diff --git a/docs/about/release-notes.md b/docs/about/release-notes.md
index f7f6724d..dc563135 100644
--- a/docs/about/release-notes.md
+++ b/docs/about/release-notes.md
@@ -56,6 +56,7 @@ your global navigation uses more than one level, things will likely be broken.
 
 ### Other Changes and Additions to Version 1.1
 
+* Bugfix: Account for encoded URLs (#1670).
 * Bugfix: Ensure theme files do not override `docs_dir` files (#1671).
 * Bugfix: Do not normalize URL fragments (#1655).
 * Add canonical tag to `readthedocs` theme (#1669).
diff --git a/mkdocs/structure/files.py b/mkdocs/structure/files.py
index 73dc56e6..4af814a3 100644
--- a/mkdocs/structure/files.py
+++ b/mkdocs/structure/files.py
@@ -165,7 +165,7 @@ class File(object):
                 url = '.'
             else:
                 url = dirname + '/'
-        return url
+        return utils.urlquote(url)
 
     def url_relative_to(self, other):
         """ Return url for file relative to other file. """
diff --git a/mkdocs/structure/pages.py b/mkdocs/structure/pages.py
index 21d784bf..6327d28f 100644
--- a/mkdocs/structure/pages.py
+++ b/mkdocs/structure/pages.py
@@ -13,7 +13,7 @@ from markdown.treeprocessors import Treeprocessor
 from markdown.util import AMP_SUBSTITUTE
 
 from mkdocs.structure.toc import get_toc
-from mkdocs.utils import meta, urlparse, urlunparse, urljoin, get_markdown_title, warning_filter
+from mkdocs.utils import meta, urlparse, urlunparse, urljoin, urlunquote, get_markdown_title, warning_filter
 
 log = logging.getLogger(__name__)
 log.addFilter(warning_filter)
@@ -222,7 +222,7 @@ class _RelativePathTreeprocessor(Treeprocessor):
             return url
 
         # Determine the filepath of the target.
-        target_path = os.path.join(os.path.dirname(self.file.src_path), path)
+        target_path = os.path.join(os.path.dirname(self.file.src_path), urlunquote(path))
         target_path = os.path.normpath(target_path).lstrip(os.sep)
 
         # Validate that the target exists in files collection.
diff --git a/mkdocs/tests/structure/file_tests.py b/mkdocs/tests/structure/file_tests.py
index 116d1424..230f57cd 100644
--- a/mkdocs/tests/structure/file_tests.py
+++ b/mkdocs/tests/structure/file_tests.py
@@ -277,6 +277,15 @@ class TestFiles(PathAssertionMixin, unittest.TestCase):
         self.assertFalse(f.is_javascript())
         self.assertTrue(f.is_css())
 
+    def test_file_name_with_space(self):
+        f = File('foo bar.md', '/path/to/docs', '/path/to/site', use_directory_urls=False)
+        self.assertPathsEqual(f.src_path, 'foo bar.md')
+        self.assertPathsEqual(f.abs_src_path, '/path/to/docs/foo bar.md')
+        self.assertPathsEqual(f.dest_path, 'foo bar.html')
+        self.assertPathsEqual(f.abs_dest_path, '/path/to/site/foo bar.html')
+        self.assertEqual(f.url, 'foo%20bar.html')
+        self.assertEqual(f.name, 'foo bar')
+
     def test_files(self):
         fs = [
             File('index.md', '/path/to/docs', '/path/to/site', use_directory_urls=True),
diff --git a/mkdocs/tests/structure/page_tests.py b/mkdocs/tests/structure/page_tests.py
index 6a076cd1..f229c8cb 100644
--- a/mkdocs/tests/structure/page_tests.py
+++ b/mkdocs/tests/structure/page_tests.py
@@ -689,6 +689,20 @@ class RelativePathExtensionTests(LogTestCase):
             '<p><a href="sub2/non-index/">link</a></p>'  # No trailing /
         )
 
+    @mock.patch('io.open', mock.mock_open(read_data='[link](file%20name.md)'))
+    def test_relative_html_link_with_encoded_space(self):
+        self.assertEqual(
+            self.get_rendered_result(['index.md', 'file name.md']),
+            '<p><a href="file%20name/">link</a></p>'
+        )
+
+    @mock.patch('io.open', mock.mock_open(read_data='[link](file name.md)'))
+    def test_relative_html_link_with_unencoded_space(self):
+        self.assertEqual(
+            self.get_rendered_result(['index.md', 'file name.md']),
+            '<p><a href="file%20name/">link</a></p>'
+        )
+
     @mock.patch('io.open', mock.mock_open(read_data='[link](../index.md)'))
     def test_relative_html_link_parent_index(self):
         self.assertEqual(
diff --git a/mkdocs/utils/__init__.py b/mkdocs/utils/__init__.py
index c728cb79..2fa51607 100644
--- a/mkdocs/utils/__init__.py
+++ b/mkdocs/utils/__init__.py
@@ -23,9 +23,13 @@ from mkdocs import exceptions
 
 try:                                                        # pragma: no cover
     from urllib.parse import urlparse, urlunparse, urljoin  # noqa
+    from urllib.parse import quote as urlquote              # noqa
+    from urllib.parse import unquote as urlunquote          # noqa
     from collections import UserDict                        # noqa
 except ImportError:                                         # pragma: no cover
     from urlparse import urlparse, urlunparse, urljoin      # noqa
+    from urllib import quote                                # noqa
+    from urllib import unquote                              # noqa
     from UserDict import UserDict                           # noqa
 
 
@@ -38,6 +42,12 @@ else:                           # pragma: no cover
     string_types = basestring,  # noqa
     text_type = unicode         # noqa
 
+    def urlunquote(path):  # noqa
+        return unquote(path.encode('utf8', errors='backslashreplace')).decode('utf8', errors='replace')
+
+    def urlquote(path):  # noqa
+        return quote(path.encode('utf8', errors='backslashreplace')).decode('utf8', errors='replace')
+
 log = logging.getLogger(__name__)
 
 markdown_extensions = [