diff --git a/mypy/build.py b/mypy/build.py
index a55fe4eb92d5..09952f37aa28 100644
--- a/mypy/build.py
+++ b/mypy/build.py
@@ -3191,31 +3191,10 @@ def get_source(self) -> str:
         with self.wrap_context():
             source = self.source
             if self.path and source is None:
-                try:
+                with self.handle_file_read_errors():
                     path = manager.maybe_swap_for_shadow_path(self.path)
                     source = decode_python_encoding(manager.fscache.read(path))
                     self.source_hash = manager.fscache.hash_digest(path)
-                except OSError as ioerr:
-                    # ioerr.strerror differs for os.stat failures between Windows and
-                    # other systems, but os.strerror(ioerr.errno) does not, so we use that.
-                    # (We want the error messages to be platform-independent so that the
-                    # tests have predictable output.)
-                    assert ioerr.errno is not None
-                    raise CompileError(
-                        [
-                            "mypy: error: Cannot read file '{}': {}".format(
-                                self.path.replace(os.getcwd() + os.sep, ""),
-                                os.strerror(ioerr.errno),
-                            )
-                        ],
-                        module_with_blocker=self.id,
-                    ) from ioerr
-                except (UnicodeDecodeError, DecodeError) as decodeerr:
-                    if self.path.endswith(".pyd"):
-                        err = f"{self.path}: error: Stubgen does not support .pyd files"
-                    else:
-                        err = f"{self.path}: error: Cannot decode file: {str(decodeerr)}"
-                    raise CompileError([err], module_with_blocker=self.id) from decodeerr
             elif self.path and manager.fscache.isdir(self.path):
                 source = ""
                 self.source_hash = ""
@@ -3229,11 +3208,37 @@ def get_source(self) -> str:
         self.time_spent_us += time_spent_us(t0)
         return source
 
+    @contextlib.contextmanager
+    def handle_file_read_errors(self) -> Iterator[None]:
+        try:
+            yield
+        except OSError as ioerr:
+            # ioerr.strerror differs for os.stat failures between Windows and
+            # other systems, but os.strerror(ioerr.errno) does not, so we use that.
+            # (We want the error messages to be platform-independent so that the
+            # tests have predictable output.)
+            assert ioerr.errno is not None
+            err_path = self.manager.errors.simplify_path(self.xpath)
+            raise CompileError(
+                [f"{err_path}: error: Cannot read file: {os.strerror(ioerr.errno)}"],
+                module_with_blocker=self.id,
+            ) from ioerr
+        except (UnicodeDecodeError, DecodeError) as decodeerr:
+            err_path = self.manager.errors.simplify_path(self.xpath)
+            if err_path.endswith(".pyd"):
+                err = f"{err_path}: error: Stubgen does not support .pyd files"
+            else:
+                err = f"{err_path}: error: Cannot decode file: {str(decodeerr)}"
+            raise CompileError([err], module_with_blocker=self.id) from decodeerr
+
     def parse_file_inner(self, source: str | None, raw_data: FileRawData | None = None) -> None:
         t0 = time_ref()
-        self.tree = self.manager.parse_file(
-            self.id, self.xpath, source, options=self.options, raw_data=raw_data
-        )
+        # Error handling here matches get_source(), since in case of an error in
+        # the new parser we fall back to reading the file manually ourselves.
+        with self.handle_file_read_errors():
+            self.tree = self.manager.parse_file(
+                self.id, self.xpath, source, options=self.options, raw_data=raw_data
+            )
         self.time_spent_us += time_spent_us(t0)
 
     def parse_file(self, *, temporary: bool = False, raw_data: FileRawData | None = None) -> None:
diff --git a/mypy/nativeparse.py b/mypy/nativeparse.py
index d81c2878698a..622b199227bd 100644
--- a/mypy/nativeparse.py
+++ b/mypy/nativeparse.py
@@ -46,6 +46,7 @@
     read_str_opt,
     read_tag,
 )
+from mypy.errors import CompileError
 from mypy.nodes import (
     ARG_KINDS,
     ARG_POS,
@@ -157,7 +158,7 @@
     UnionType,
     UnpackType,
 )
-from mypy.util import unnamed_function
+from mypy.util import decode_python_encoding, hash_digest, unnamed_function
 
