diff --git a/src/oid.c b/src/oid.c
index 4b3080430..61bf6da8a 100644
--- a/src/oid.c
+++ b/src/oid.c
@@ -11,24 +11,6 @@
 #include <string.h>
 #include <limits.h>
 
-static signed char from_hex[] = {
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 00 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 10 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 20 */
- 0, 1, 2, 3, 4, 5, 6, 7, 8, 9, -1, -1, -1, -1, -1, -1, /* 30 */
--1, 10, 11, 12, 13, 14, 15, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 40 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 50 */
--1, 10, 11, 12, 13, 14, 15, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 60 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 70 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 80 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 90 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* a0 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* b0 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* c0 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* d0 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* e0 */
--1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* f0 */
-};
 static char to_hex[] = "0123456789abcdef";
 
 int git_oid_fromstrn(git_oid *out, const char *str, size_t length)
@@ -43,8 +25,8 @@ int git_oid_fromstrn(git_oid *out, const char *str, size_t length)
 		length = GIT_OID_HEXSZ;
 
 	for (p = 0; p < length - 1; p += 2) {
-		v = (from_hex[(unsigned char)str[p + 0]] << 4)
-				| from_hex[(unsigned char)str[p + 1]];
+		v = (git__fromhex(str[p + 0]) << 4)
+				| git__fromhex(str[p + 1]);
 
 		if (v < 0)
 			return git__throw(GIT_ENOTOID, "Failed to generate sha1. Given string is not a valid sha1 hash");
@@ -53,7 +35,7 @@ int git_oid_fromstrn(git_oid *out, const char *str, size_t length)
 	}
 
 	if (length % 2) {
-		v = (from_hex[(unsigned char)str[p + 0]] << 4);
+		v = (git__fromhex(str[p + 0]) << 4);
 		if (v < 0)
 			return git__throw(GIT_ENOTOID, "Failed to generate sha1. Given string is not a valid sha1 hash");
 
@@ -346,7 +328,7 @@ int git_oid_shorten_add(git_oid_shorten *os, const char *text_oid)
 	is_leaf = 0;
 
 	for (i = 0; i < GIT_OID_HEXSZ; ++i) {
-		int c = from_hex[(int)text_oid[i]];
+		int c = git__fromhex(text_oid[i]);
 		trie_node *node;
 
 		if (c == -1)
@@ -360,7 +342,7 @@ int git_oid_shorten_add(git_oid_shorten *os, const char *text_oid)
 			tail = node->tail;
 			node->tail = NULL;
 
-			node = push_leaf(os, idx, from_hex[(int)tail[0]], &tail[1]);
+			node = push_leaf(os, idx, git__fromhex(tail[0]), &tail[1]);
 			if (node == NULL)
 				return GIT_ENOMEM;
 		}
diff --git a/src/path.c b/src/path.c
index e4b49f35d..8c1bd41eb 100644
--- a/src/path.c
+++ b/src/path.c
@@ -237,3 +237,77 @@ void git_path_string_to_dir(char* path, size_t size)
 	}
 }
 
+int git__percent_decode(git_buf *decoded_out, const char *input)
+{
+	int len, hi, lo, i, error = GIT_SUCCESS;
+	assert(decoded_out && input);
+
+	len = strlen(input);
+	git_buf_clear(decoded_out);
+
+	for(i = 0; i < len; i++)
+	{
+		char c = input[i];
+
+		if (c != '%')
+			goto append;
+
+		if (i >= len - 2)
+			goto append;
+
+		hi = git__fromhex(input[i + 1]);
+		lo = git__fromhex(input[i + 2]);
+
+		if (hi < 0 || lo < 0)
+			goto append;
+
+		c = (char)(hi << 4 | lo);
+		i += 2;
+
+append:
+		error = git_buf_putc(decoded_out, c);
+		if (error < GIT_SUCCESS)
+			return git__rethrow(error, "Failed to percent decode '%s'.", input);
+	}
+
+	return error;
+}
+
+int git_path_fromurl(git_buf *local_path_out, const char *file_url)
+{
+	int error = GIT_SUCCESS, offset = 0, len;
+
+	assert(local_path_out && file_url);
+
+	if (git__prefixcmp(file_url, "file://") != 0)
+		return git__throw(GIT_EINVALIDPATH,
+			"Parsing of '%s' failed. A file Uri is expected (ie. with 'file://' scheme).",
+			file_url);
+
+	offset += 7;
+	len = strlen(file_url);
+
+	if (offset < len && file_url[offset] == '/')
+		offset++;
+	else if (offset < len && git__prefixcmp(file_url + offset, "localhost/") == 0)
+		offset += 10;
+	else
+		return git__throw(GIT_EINVALIDPATH,
+			"Parsing of '%s' failed. A local file Uri is expected.", file_url);
+
+	if (offset >= len || file_url[offset] == '/')
+		return git__throw(GIT_EINVALIDPATH, 
+			"Parsing of '%s' failed. Invalid file Uri format.", file_url);
+
+#ifndef _MSC_VER
+	offset--;	/* A *nix absolute path starts with a forward slash */
+#endif
+
+	git_buf_clear(local_path_out);
+
+	error = git__percent_decode(local_path_out, file_url + offset);
+	if (error < GIT_SUCCESS)
+		return git__rethrow(error, "Parsing of '%s' failed.", file_url);
+
+	return error;
+}
diff --git a/src/path.h b/src/path.h
index 0c8cc349c..c308c5bd4 100644
--- a/src/path.h
+++ b/src/path.h
@@ -74,4 +74,7 @@ GIT_INLINE(void) git_path_mkposix(char *path)
 #	define git_path_mkposix(p) /* blank */
 #endif
 
