diff --git a/git/refs/symbolic.py b/git/refs/symbolic.py
index 020de5e13..3642ce671 100644
--- a/git/refs/symbolic.py
+++ b/git/refs/symbolic.py
@@ -149,7 +149,7 @@ def _iter_packed_refs(cls, repo: "Repo") -> Iterator[Tuple[str, str]]:
             The packed refs file will be kept open as long as we iterate.
         """
         try:
-            with open(cls._get_packed_refs_path(repo), "rt", encoding="UTF-8") as fp:
+            with open(cls._get_packed_refs_path(repo), "rt", encoding="UTF-8", errors="surrogateescape") as fp:
                 for line in fp:
                     line = line.strip()
                     if not line:
diff --git a/test/test_refs.py b/test/test_refs.py
index d77b34eba..43e50a905 100644
--- a/test/test_refs.py
+++ b/test/test_refs.py
@@ -77,6 +77,19 @@ def test_from_pathlike(self):
         # Check remoteness
         assert Reference(self.rorepo, PathLikeMock("refs/remotes/origin")).is_remote()
 
+    def test_iter_packed_refs_with_non_utf8_name(self):
+        with tempfile.TemporaryDirectory() as tdir:
+            with self._repo_with_initial_commit(Path(tdir)) as repo:
+                packed_refs_path = Path(Reference._get_packed_refs_path(repo))
+                hexsha = repo.head.commit.hexsha
+                packed_refs_path.write_bytes(
+                    b"# pack-refs with: peeled\n" + hexsha.encode("ascii") + b" refs/tags/non-utf8-\xe9\n"
+                )
+
+                tag_data = [(tag.commit.hexsha, tag.path) for tag in repo.tags]
+
+        self.assertEqual(tag_data, [(hexsha, "refs/tags/non-utf8-\udce9")])
+
     def test_tag_base(self):
         tag_object_refs = []
         for tag in self.rorepo.tags: