diff --git a/test/Microsoft.OpenApi.Readers.Tests/V32Tests/OpenApiEncodingTests.cs b/test/Microsoft.OpenApi.Readers.Tests/V32Tests/OpenApiEncodingTests.cs
new file mode 100644
index 000000000..ac761c991
--- /dev/null
+++ b/test/Microsoft.OpenApi.Readers.Tests/V32Tests/OpenApiEncodingTests.cs
@@ -0,0 +1,33 @@
+// Copyright (c) Microsoft Corporation. All rights reserved.
+// Licensed under the MIT license.
+
+using System.IO;
+using System.Threading.Tasks;
+using Microsoft.OpenApi.Reader;
+using Xunit;
+
+namespace Microsoft.OpenApi.Readers.Tests.V32Tests
+{
+    [Collection("DefaultSettings")]
+    public class OpenApiEncodingTests
+    {
+        private const string SampleFolderPath = "V32Tests/Samples/OpenApiEncoding/";
+
+        [Fact]
+        public async Task ParseEncodingWithAllowReservedShouldSucceed()
+        {
+            // Act
+            var encoding = await OpenApiModelFactory.LoadAsync<OpenApiEncoding>(Path.Combine(SampleFolderPath, "encodingWithAllowReserved.yaml"), OpenApiSpecVersion.OpenApi3_2, new(), SettingsFixture.ReaderSettings);
+
+            // Assert
+            Assert.Equivalent(
+                new OpenApiEncoding
+                {
+                    ContentType = "application/x-www-form-urlencoded",
+                    Style = ParameterStyle.Form,
+                    Explode = true,
+                    AllowReserved = true
+                }, encoding);
+        }
+    }
+}
diff --git a/test/Microsoft.OpenApi.Readers.Tests/V32Tests/Samples/OpenApiEncoding/encodingWithAllowReserved.yaml b/test/Microsoft.OpenApi.Readers.Tests/V32Tests/Samples/OpenApiEncoding/encodingWithAllowReserved.yaml
new file mode 100644
index 000000000..1e6c47865
--- /dev/null
+++ b/test/Microsoft.OpenApi.Readers.Tests/V32Tests/Samples/OpenApiEncoding/encodingWithAllowReserved.yaml
@@ -0,0 +1,5 @@
+# https://github.com/OAI/OpenAPI-Specification/blob/main/versions/3.2.0.md#encodingObject
+contentType: application/x-www-form-urlencoded
+style: form
+explode: true
+allowReserved: true