+extern int git__percent_decode(git_buf *decoded_out, const char *input);
+extern int git_path_fromurl(git_buf *local_path_out, const char *file_url);
+
 #endif
diff --git a/src/transports/local.c b/src/transports/local.c
index 2937da06d..a2135e73e 100644
--- a/src/transports/local.c
+++ b/src/transports/local.c
@@ -13,6 +13,8 @@
 #include "refs.h"
 #include "transport.h"
 #include "posix.h"
+#include "path.h"
+#include "buffer.h"
 
 typedef struct {
 	git_transport parent;
@@ -148,7 +150,6 @@ static int local_ls(git_transport *transport, git_headlist_cb list_cb, void *pay
 	return GIT_SUCCESS;
 }
 
-
 /*
  * Try to open the url as a git directory. The direction doesn't
  * matter in this case because we're calulating the heads ourselves.
@@ -159,24 +160,26 @@ static int local_connect(git_transport *transport, int GIT_UNUSED(direction))
 	int error;
 	transport_local *t = (transport_local *) transport;
 	const char *path;
+	git_buf buf = GIT_BUF_INIT;
+
 	GIT_UNUSED_ARG(direction);
 
 	/* The repo layer doesn't want the prefix */
 	if (!git__prefixcmp(transport->url, "file://")) {
-		path = transport->url + strlen("file://");
+		error = git_path_fromurl(&buf, transport->url);
+		if (error < GIT_SUCCESS) {
+			git_buf_free(&buf);
+			return git__rethrow(error, "Failed to parse remote path");
+		}
+		path = git_buf_cstr(&buf);
 
-#ifdef _MSC_VER
-		/* skip the leading slash on windows before the drive letter */
-		if (*path != '/')
-			return git__throw(GIT_EINVALIDPATH, "Invalid local uri '%s'.", transport->url);
-
-		path++;
-#endif
-
-	} else
+	} else /* We assume transport->url is already a path */
 		path = transport->url;
 
 	error = git_repository_open(&repo, path);
+
+	git_buf_free(&buf);
+
 	if (error < GIT_SUCCESS)
 		return git__rethrow(error, "Failed to open remote");
 
diff --git a/src/util.h b/src/util.h
index 2367bb5f3..2654e2de2 100644
--- a/src/util.h
+++ b/src/util.h
@@ -138,5 +138,28 @@ typedef void (*git_refcount_freeptr)(void *r);
 
 #define GIT_REFCOUNT_OWNER(r) (((git_refcount *)(r))->owner)
 
+static signed char from_hex[] = {
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 00 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 10 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 20 */
+ 0, 1, 2, 3, 4, 5, 6, 7, 8, 9, -1, -1, -1, -1, -1, -1, /* 30 */
+-1, 10, 11, 12, 13, 14, 15, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 40 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 50 */
+-1, 10, 11, 12, 13, 14, 15, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 60 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 70 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 80 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* 90 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* a0 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* b0 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* c0 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* d0 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* e0 */
+-1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, -1, /* f0 */
+};
+
+GIT_INLINE(int) git__fromhex(char h)
+{
+	return from_hex[(unsigned char) h];
+}
 
