diff --git a/docs/migration.md b/docs/migration.md
index afe0953631..408dcf57bd 100644
--- a/docs/migration.md
+++ b/docs/migration.md
@@ -826,6 +826,37 @@ Reading a missing resource now returns JSON-RPC error code `-32602` (invalid par
 
 The underlying lookups now raise typed exceptions instead of `ValueError`. `ResourceManager.get_resource()` raises `ResourceNotFoundError` when no resource or template matches the URI, and `ResourceTemplate.create_resource()` raises `ResourceError` when the template function fails. Neither subclasses `ValueError`, so callers catching `ValueError` should switch to `ResourceNotFoundError` / `ResourceError` (both importable from `mcp.server.mcpserver.exceptions`; `ResourceNotFoundError` subclasses `ResourceError`).
 
+### `Resource` classes reject unknown keyword arguments
+
+The `Resource` base class now sets `extra="forbid"`, so every resource class — `TextResource`, `BinaryResource`, `FunctionResource`, `FileResource`, `HttpResource`, `DirectoryResource`, and your own subclasses — raises `ValidationError` on an unrecognised keyword argument instead of silently dropping it. Previously a typo'd or since-removed parameter (such as `FileResource(is_binary=...)`, below) was accepted and ignored. Remove any stray keyword arguments; if a subclass needs to accept arbitrary extras, set its own `model_config = ConfigDict(extra="allow")`.
+
+### `FileResource.is_binary` replaced by `encoding`
+
+`FileResource` used to take `is_binary: bool` and guess its default from `mime_type` (`text/*` → text, anything else → bytes). Two problems fell out of that: `is_binary=False` could not actually be set — `False` doubled as the "not given" sentinel, so `mime_type="application/json"` always came back as a base64 blob — and text reads used `Path.read_text()` with no encoding, i.e. the platform locale (cp1252 on Windows).
+
+The field is now `encoding: str | None`. A string means "decode with this encoding and serve as text"; `None` means "read bytes and serve as a blob". When omitted it defaults to the `charset` declared in `mime_type` if there is one, otherwise `"utf-8-sig"` for textual mime types (`text/*`, `application/json`, `application/xml`, and any `+json`/`+xml` suffix) and `None` for everything else, so JSON and XML files are now served as text without any configuration. `utf-8-sig` is plain UTF-8 that also drops a byte-order mark if the file has one; a declared `charset=` is used as-is.
+
+Passing the removed `is_binary=` argument now raises a `ValidationError` at construction (see the section above) rather than being silently ignored. A misspelled `encoding` also fails at construction rather than on the first read.
+
+Two edge cases to check. A non-UTF-8 file with a *newly* textual mime type (say a UTF-16 `application/xml`) previously shipped byte-exact as a blob and now fails to decode. And an existing `text/*` file that was only readable through your platform's locale encoding (v1 decoded these with the locale, not UTF-8) now fails too. In both cases set `encoding` to the file's real encoding, or `encoding=None` to serve the bytes as a blob.
+
+**Before (v1):**
+
+```python
+FileResource(uri="file:///logo.png", path=logo, mime_type="image/png", is_binary=True)
+FileResource(uri="file:///notes.txt", path=notes)  # text, decoded with the locale encoding
+```
+
+**After (v2):**
+
+```python
+FileResource(uri="file:///logo.png", path=logo, mime_type="image/png")  # bytes, from mime_type
+FileResource(uri="file:///notes.txt", path=notes)  # text, decoded as UTF-8 (BOM tolerated)
+FileResource(uri="file:///data.json", path=data, mime_type="application/json")  # now text, not a blob
+```
+
+Pass `encoding=None` to force a blob, or `encoding="latin-1"` (etc.) to decode a text file that isn't UTF-8.
+
 ### Resource templates: matching behavior changes
 
 Resource template matching has been rewritten with [RFC 6570](https://datatracker.ietf.org/doc/html/rfc6570) support.
diff --git a/src/mcp/server/mcpserver/resources/base.py b/src/mcp/server/mcpserver/resources/base.py
index f7bedf6cbe..a1d9cebf3f 100644
--- a/src/mcp/server/mcpserver/resources/base.py
+++ b/src/mcp/server/mcpserver/resources/base.py
@@ -16,7 +16,7 @@
 class Resource(BaseModel, abc.ABC):
     """Base class for all resources."""
 