 TypeIgnores = list[tuple[int, list[str]]]
 
@@ -297,16 +298,40 @@ def parse_to_binary_ast(
     source: str | bytes | None = None,
     skip_function_bodies: bool = False,
 ) -> tuple[bytes, list[ParseError], TypeIgnores, bytes, bool, bool, str, list[tuple[int, str]]]:
-    ast_bytes, errors, ignores, import_bytes, ast_data = ast_serialize.parse(
-        filename,
-        source,
-        skip_function_bodies=skip_function_bodies,
-        python_version=options.python_version,
-        platform=options.platform,
-        always_true=options.always_true,
-        always_false=options.always_false,
-        cache_version=5,
-    )
+    try:
+        ast_bytes, errors, ignores, import_bytes, ast_data = ast_serialize.parse(
+            filename,
+            source,
+            skip_function_bodies=skip_function_bodies,
+            python_version=options.python_version,
+            platform=options.platform,
+            always_true=options.always_true,
+            always_false=options.always_false,
+            cache_version=5,
+        )
+    except ValueError as exc:
+        if source is None:
+            # Try reading/encoding manually, since native parser only supports UTF-8.
+            # If we still cannot decode, decode error will bubble up to caller.
+            with open(filename, "rb") as f:
+                source_bytes = f.read()
+                source = decode_python_encoding(source_bytes)
+            ast_bytes, errors, ignores, import_bytes, ast_data = ast_serialize.parse(
+                filename,
+                source,
+                skip_function_bodies=skip_function_bodies,
+                python_version=options.python_version,
+                platform=options.platform,
+                always_true=options.always_true,
+                always_false=options.always_false,
+                cache_version=5,
+            )
+            # Compute hash using original non-UTF-8 bytes, so that
+            # incremental mode works correctly.
+            ast_data["source_hash"] = hash_digest(source_bytes)
+        else:
+            # Convert everything unexpected to a standard-looking blocker.
+            raise CompileError([f"{filename}: error: Cannot parse file: {exc}"]) from exc
     return (
         ast_bytes,
         errors,
diff --git a/mypy/test/data.py b/mypy/test/data.py
index 574a343fa3f3..627f0bc86108 100644
--- a/mypy/test/data.py
+++ b/mypy/test/data.py
@@ -379,7 +379,7 @@ def setup(self) -> None:
                 # Write the first incremental steps
                 dir = os.path.dirname(path)
                 os.makedirs(dir, exist_ok=True)
-                with open(path, "w", encoding="utf8") as f:
+                with open(path, "w", encoding=choose_file_encoding(path)) as f:
                     f.write(content)
 
         for num, paths in self.deleted_paths.items():
@@ -831,6 +831,14 @@ def has_stable_flags(testcase: DataDrivenTestCase) -> bool:
     return True
 
 
+def choose_file_encoding(path: str) -> str:
+    base_name, _ = os.path.splitext(path)
+    if base_name.endswith("_latin1"):
+        return "latin-1"
+    else:
+        return "utf-8"
+
+
 class DataSuite:
     # option fields - class variables
     files: list[str]
diff --git a/mypy/test/helpers.py b/mypy/test/helpers.py
index 60fea32a637f..203e444e9a14 100644
--- a/mypy/test/helpers.py
+++ b/mypy/test/helpers.py
@@ -27,7 +27,13 @@
 from mypy.main import process_options
 from mypy.options import Options
 from mypy.test.config import test_data_prefix, test_temp_dir
-from mypy.test.data import DataDrivenTestCase, DeleteFile, UpdateFile, fix_cobertura_filename
+from mypy.test.data import (
+    DataDrivenTestCase,
+    DeleteFile,
+    UpdateFile,
+    choose_file_encoding,
+    fix_cobertura_filename,
+)
 
 skip = pytest.mark.skip
 
@@ -440,7 +446,7 @@ def write_and_fudge_mtime(content: str, target_path: str) -> None:
 