 #endif /* INCLUDE_util_h__ */
diff --git a/tests-clay/core/hex.c b/tests-clay/core/hex.c
new file mode 100644
index 000000000..391a286be
--- /dev/null
+++ b/tests-clay/core/hex.c
@@ -0,0 +1,22 @@
+#include "clay_libgit2.h"
+#include "util.h"
+
+void test_core_hex__fromhex(void)
+{
+	/* Passing cases */
+	cl_assert(git__fromhex('0') == 0x0);
+	cl_assert(git__fromhex('1') == 0x1);
+	cl_assert(git__fromhex('3') == 0x3);
+	cl_assert(git__fromhex('9') == 0x9);
+	cl_assert(git__fromhex('A') == 0xa);
+	cl_assert(git__fromhex('C') == 0xc);
+	cl_assert(git__fromhex('F') == 0xf);
+	cl_assert(git__fromhex('a') == 0xa);
+	cl_assert(git__fromhex('c') == 0xc);
+	cl_assert(git__fromhex('f') == 0xf);
+
+	/* Failing cases */
+	cl_assert(git__fromhex('g') == -1);
+	cl_assert(git__fromhex('z') == -1);
+	cl_assert(git__fromhex('X') == -1);
+}
diff --git a/tests-clay/core/path.c b/tests-clay/core/path.c
index 49f85f085..bdebfb9c5 100644
--- a/tests-clay/core/path.c
+++ b/tests-clay/core/path.c
@@ -70,7 +70,7 @@ check_joinpath_n(
 
 
 /* get the dirname of a path */
-void test_core_path__0_dirname(void)
+void test_core_path__00_dirname(void)
 {
 	check_dirname(NULL, ".");
 	check_dirname("", ".");
@@ -90,7 +90,7 @@ void test_core_path__0_dirname(void)
 }
 
 /* get the base name of a path */
-void test_core_path__1_basename(void)
+void test_core_path__01_basename(void)
 {
 	check_basename(NULL, ".");
 	check_basename("", ".");
@@ -107,7 +107,7 @@ void test_core_path__1_basename(void)
 }
 
 /* get the latest component in a path */
-void test_core_path__2_topdir(void)
+void test_core_path__02_topdir(void)
 {
 	check_topdir(".git/", ".git/");
 	check_topdir("/.git/", ".git/");
@@ -124,7 +124,7 @@ void test_core_path__2_topdir(void)
 }
 
 /* properly join path components */
-void test_core_path__5_joins(void)
+void test_core_path__05_joins(void)
 {
 	check_joinpath("", "", "");
 	check_joinpath("", "a", "a");
@@ -159,7 +159,7 @@ void test_core_path__5_joins(void)
 }
 
 /* properly join path components for more than one path */
-void test_core_path__6_long_joins(void)
+void test_core_path__06_long_joins(void)
 {
 	check_joinpath_n("", "", "", "", "");
 	check_joinpath_n("", "a", "", "", "a/");
@@ -212,7 +212,7 @@ check_string_to_dir(
 }
 
 /* convert paths to dirs */
-void test_core_path__7_path_to_dir(void)
+void test_core_path__07_path_to_dir(void)
 {
 	check_path_to_dir("", "");
 	check_path_to_dir(".", "./");
@@ -240,7 +240,7 @@ void test_core_path__7_path_to_dir(void)
 }
 
 /* join path to itself */
-void test_core_path__8_self_join(void)
+void test_core_path__08_self_join(void)
 {
 	git_buf path = GIT_BUF_INIT;
 	ssize_t asize = 0;
@@ -273,3 +273,66 @@ void test_core_path__8_self_join(void)
 	