-    model_config = ConfigDict(validate_default=True)
+    model_config = ConfigDict(validate_default=True, extra="forbid")
 
     uri: str = Field(default=..., description="URI of the resource")
     name: str | None = Field(description="Name of the resource", default=None)
diff --git a/src/mcp/server/mcpserver/resources/types.py b/src/mcp/server/mcpserver/resources/types.py
index e6f00dec58..2edf342337 100644
--- a/src/mcp/server/mcpserver/resources/types.py
+++ b/src/mcp/server/mcpserver/resources/types.py
@@ -4,6 +4,7 @@
 
 import json
 from collections.abc import Callable
+from functools import partial
 from pathlib import Path
 from typing import Any
 
@@ -13,12 +14,34 @@
 import pydantic
 import pydantic_core
 from mcp_types import Annotations, Icon, InputRequiredResult
-from pydantic import Field, ValidationInfo, validate_call
+from pydantic import Field, validate_call
 
 from mcp.server.mcpserver.resources.base import Resource
 from mcp.shared._callable_inspection import is_async_callable
 from mcp.shared.exceptions import MCPError
 
+# `application/*` types that are textual but predate the `+json`/`+xml`
+# structured-syntax suffixes, so the suffix rule below can't catch them.
+_TEXTUAL_APPLICATION_TYPES = frozenset({"application/json", "application/xml"})
+
+
+def _default_file_encoding(mime_type: str) -> str | None:
+    """The encoding a file of this mime type is decoded with by default.
+
+    A declared `charset=` parameter wins. Otherwise textual types (`text/*`, JSON,
+    XML) are `utf-8-sig` — UTF-8 that also tolerates a byte-order mark — and
+    everything else is bytes (None).
+    """
+    essence, *params = (part.strip() for part in mime_type.split(";"))
+    for param in params:
+        name, _, value = param.partition("=")
+        if name.strip().lower() == "charset" and value:
+            return value.strip().strip('"')
+    essence = essence.lower()
+    if essence.startswith("text/") or essence.endswith(("+json", "+xml")) or essence in _TEXTUAL_APPLICATION_TYPES:
+        return "utf-8-sig"
+    return None
+
 
 class TextResource(Resource):
     """A resource that reads from a string."""
@@ -122,17 +145,17 @@ def from_function(
 class FileResource(Resource):
     """A resource that reads from a file.
 
-    Set is_binary=True to read the file as binary data instead of text.
+    The file is decoded with `encoding` and served as text, or read as bytes and
+    served as a base64 blob when `encoding` is None. When `encoding` is omitted it
+    defaults to the `charset` declared in `mime_type`, else `"utf-8-sig"` for
+    textual mime types (`text/*`, JSON, XML) and None for everything else; pass
+    it explicitly to override either way.
     """
 
     path: Path = Field(description="Path to the file")
-    is_binary: bool = Field(
-        default=False,
-        description="Whether to read the file as binary data",
-    )
-    mime_type: str = Field(
-        default="text/plain",
-        description="MIME type of the resource content",
+    encoding: str | None = Field(
+        default_factory=lambda data: _default_file_encoding(data["mime_type"]),
+        description="Text encoding used to decode the file, or None to serve its bytes as a blob",
     )
 
     @pydantic.field_validator("path")
@@ -143,21 +166,27 @@ def validate_absolute_path(cls, path: Path) -> Path:
             raise ValueError("Path must be absolute")
         return path
 
-    @pydantic.field_validator("is_binary")
+    @pydantic.field_validator("encoding")
     @classmethod
-    def set_binary_from_mime_type(cls, is_binary: bool, info: ValidationInfo) -> bool:
-        """Set is_binary based on mime_type if not explicitly set."""
-        if is_binary:
-            return True
-        mime_type = info.data.get("mime_type", "text/plain")
-        return not mime_type.startswith("text/")
+    def validate_text_encoding(cls, encoding: str | None) -> str | None:
+        """Ensure the encoding names a usable text codec, so a mistake fails at construction not at read."""
+        if encoding is not None:
+            # Decoding a probe byte rejects both unknown names and codecs that
+            # aren't text encodings (base64_codec, rot13, ...) via LookupError.
+            try:
+                b"x".decode(encoding)
+            except LookupError as e:
+                raise ValueError(str(e)) from e
+            except UnicodeError:
+                pass  # a real text encoding; the probe byte just doesn't decode in it
+        return encoding
 
     async def read(self) -> str | bytes:
         """Read the file content."""
         try:
-            if self.is_binary:
+            if self.encoding is None:
                 return await anyio.to_thread.run_sync(self.path.read_bytes)
-            return await anyio.to_thread.run_sync(self.path.read_text)
+            return await anyio.to_thread.run_sync(partial(self.path.read_text, encoding=self.encoding))
         except Exception as e:
             raise ValueError(f"Error reading file {self.path}: {e}")
 
diff --git a/tests/server/mcpserver/resources/test_file_resources.py b/tests/server/mcpserver/resources/test_file_resources.py
index 94885113a9..042ea422aa 100644
--- a/tests/server/mcpserver/resources/test_file_resources.py
+++ b/tests/server/mcpserver/resources/test_file_resources.py
@@ -1,8 +1,10 @@
+import codecs
 import os
 from pathlib import Path
 from tempfile import NamedTemporaryFile
 
 import pytest
+from pydantic import ValidationError
 
 from mcp.server.mcpserver.resources import FileResource
 
@@ -24,93 +26,173 @@ def temp_file():
         pass  # File was already deleted by the test
 