     dir = os.path.dirname(target_path)
     os.makedirs(dir, exist_ok=True)
-    with open(target_path, "w", encoding="utf-8") as target:
+    with open(target_path, "w", encoding=choose_file_encoding(target_path)) as target:
         target.write(content)
 
     if new_time:
diff --git a/mypy/test/test_nativeparse.py b/mypy/test/test_nativeparse.py
index d74ff99d5e5e..efe3be63c97c 100644
--- a/mypy/test/test_nativeparse.py
+++ b/mypy/test/test_nativeparse.py
@@ -1,8 +1,4 @@
-"""Tests for the experimental native mypy parser.
-
-To run these, you will need to manually install ast_serialize from
-https://github.com/mypyc/ast_serialize first (see the README for the details).
-"""
+"""Tests for the native mypy parser."""
 
 from __future__ import annotations
 
@@ -12,6 +8,7 @@
 import unittest
 from collections.abc import Iterator
 
+import pytest
 from librt.internal import ReadBuffer
 
 from mypy import defaults, nodes
@@ -27,36 +24,24 @@
 )
 from mypy.config_parser import parse_mypy_comments
 from mypy.errors import CompileError
+from mypy.nativeparse import (
+    State,
+    deserialize_imports,
+    native_parse,
+    parse_to_binary_ast,
+    read_statements,
+)
 from mypy.nodes import MypyFile, ParseError
 from mypy.options import Options
 from mypy.test.data import DataDrivenTestCase, DataSuite
 from mypy.test.helpers import assert_string_arrays_equal
 from mypy.util import get_mypy_comments
 
-# If the experimental ast_serialize module isn't installed, the following import will fail
-# and we won't run any native parser tests.
-try:
-    from mypy.nativeparse import (
-        State,
-        deserialize_imports,
-        native_parse,
-        parse_to_binary_ast,
-        read_statements,
-    )
-
-    has_nativeparse = True
-except ImportError:
-    has_nativeparse = False
-
 
 class NativeParserSuite(DataSuite):
     required_out_section = True
     base_path = "."
-    files = (
-        ["native-parser.test", "native-parser-python311.test", "native-parser-python312.test"]
-        if has_nativeparse
-        else []
-    )
+    files = ["native-parser.test", "native-parser-python311.test", "native-parser-python312.test"]
 
     def run_case(self, testcase: DataDrivenTestCase) -> None:
         test_parser(testcase)
@@ -65,7 +50,7 @@ def run_case(self, testcase: DataDrivenTestCase) -> None:
 class NativeParserImportsSuite(DataSuite):
     required_out_section = True
     base_path = "."
-    files = ["native-parser-imports.test"] if has_nativeparse else []
+    files = ["native-parser-imports.test"]
 
     def run_case(self, testcase: DataDrivenTestCase) -> None:
         test_parser_imports(testcase)
@@ -238,7 +223,6 @@ def format_reachable_imports(node: MypyFile) -> list[str]:
     return output
 
 
-@unittest.skipUnless(has_nativeparse, "nativeparse not available")
 class TestNativeParserBinaryFormat(unittest.TestCase):
     def _assert_trivial_binary_data(self, b: bytes, /) -> None:
         # A quick sanity check to ensure the serialized data looks as expected. Only covers
@@ -296,14 +280,27 @@ def test_trivial_binary_data_from_bytes_source(self) -> None:
         self._assert_trivial_binary_data(b)
 
     def test_invalid_bytes_raises(self) -> None:
-        with self.assertRaises(UnicodeDecodeError):
+        with self.assertRaises(CompileError):
             parse_to_binary_ast("", Options(), b"\xff")
 
