diff --git a/CMakeLists.txt b/CMakeLists.txt
index 2a61e61aa..cd058c570 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -109,9 +109,11 @@ endif (WIN32)
 find_package(OGRE REQUIRED)
 find_package(Boost REQUIRED COMPONENTS system filesystem program_options thread)
 find_package(OIS REQUIRED)
+find_package(Iconv REQUIRED)
 include_directories("."
     ${OGRE_INCLUDE_DIR} ${OGRE_INCLUDE_DIR}/Ogre
     ${OIS_INCLUDE_DIR} ${Boost_INCLUDE_DIR}
+	${ICONV_INCLUDE_DIR}
     ${PLATFORM_INCLUDE_DIR}
     ${CMAKE_HOME_DIRECTORY}/extern/caelum/include
     ${CMAKE_HOME_DIRECTORY}/extern/mygui_3.0.1/MyGUIEngine/include
diff --git a/apps/openmw/CMakeLists.txt b/apps/openmw/CMakeLists.txt
index 4bbc5db59..260ebcd70 100644
--- a/apps/openmw/CMakeLists.txt
+++ b/apps/openmw/CMakeLists.txt
@@ -117,6 +117,7 @@ target_link_libraries(openmw
   ${OGRE_LIBRARIES}
   ${OIS_LIBRARIES}
   ${Boost_LIBRARIES}
+  ${ICONV_LIBRARIES}
   caelum
   MyGUIEngine
   MyGUI.OgrePlatform
diff --git a/cmake/FindIconv.cmake b/cmake/FindIconv.cmake
new file mode 100644
index 000000000..000e09b84
--- /dev/null
+++ b/cmake/FindIconv.cmake
@@ -0,0 +1,64 @@
+# - Try to find Iconv 
+# Once done this will define 
+# 
+#  ICONV_FOUND - system has Iconv 
+#  ICONV_INCLUDE_DIR - the Iconv include directory 
+#  ICONV_LIBRARIES - Link these to use Iconv 
+#  ICONV_SECOND_ARGUMENT_IS_CONST - the second argument for iconv() is const
+# 
+include(CheckCCompilerFlag)
+include(CheckCXXSourceCompiles)
+
+IF (ICONV_INCLUDE_DIR AND ICONV_LIBRARIES)
+  # Already in cache, be silent
+  SET(ICONV_FIND_QUIETLY TRUE)
+ENDIF (ICONV_INCLUDE_DIR AND ICONV_LIBRARIES)
+
+FIND_PATH(ICONV_INCLUDE_DIR iconv.h) 
+ 
+FIND_LIBRARY(ICONV_LIBRARIES NAMES iconv libiconv c)
+ 
+IF(ICONV_INCLUDE_DIR AND ICONV_LIBRARIES) 
+   SET(ICONV_FOUND TRUE) 
+ENDIF(ICONV_INCLUDE_DIR AND ICONV_LIBRARIES) 
+
+set(CMAKE_REQUIRED_INCLUDES ${ICONV_INCLUDE_DIR})
+set(CMAKE_REQUIRED_LIBRARIES ${ICONV_LIBRARIES})
+IF(ICONV_FOUND)
+  check_c_compiler_flag("-Werror" ICONV_HAVE_WERROR)
+  set (CMAKE_C_FLAGS_BACKUP "${CMAKE_C_FLAGS}")
+  if(ICONV_HAVE_WERROR)
+    set (CMAKE_C_FLAGS "${CMAKE_C_FLAGS} -Werror")
+  endif(ICONV_HAVE_WERROR)
+  check_c_source_compiles("
+  #include <iconv.h>
+  int main(){
+    iconv_t conv = 0;
+    const char* in = 0;
+    size_t ilen = 0;
+    char* out = 0;
+    size_t olen = 0;
+    iconv(conv, &in, &ilen, &out, &olen);
+    return 0;
+  }
+" ICONV_SECOND_ARGUMENT_IS_CONST )
+  set (CMAKE_C_FLAGS "${CMAKE_C_FLAGS_BACKUP}")
+ENDIF(ICONV_FOUND)
+set(CMAKE_REQUIRED_INCLUDES)
+set(CMAKE_REQUIRED_LIBRARIES)
+
+IF(ICONV_FOUND) 
+  IF(NOT ICONV_FIND_QUIETLY) 
+    MESSAGE(STATUS "Found Iconv: ${ICONV_LIBRARIES}") 
+  ENDIF(NOT ICONV_FIND_QUIETLY) 
+ELSE(ICONV_FOUND) 
+  IF(Iconv_FIND_REQUIRED) 
+    MESSAGE(FATAL_ERROR "Could not find Iconv") 
+  ENDIF(Iconv_FIND_REQUIRED) 
+ENDIF(ICONV_FOUND) 
+
+MARK_AS_ADVANCED(
+  ICONV_INCLUDE_DIR
+  ICONV_LIBRARIES
+  ICONV_SECOND_ARGUMENT_IS_CONST
+)
diff --git a/components/esm/esm_reader.hpp b/components/esm/esm_reader.hpp
index 7db21323f..098afc513 100644