 
-class TestFileResource:
-    """Test FileResource functionality."""
+def test_file_resource_creation(temp_file: Path):
+    resource = FileResource(
+        uri=temp_file.as_uri(),
+        name="test",
+        description="test file",
+        path=temp_file,
+    )
+    assert str(resource.uri) == temp_file.as_uri()
+    assert resource.name == "test"
+    assert resource.description == "test file"
+    assert resource.mime_type == "text/plain"
+    assert resource.path == temp_file
+    assert resource.encoding == "utf-8-sig"
 
-    def test_file_resource_creation(self, temp_file: Path):
-        """Test creating a FileResource."""
-        resource = FileResource(
-            uri=temp_file.as_uri(),
-            name="test",
-            description="test file",
-            path=temp_file,
-        )
-        assert str(resource.uri) == temp_file.as_uri()
-        assert resource.name == "test"
-        assert resource.description == "test file"
-        assert resource.mime_type == "text/plain"  # default
-        assert resource.path == temp_file
-        assert resource.is_binary is False  # default
-
-    def test_file_resource_str_path_conversion(self, temp_file: Path):
-        """Test FileResource handles string paths."""
-        resource = FileResource(
-            uri=f"file://{temp_file}",
-            name="test",
-            path=Path(str(temp_file)),
-        )
-        assert isinstance(resource.path, Path)
-        assert resource.path.is_absolute()
 
-    @pytest.mark.anyio
-    async def test_read_text_file(self, temp_file: Path):
-        """Test reading a text file."""
-        resource = FileResource(
-            uri=f"file://{temp_file}",
+def test_file_resource_str_path_conversion(temp_file: Path):
+    resource = FileResource(
+        uri=f"file://{temp_file}",
+        name="test",
+        path=Path(str(temp_file)),
+    )
+    assert isinstance(resource.path, Path)
+    assert resource.path.is_absolute()
+
+
+@pytest.mark.anyio
+async def test_read_text_file(temp_file: Path):
+    resource = FileResource(
+        uri=f"file://{temp_file}",
+        name="test",
+        path=temp_file,
+    )
+    content = await resource.read()
+    assert content == "test content"
+    assert resource.mime_type == "text/plain"
+
+
+@pytest.mark.anyio
+async def test_encoding_none_reads_bytes(temp_file: Path):
+    resource = FileResource(
+        uri=f"file://{temp_file}",
+        name="test",
+        path=temp_file,
+        encoding=None,
+    )
+    content = await resource.read()
+    assert isinstance(content, bytes)
+    assert content == b"test content"
+
+
+@pytest.mark.parametrize(
+    "mime_type",
+    [
+        "text/plain",
+        "text/html",
+        "application/json",
+        "application/xml",
+        "application/vnd.api+json",
+        "image/svg+xml",
+    ],
+)
+def test_textual_mime_types_default_to_utf8_sig(temp_file: Path, mime_type: str):
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type=mime_type)
+    assert resource.encoding == "utf-8-sig"
+
+
+@pytest.mark.parametrize("mime_type", ["image/png", "application/octet-stream", "application/pdf"])
+def test_binary_mime_types_default_to_no_encoding(temp_file: Path, mime_type: str):
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type=mime_type)
+    assert resource.encoding is None
+
+
+@pytest.mark.parametrize(
+    "mime_type",
+    ["text/plain; charset=iso-8859-1", 'text/plain; format=flowed; charset="iso-8859-1"'],
+)
+def test_declared_charset_becomes_default_encoding(temp_file: Path, mime_type: str):
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type=mime_type)
+    assert resource.encoding == "iso-8859-1"
+
+
+def test_removed_is_binary_kwarg_is_rejected(temp_file: Path):
+    """The v1 `is_binary` parameter fails loudly at construction rather than being ignored."""
+    with pytest.raises(ValidationError, match="is_binary"):
+        FileResource.model_validate({"uri": temp_file.as_uri(), "path": temp_file, "is_binary": True})
+
+
+def test_unknown_encoding_is_rejected(temp_file: Path):
+    """A codec typo fails at construction rather than on the first read."""
+    with pytest.raises(ValidationError, match="unknown encoding: not-a-codec"):
+        FileResource(uri=temp_file.as_uri(), path=temp_file, encoding="not-a-codec")
+
+
+def test_unknown_declared_charset_is_rejected(temp_file: Path):
+    with pytest.raises(ValidationError, match="unknown encoding"):
+        FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type="text/plain; charset=not-a-codec")
+
+
+def test_multibyte_encoding_is_accepted(temp_file: Path):
+    """UTF-16 can't decode a lone probe byte but is still a valid text encoding."""
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, encoding="utf-16")
+    assert resource.encoding == "utf-16"
+
+
+def test_non_text_codec_is_rejected(temp_file: Path):
+    """A registered codec that isn't a text encoding (bytes-to-bytes) is not a usable encoding."""
+    with pytest.raises(ValidationError, match="not a text encoding"):
+        FileResource(uri=temp_file.as_uri(), path=temp_file, encoding="base64_codec")
+
+
+@pytest.mark.anyio
+async def test_json_file_is_served_as_text_by_default(temp_file: Path):
+    """The mime type that motivated the encoding field: JSON must not become a base64 blob."""
+    temp_file.write_text('{"a": 1}', encoding="utf-8")
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type="application/json")
+    assert await resource.read() == '{"a": 1}'
+
+
+@pytest.mark.anyio
+async def test_utf8_bom_is_stripped_by_default(temp_file: Path):
+    """The default utf-8-sig decoding drops a byte-order mark that would otherwise break JSON parsers."""
+    temp_file.write_bytes(codecs.BOM_UTF8 + b'{"a": 1}')
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type="application/json")
+    assert await resource.read() == '{"a": 1}'
+
+
+@pytest.mark.anyio
+async def test_explicit_encoding_overrides_default(temp_file: Path):
+    """An explicit encoding wins over the mime-type default and is what decodes the file."""
+    temp_file.write_bytes("naïve".encode("latin-1"))
+    resource = FileResource(uri=temp_file.as_uri(), path=temp_file, mime_type="image/png", encoding="latin-1")
+    assert resource.encoding == "latin-1"
+    assert await resource.read() == "naïve"
+
+
+def test_relative_path_error():
+    with pytest.raises(ValueError, match="Path must be absolute"):
+        FileResource(
+            uri="file:///test.txt",
             name="test",
-            path=temp_file,
+            path=Path("test.txt"),
         )
-        content = await resource.read()
-        assert content == "test content"
-        assert resource.mime_type == "text/plain"
 