 
+class TestNativeParserCustomEncoding(unittest.TestCase):
+    def test_latin1(self) -> None:
+        source = "# coding: latin1\nJérôme = False"
+        with temp_source(source, encoding="latin1") as fnam:
+            parse_to_binary_ast(fnam, Options())
+
+    def test_latin1_broken(self) -> None:
+        source = "# coding: ascii\nJérôme = False"
+        with temp_source(source, encoding="latin1") as fnam:
+            with pytest.raises(UnicodeDecodeError):
+                parse_to_binary_ast(fnam, Options())
+
+
 @contextlib.contextmanager
-def temp_source(text: str) -> Iterator[str]:
+def temp_source(text: str, encoding: str = "utf-8") -> Iterator[str]:
     with tempfile.TemporaryDirectory() as temp_dir:
         temp_path = os.path.join(temp_dir, "t.py")
-        with open(temp_path, "w") as f:
-            f.write(text)
+        with open(temp_path, "wb") as f:
+            f.write(text.encode(encoding))
         yield temp_path
diff --git a/test-data/unit/check-incremental.test b/test-data/unit/check-incremental.test
index cb66c05fb5c8..71ec6e973685 100644
--- a/test-data/unit/check-incremental.test
+++ b/test-data/unit/check-incremental.test
@@ -2334,7 +2334,7 @@ tmp/c.py:1: error: Module "d" has no attribute "x"
 [delete nonexistent.py.2]
 [out]
 [out2]
-mypy: error: Cannot read file 'tmp/nonexistent.py': No such file or directory
+tmp/nonexistent.py: error: Cannot read file: No such file or directory
 
 [case testSerializeAbstractPropertyIncremental]
 from abc import abstractmethod
@@ -8275,3 +8275,21 @@ value: str = "x"
 tmp/a.py:9: note: Revealed type is "builtins.list[builtins.int]"
 [out2]
 tmp/a.py:9: note: Revealed type is "builtins.list[builtins.int]"
+
+[case testIncrementalWorksCorrectlyWithNonUtf8]
+import a
+[file a.py]
+import b_latin1
+[file a.py.2]
+import b_latin1
+# touch
+[file b_latin1.py]
+# coding: latin-1
+Jérôme = False
+[file b_latin1.py.2]
+# coding: latin-1
+Jérôme = False
+[rechecked a]
+[stale]
+[out]
+[out2]
diff --git a/test-data/unit/cmdline.test b/test-data/unit/cmdline.test
index 9928f64acd11..45e7da184512 100644
--- a/test-data/unit/cmdline.test
+++ b/test-data/unit/cmdline.test
@@ -422,7 +422,7 @@ int_pow.py:11: note: Revealed type is "Any"
 [case testMissingFile]
 # cmd: mypy nope.py
 [out]
-mypy: error: Cannot read file 'nope.py': No such file or directory
+nope.py: error: Cannot read file: No such file or directory
 == Return code: 2
 
 [case testModulesAndPackages]
@@ -673,7 +673,7 @@ c.py:1: error: Name "fail" is not defined
 \[mypy]
 files = config.py
 [out]
-mypy: error: Cannot read file 'override.py': No such file or directory
+override.py: error: Cannot read file: No such file or directory
 == Return code: 2
 
 [case testErrorSummaryOnSuccess]
@@ -730,7 +730,7 @@ Found 2 errors in 2 files (checked 2 source files)
 [case testErrorSummaryOnBadUsage]
 # cmd: mypy --error-summary missing.py
 [out]
-mypy: error: Cannot read file 'missing.py': No such file or directory
+missing.py: error: Cannot read file: No such file or directory
 Found 1 error in 1 file (errors prevented further checking)
 == Return code: 2
 
diff --git a/test-data/unit/fine-grained.test b/test-data/unit/fine-grained.test
index 6fd975076cc8..bbf23a947dc8 100644
--- a/test-data/unit/fine-grained.test
+++ b/test-data/unit/fine-grained.test
@@ -6145,9 +6145,9 @@ a.py:1: error: "int" not callable
 [file a.py.2]
 1()
 [out]
-mypy: error: Cannot read file 'tmp/nonexistent.py': No such file or directory
+nonexistent.py: error: Cannot read file: No such file or directory
 ==
-mypy: error: Cannot read file 'tmp/nonexistent.py': No such file or directory
+nonexistent.py: error: Cannot read file: No such file or directory
 
 [case testNonExistentFileOnCommandLine2]
 # cmd: mypy a.py