 	git_buf_free(&path);
 }
+
+static void check_percent_decoding(const char *expected_result, const char *input)
+{
+	git_buf buf = GIT_BUF_INIT;
+
+	cl_git_pass(git__percent_decode(&buf, input));
+	cl_assert_strequal(expected_result, git_buf_cstr(&buf));
+
+	git_buf_free(&buf);
+}
+
+void test_core_path__09_percent_decode(void)
+{
+	check_percent_decoding("abcd", "abcd");
+	check_percent_decoding("a2%", "a2%");
+	check_percent_decoding("a2%3", "a2%3");
+	check_percent_decoding("a2%%3", "a2%%3");
+	check_percent_decoding("a2%3z", "a2%3z");
+	check_percent_decoding("a,", "a%2c");
+	check_percent_decoding("a21", "a2%31");
+	check_percent_decoding("a2%1", "a2%%31");
+	check_percent_decoding("a bc ", "a%20bc%20");
+	check_percent_decoding("Vicent Mart" "\355", "Vicent%20Mart%ED");
+}
+
+static void check_fromurl(const char *expected_result, const char *input, int should_fail)
+{
+	git_buf buf = GIT_BUF_INIT;
+
+	assert(should_fail || expected_result);
+
+	if (!should_fail) {
+		cl_git_pass(git_path_fromurl(&buf, input));
+		cl_assert_strequal(expected_result, git_buf_cstr(&buf));
+	} else
+		cl_git_fail(git_path_fromurl(&buf, input));
+
+	git_buf_free(&buf);
+}
+
+#ifdef _MSC_VER
+#define ABS_PATH_MARKER ""
+#else
+#define ABS_PATH_MARKER "/"
+#endif
+
+void test_core_path__10_fromurl(void)
+{
+	/* Failing cases */
+	check_fromurl(NULL, "a", 1);
+	check_fromurl(NULL, "http:///c:/Temp%20folder/note.txt", 1);
+	check_fromurl(NULL, "file://c:/Temp%20folder/note.txt", 1);
+	check_fromurl(NULL, "file:////c:/Temp%20folder/note.txt", 1);
+	check_fromurl(NULL, "file:///", 1);
+	check_fromurl(NULL, "file:////", 1);
+	check_fromurl(NULL, "file://servername/c:/Temp%20folder/note.txt", 1);
+
+	/* Passing cases */
+	check_fromurl(ABS_PATH_MARKER "c:/Temp folder/note.txt", "file:///c:/Temp%20folder/note.txt", 0);
+	check_fromurl(ABS_PATH_MARKER "c:/Temp folder/note.txt", "file://localhost/c:/Temp%20folder/note.txt", 0);
+	check_fromurl(ABS_PATH_MARKER "c:/Temp+folder/note.txt", "file:///c:/Temp+folder/note.txt", 0);
+	check_fromurl(ABS_PATH_MARKER "a", "file:///a", 0);
+}
diff --git a/tests-clay/network/remotelocal.c b/tests-clay/network/remotelocal.c
index b9003e7ca..961c623a1 100644
--- a/tests-clay/network/remotelocal.c
+++ b/tests-clay/network/remotelocal.c
@@ -2,6 +2,7 @@
 #include "transport.h"
 #include "buffer.h"
 #include "path.h"
+#include "posix.h"
 
 static git_repository *repo;
 static git_buf file_path_buf = GIT_BUF_INIT;
@@ -9,9 +10,11 @@ static git_remote *remote;
 
 static void build_local_file_url(git_buf *out, const char *fixture)
 {
+	const char *in_buf;
+
 	git_buf path_buf = GIT_BUF_INIT;
 
-	cl_git_pass(git_path_prettify_dir(&path_buf, cl_fixture(fixture), NULL));
+	cl_git_pass(git_path_prettify_dir(&path_buf, fixture, NULL));
 	cl_git_pass(git_buf_puts(out, "file://"));
 
 #ifdef _MSC_VER
@@ -27,21 +30,27 @@ static void build_local_file_url(git_buf *out, const char *fixture)
 	cl_git_pass(git_buf_putc(out, '/'));
 #endif
 
-	cl_git_pass(git_buf_puts(out, git_buf_cstr(&path_buf)));
+	in_buf = git_buf_cstr(&path_buf);
+
+	/*
+	 * A very hacky Url encoding that only takes care of escaping the spaces
+	 */
+	while (*in_buf) {
+		if (*in_buf == ' ')
+			cl_git_pass(git_buf_puts(out, "%20"));
+		else
+			cl_git_pass(git_buf_putc(out, *in_buf));
+
+		in_buf++;
+	}
 
 	git_buf_free(&path_buf);
 }
 
 void test_network_remotelocal__initialize(void)
 {
-	cl_fixture("remotelocal");
 	cl_git_pass(git_repository_init(&repo, "remotelocal/", 0));
 	cl_assert(repo != NULL);
-
-	build_local_file_url(&file_path_buf, "testrepo.git");
-
-	cl_git_pass(git_remote_new(&remote, repo, git_buf_cstr(&file_path_buf), NULL));
-	cl_git_pass(git_remote_connect(remote, GIT_DIR_FETCH));
 }
 
 void test_network_remotelocal__cleanup(void)
@@ -62,11 +71,38 @@ static int count_ref__cb(git_remote_head *head, void *payload)
 	return GIT_SUCCESS;
 }
 