-    @pytest.mark.anyio
-    async def test_read_binary_file(self, temp_file: Path):
-        """Test reading a file as binary."""
+
+@pytest.mark.anyio
+async def test_missing_file_error(temp_file: Path):
+    missing = temp_file.parent / "missing.txt"
+    resource = FileResource(
+        uri="file:///missing.txt",
+        name="test",
+        path=missing,
+    )
+    with pytest.raises(ValueError, match="Error reading file"):
+        await resource.read()
+
+
+@pytest.mark.skipif(os.name == "nt", reason="File permissions behave differently on Windows")
+@pytest.mark.anyio
+async def test_permission_error(temp_file: Path):  # pragma: lax no cover
+    temp_file.chmod(0o000)  # Remove all permissions
+    try:
         resource = FileResource(
-            uri=f"file://{temp_file}",
+            uri=temp_file.as_uri(),
             name="test",
             path=temp_file,
-            is_binary=True,
-        )
-        content = await resource.read()
-        assert isinstance(content, bytes)
-        assert content == b"test content"
-
-    def test_relative_path_error(self):
-        """Test error on relative path."""
-        with pytest.raises(ValueError, match="Path must be absolute"):
-            FileResource(
-                uri="file:///test.txt",
-                name="test",
-                path=Path("test.txt"),
-            )
-
-    @pytest.mark.anyio
-    async def test_missing_file_error(self, temp_file: Path):
-        """Test error when file doesn't exist."""
-        # Create path to non-existent file
-        missing = temp_file.parent / "missing.txt"
-        resource = FileResource(
-            uri="file:///missing.txt",
-            name="test",
-            path=missing,
         )
         with pytest.raises(ValueError, match="Error reading file"):
             await resource.read()
-
-    @pytest.mark.skipif(os.name == "nt", reason="File permissions behave differently on Windows")
-    @pytest.mark.anyio
-    async def test_permission_error(self, temp_file: Path):  # pragma: lax no cover
-        """Test reading a file without permissions."""
-        temp_file.chmod(0o000)  # Remove all permissions
-        try:
-            resource = FileResource(
-                uri=temp_file.as_uri(),
-                name="test",
-                path=temp_file,
-            )
-            with pytest.raises(ValueError, match="Error reading file"):
-                await resource.read()
-        finally:
-            temp_file.chmod(0o644)  # Restore permissions
+    finally:
+        temp_file.chmod(0o644)  # Restore permissions