diff --git a/src/integrations/terminal/ExecaTerminalProcess.ts b/src/integrations/terminal/ExecaTerminalProcess.ts
index 7764ecadbe..2b9b97d10a 100644
--- a/src/integrations/terminal/ExecaTerminalProcess.ts
+++ b/src/integrations/terminal/ExecaTerminalProcess.ts
@@ -40,6 +40,12 @@ export class ExecaTerminalProcess extends BaseTerminalProcess {
 				shell: true,
 				cwd: this.terminal.getCurrentWorkingDirectory(),
 				all: true,
+				env: {
+					...process.env,
+					// Ensure UTF-8 encoding for Ruby, CocoaPods, etc.
+					LANG: "en_US.UTF-8",
+					LC_ALL: "en_US.UTF-8",
+				},
 			})`${command}`
 
 			this.pid = subprocess.pid
diff --git a/src/integrations/terminal/__tests__/ExecaTerminalProcess.spec.ts b/src/integrations/terminal/__tests__/ExecaTerminalProcess.spec.ts
new file mode 100644
index 0000000000..fd30b610af
--- /dev/null
+++ b/src/integrations/terminal/__tests__/ExecaTerminalProcess.spec.ts
@@ -0,0 +1,123 @@
+// npx vitest run integrations/terminal/__tests__/ExecaTerminalProcess.spec.ts
+import { vitest, describe, it, expect, beforeEach, afterEach } from "vitest"
+
+const mockPid = 12345
+
+vitest.mock("execa", () => {
+	const mockKill = vitest.fn()
+	const execa = vitest.fn((options: any) => {
+		return (_template: TemplateStringsArray, ...args: any[]) => ({
+			pid: mockPid,
+			iterable: (_opts: any) =>
+				(async function* () {
+					yield "test output\n"
+				})(),
+			kill: mockKill,
+		})
+	})
+	return { execa, ExecaError: class extends Error {} }
+})
+
+vitest.mock("ps-tree", () => ({
+	default: vitest.fn((_: number, cb: any) => cb(null, [])),
+}))
+
+import { execa } from "execa"
+import { ExecaTerminalProcess } from "../ExecaTerminalProcess"
+import type { RooTerminal } from "../types"
+
+describe("ExecaTerminalProcess", () => {
+	let mockTerminal: RooTerminal
+	let terminalProcess: ExecaTerminalProcess
+	let originalEnv: NodeJS.ProcessEnv
+
+	beforeEach(() => {
+		originalEnv = { ...process.env }
+		mockTerminal = {
+			provider: "execa",
+			id: 1,
+			busy: false,
+			running: false,
+			getCurrentWorkingDirectory: vitest.fn().mockReturnValue("/test/cwd"),
+			isClosed: vitest.fn().mockReturnValue(false),
+			runCommand: vitest.fn(),
+			setActiveStream: vitest.fn(),
+			shellExecutionComplete: vitest.fn(),
+			getProcessesWithOutput: vitest.fn().mockReturnValue([]),
+			getUnretrievedOutput: vitest.fn().mockReturnValue(""),
+			getLastCommand: vitest.fn().mockReturnValue(""),
+			cleanCompletedProcessQueue: vitest.fn(),
+		} as unknown as RooTerminal
+		terminalProcess = new ExecaTerminalProcess(mockTerminal)
+	})
+
+	afterEach(() => {
+		process.env = originalEnv
+		vitest.clearAllMocks()
+	})
+
+	describe("UTF-8 encoding fix", () => {
+		it("should set LANG and LC_ALL to en_US.UTF-8", async () => {
+			await terminalProcess.run("echo test")
+			const execaMock = vitest.mocked(execa)
+			expect(execaMock).toHaveBeenCalledWith(
+				expect.objectContaining({
+					shell: true,
+					cwd: "/test/cwd",
+					all: true,
+					env: expect.objectContaining({
+						LANG: "en_US.UTF-8",
+						LC_ALL: "en_US.UTF-8",
+					}),
+				}),
+			)
+		})
+
+		it("should preserve existing environment variables", async () => {
+			process.env.EXISTING_VAR = "existing"
+			terminalProcess = new ExecaTerminalProcess(mockTerminal)
+			await terminalProcess.run("echo test")
+			const execaMock = vitest.mocked(execa)
+			const calledOptions = execaMock.mock.calls[0][0] as any
+			expect(calledOptions.env.EXISTING_VAR).toBe("existing")
+		})
+
+		it("should override existing LANG and LC_ALL values", async () => {
+			process.env.LANG = "C"
+			process.env.LC_ALL = "POSIX"
+			terminalProcess = new ExecaTerminalProcess(mockTerminal)
+			await terminalProcess.run("echo test")
+			const execaMock = vitest.mocked(execa)
+			const calledOptions = execaMock.mock.calls[0][0] as any
+			expect(calledOptions.env.LANG).toBe("en_US.UTF-8")
+			expect(calledOptions.env.LC_ALL).toBe("en_US.UTF-8")
+		})
+	})
+
+	describe("basic functionality", () => {
+		it("should create instance with terminal reference", () => {
+			expect(terminalProcess).toBeInstanceOf(ExecaTerminalProcess)
+			expect(terminalProcess.terminal).toBe(mockTerminal)
+		})
+
+		it("should emit shell_execution_complete with exitCode 0", async () => {
+			const spy = vitest.fn()
+			terminalProcess.on("shell_execution_complete", spy)
+			await terminalProcess.run("echo test")
+			expect(spy).toHaveBeenCalledWith({ exitCode: 0 })
+		})
+
+		it("should emit completed event with full output", async () => {
+			const spy = vitest.fn()
+			terminalProcess.on("completed", spy)
+			await terminalProcess.run("echo test")
+			expect(spy).toHaveBeenCalledWith("test output\n")
+		})
+
+		it("should set and clear active stream", async () => {
+			await terminalProcess.run("echo test")
+			expect(mockTerminal.setActiveStream).toHaveBeenCalledWith(expect.any(Object), mockPid)
+			expect(mockTerminal.setActiveStream).toHaveBeenLastCalledWith(undefined)
+		})
+	})
+})