diff --git a/src/System.Management.Automation/engine/InitialSessionState.cs b/src/System.Management.Automation/engine/InitialSessionState.cs
index 8551c81bfbf..42167e00f55 100644
--- a/src/System.Management.Automation/engine/InitialSessionState.cs
+++ b/src/System.Management.Automation/engine/InitialSessionState.cs
@@ -4410,7 +4410,7 @@ .ForwardHelpCategory Cmdlet
             // Variable which controls the encoding for piping data to a NativeCommand
             new SessionStateVariableEntry(
                 SpecialVariables.OutputEncoding,
-                System.Text.Encoding.ASCII,
+                Utils.utf8NoBom,
                 RunspaceInit.OutputEncodingDescription,
                 ScopedItemOptions.None,
                 new ArgumentTypeConverterAttribute(typeof(System.Text.Encoding))
diff --git a/src/System.Management.Automation/engine/NativeCommandProcessor.cs b/src/System.Management.Automation/engine/NativeCommandProcessor.cs
index cee3678d77d..c51e730495f 100644
--- a/src/System.Management.Automation/engine/NativeCommandProcessor.cs
+++ b/src/System.Management.Automation/engine/NativeCommandProcessor.cs
@@ -1798,7 +1798,7 @@ internal void Start(Process process, NativeCommandIOFormat inputFormat)
             //from the current scope so a script or function can use a different encoding
             //than global value.
             Encoding pipeEncoding = _command.Context.GetVariableValue(SpecialVariables.OutputEncodingVarPath) as System.Text.Encoding ??
-                                    Encoding.ASCII;
+                                    Utils.utf8NoBom;
 
             _streamWriter = new StreamWriter(process.StandardInput.BaseStream, pipeEncoding);
             _streamWriter.AutoFlush = true;
diff --git a/test/powershell/Language/Scripting/NativeExecution/NativeCommandProcessor.Tests.ps1 b/test/powershell/Language/Scripting/NativeExecution/NativeCommandProcessor.Tests.ps1
index 987c5416d94..f3823b93563 100644
--- a/test/powershell/Language/Scripting/NativeExecution/NativeCommandProcessor.Tests.ps1
+++ b/test/powershell/Language/Scripting/NativeExecution/NativeCommandProcessor.Tests.ps1
@@ -1,3 +1,10 @@
+Describe 'Native pipeline should have proper encoding' -tags 'CI' {
+    It '$OutputEncoding should be set to UTF8 without BOM' {
+        $OutputEncoding.BodyName | Should Be "utf-8"
+        $OutputEncoding.GetPreamble().Length | Should Be 0
+    }
+}
+
 Describe 'native commands with pipeline' -tags 'Feature' {
 
     BeforeAll {