--- a/components/esm/esm_reader.hpp
+++ b/components/esm/esm_reader.hpp
@@ -8,6 +8,8 @@
 #include <vector>
 #include <sstream>
 #include <iomanip>
+#include <errno.h>
+#include <iconv.h>
 
 #include <libs/mangle/stream/stream.hpp>
 #include <libs/mangle/stream/servers/file_stream.hpp>
@@ -613,7 +615,91 @@ public:
     // Convert to std::string and return
     std::string res(ptr,size);
     delete[] ptr;
-    return res;
+    return convertToUTF8(res);
+  }
+
+  // Convert a string from ISO-8859-1 encoding to UTF-8
+  std::string convertToUTF8(std::string input)
+  {
+    std::string output = "";
+
+    //create convert description
+    iconv_t cd = iconv_open("UTF-8", "ISO-8859-1");
+
+    if (cd == (iconv_t)-1) 	//error handling
+    {
+      std::string errMsg = "Creating description for UTF-8 converting failed: ";
+
+      switch (errno) 		//detailed error messages (maybe it contains too much detail :)
+      {
+        case EMFILE:
+          errMsg += "{OPEN_MAX} files descriptors are currently open in the calling process.";
+        case ENFILE:
+          errMsg += "Too many files are currently open in the system.";
+        case ENOMEM:
+          errMsg +="Insufficient storage space is available.";
+        case EINVAL:
+          errMsg += "The conversion specified by fromcode and tocode is not supported by the implementation.";
+
+        default:
+          errMsg += "Unknown Error\n";
+      }
+
+      fail(errMsg);
+
+    }
+    else
+    {
+      const size_t inputSize = input.size();
+
+      if (inputSize) 	//input is not empty
+      {
+        //convert function doesn't accept const char *, therefore copy content into an char *
+        std::vector<char> inputBuffer(input.begin(), input.end());
+        char *inputBufferBegin = &inputBuffer[0];
+
+        size_t inputBytesLeft = inputSize;	//bytes to convert
+
+        static const size_t outputSize = 1000;
+        size_t outputBytesLeft;
+
+        char outputBuffer[outputSize];
+        char *outputBufferBegin;
+
+        while (inputBytesLeft > 0 )
+        {
+          outputBytesLeft = outputSize;
+          outputBufferBegin = outputBuffer;
+
+          if (iconv(cd, &inputBufferBegin, &inputBytesLeft, &outputBufferBegin, &outputBytesLeft) == (size_t)-1)
+          {
+            switch (errno)
+            {
+              case E2BIG:	//outputBuffer is full
+                output += std::string(outputBuffer, outputSize);
+                break;
+              case EILSEQ:
+                fail("Iconv: Invalid multibyte sequence.\n");
+                break;
+              case EINVAL:
+                fail("Iconv: Incomplete multibyte sequence.\n");
+                break;
+              default:
+                fail("Iconv: Unknown Error\n");
+            }
+
+          }
+        }
+
+        //read only relevant bytes from outputBuffer
+        output += std::string(outputBuffer, outputSize - outputBytesLeft);
+
+      }
+    }
+
+    iconv_close (cd);
+
+    return output;
   }
 
   void skip(int bytes) { esm->seek(esm->tell()+bytes); }