+static void connect_to_local_repository(const char *local_repository)
+{
+	build_local_file_url(&file_path_buf, local_repository);
+
+	cl_git_pass(git_remote_new(&remote, repo, git_buf_cstr(&file_path_buf), NULL));
+	cl_git_pass(git_remote_connect(remote, GIT_DIR_FETCH));
+
+}
+
 void test_network_remotelocal__retrieve_advertised_references(void)
 {
 	int how_many_refs = 0;
 
+	connect_to_local_repository(cl_fixture("testrepo.git"));
+
 	cl_git_pass(git_remote_ls(remote, &count_ref__cb, &how_many_refs));
 
 	cl_assert(how_many_refs == 12); /* 1 HEAD + 9 refs + 2 peeled tags */
 }
+
+void test_network_remotelocal__retrieve_advertised_references_from_spaced_repository(void)
+{
+	int how_many_refs = 0;
+
+	cl_fixture_sandbox("testrepo.git");
+	cl_git_pass(p_rename("testrepo.git", "spaced testrepo.git"));
+
+	connect_to_local_repository("spaced testrepo.git");
+
+	cl_git_pass(git_remote_ls(remote, &count_ref__cb, &how_many_refs));
+
+	cl_assert(how_many_refs == 12); /* 1 HEAD */
+
+	cl_fixture_cleanup("spaced testrepo.git");
+}
diff --git a/tests-clay/object/raw/chars.c b/tests-clay/object/raw/chars.c
index eba352b40..83bcbeb79 100644
--- a/tests-clay/object/raw/chars.c
+++ b/tests-clay/object/raw/chars.c
@@ -3,17 +3,6 @@
 
 #include "odb.h"
 
-static int from_hex(unsigned int i)
-{
-	if (i >= '0' && i <= '9')
-		return i - '0';
-	if (i >= 'a' && i <= 'f')
-		return 10 + (i - 'a');
-	if (i >= 'A' && i <= 'F')
-		return 10 + (i - 'A');
-	return -1;
-}
-
 void test_object_raw_chars__find_invalid_chars_in_oid(void)
 {
 	git_oid out;
@@ -28,8 +17,8 @@ void test_object_raw_chars__find_invalid_chars_in_oid(void)
 
 	for (i = 0; i < 256; i++) {
 		in[38] = (char)i;
-		if (from_hex(i) >= 0) {
-			exp[19] = (unsigned char)(from_hex(i) << 4);
+		if (git__fromhex(i) >= 0) {
+			exp[19] = (unsigned char)(git__fromhex(i) << 4);
 			cl_git_pass(git_oid_fromstr(&out, in));
 			cl_assert(memcmp(out.id, exp, sizeof(out.id)) == 0);
 		} else {
diff --git a/tests/t01-rawobj.c b/tests/t01-rawobj.c
index 8b05f3394..7b9ca1ee1 100644
--- a/tests/t01-rawobj.c
+++ b/tests/t01-rawobj.c
@@ -52,17 +52,6 @@ BEGIN_TEST(oid2, "fail when parsing an invalid string as oid")
 	must_fail(git_oid_fromstr(&out, "moo"));
 END_TEST
 
-static int from_hex(unsigned int i)
-{
-	if (i >= '0' && i <= '9')
-		return i - '0';
-	if (i >= 'a' && i <= 'f')
-		return 10 + (i - 'a');
-	if (i >= 'A' && i <= 'F')
-		return 10 + (i - 'A');
-	return -1;
-}
-
 BEGIN_TEST(oid3, "find all invalid characters when parsing an oid")
 	git_oid out;
 	unsigned char exp[] = {
@@ -77,8 +66,8 @@ BEGIN_TEST(oid3, "find all invalid characters when parsing an oid")
 	for (i = 0; i < 256; i++) {
 		in[38] = (char)i;
 
-		if (from_hex(i) >= 0) {
-			exp[19] = (unsigned char)(from_hex(i) << 4);
+		if (git__fromhex(i) >= 0) {
+			exp[19] = (unsigned char)(git__fromhex(i) << 4);
 			must_pass(git_oid_fromstr(&out, in));
 			must_be_true(memcmp(out.id, exp, sizeof(out.id)) == 0);
 		} else {