XMLP_STATE_AFTER_HEADER
   };
 
@@ -91,6 +93,9 @@ public:
   virtual bool parse_one_xml_line();
 
   virtual void throw_error(const xml_parser_error_c &error);
+
+private:
+  void handle_xml_encoding(string &line);
 };
 
 typedef struct {