diff --git a/src/ifcopenshell-python/test/test_parse.py b/src/ifcopenshell-python/test/test_parse.py
index d40101333e..ad2ae40f0b 100644
--- a/src/ifcopenshell-python/test/test_parse.py
+++ b/src/ifcopenshell-python/test/test_parse.py
@@ -1,3 +1,5 @@
+import pytest
+
 import ifcopenshell
 
 
@@ -32,3 +34,25 @@ def test_reference_to_undefined_owning_instance_simple_type():
     data = "ISO-10303-21;HEADER;FILE_DESCRIPTION();FILE_NAME();FILE_SCHEMA(('IFC4'));#=IFCPROJECT((#))#4=IFCSIUNIT("
     ifcopenshell.file.from_string(data)
     print(ifcopenshell.get_log())
+
+
+@pytest.mark.parametrize(
+    "encoded,expected",
+    [
+        ("AA\\X2\\D83DDE00\\X0\\BB", "AA\U0001f600BB"),
+        ("AA\\X4\\0001F600\\X0\\BB", "AA\U0001f600BB"),
+        ("AA\\X2\\00E9\\X0\\BB", "AAéBB"),
+        ("\\X2\\00E9D83DDE0000E9\\X0\\", "é\U0001f600é"),
+        ("\\X2\\D83DDE00D83DDE01\\X0\\", "\U0001f600\U0001f601"),
+        ("Bld \\X2\\5EFA7BC9\\X0\\ ok", "Bld 建築 ok"),
+    ],
+)
+def test_x2_utf16_surrogate_pairs(encoded, expected):
+    data = (
+        "ISO-10303-21;HEADER;FILE_DESCRIPTION((''),'2;1');FILE_NAME('','',(''),(''),'','','');"
+        "FILE_SCHEMA(('IFC4'));ENDSEC;DATA;"
+        "#1=IFCPROJECT('0YvctVUKr0kugbFTf53O9L',$,'" + encoded + "',$,$,$,$,$,$);"
+        "ENDSEC;END-ISO-10303-21;"
+    )
+    f = ifcopenshell.file.from_string(data)
+    assert f.by_id(1).Name == expected
diff --git a/src/ifcparse/IfcCharacterDecoder.cpp b/src/ifcparse/IfcCharacterDecoder.cpp
index 019499a49e..6b8fd7562d 100644
--- a/src/ifcparse/IfcCharacterDecoder.cpp
+++ b/src/ifcparse/IfcCharacterDecoder.cpp
@@ -98,6 +98,7 @@ namespace {
         int codepage = 1;
         unsigned int hex = 0;
         unsigned int hex_count = 0;
+        unsigned int high_surrogate = 0;
 
         while ((current_char = stream_.peek()) != 0) {
             if (EXPECTS_CHARACTER(parse_state)) {
@@ -111,7 +112,7 @@ namespace {
                 if (((parse_state & ALPHABET_DEFINITION) != 0U) ||
                     ((parse_state & IGNORED_DIRECTIVE) != 0U) ||
                     ((parse_state & ENDEXTENDED_0) != 0U)) {
-                    parse_state = hex = hex_count = 0;
+                    parse_state = hex = hex_count = high_surrogate = 0;
                 } else if ((parse_state & ENCOUNTERED_HEX) != 0U) {
                     parse_state += THIRD_SOLIDUS;
                     parse_state -= ENCOUNTERED_HEX;
@@ -149,7 +150,23 @@ namespace {
                 if ((hex_count == 2 && ((parse_state & EXTENDED2) == 0U)) ||
                     (hex_count == 4 && ((parse_state & EXTENDED4) == 0U)) ||
                     (hex_count == 8)) {
-                    builder_.push_back(hex);
+                    // \X2\ carries UTF-16 code units, so surrogate pairs form a single codepoint.
+                    bool awaiting_low_surrogate = false;
+                    auto codepoint = static_cast<std::u32string::value_type>(hex);
+                    if (hex_count == 4) {
+                        if (hex >= 0xd800 && hex <= 0xdbff) {
+                            high_surrogate = hex;
+                            awaiting_low_surrogate = true;
+                        } else if ((high_surrogate != 0U) && hex >= 0xdc00 && hex <= 0xdfff) {
+                            codepoint = 0x10000 + ((high_surrogate - 0xd800) << 10) + (hex - 0xdc00);
+                            high_surrogate = 0;
+                        } else {
+                            high_surrogate = 0;
+                        }
+                    }
+                    if (!awaiting_low_surrogate) {
+                        builder_.push_back(codepoint);
+                    }
                     if (hex_count == 2) {
                         parse_state = 0;
                     } else {