diff --git a/modules/@angular/router/src/url_tree.ts b/modules/@angular/router/src/url_tree.ts
index 34571b1f81..118b98a731 100644
--- a/modules/@angular/router/src/url_tree.ts
+++ b/modules/@angular/router/src/url_tree.ts
@@ -183,7 +183,7 @@ export class DefaultUrlSerializer implements UrlSerializer {
   serialize(tree: UrlTree): string {
     const segment = `/${serializeSegment(tree.root, true)}`;
     const query = serializeQueryParams(tree.queryParams);
-    const fragment = tree.fragment !== null ? `#${tree.fragment}` : '';
+    const fragment = tree.fragment !== null ? `#${encodeURIComponent(tree.fragment)}` : '';
     return `${segment}${query}${fragment}`;
   }
 }
@@ -223,15 +223,18 @@ function serializeSegment(segment: UrlSegment, root: boolean): string {
 }
 
 export function serializePath(path: UrlPathWithParams): string {
-  return `${path.path}${serializeParams(path.parameters)}`;
+  return `${encodeURIComponent(path.path)}${serializeParams(path.parameters)}`;
 }
 
 function serializeParams(params: {[key: string]: string}): string {
-  return pairs(params).map(p => `;${p.first}=${p.second}`).join('');
+  return pairs(params)
+      .map(p => `;${encodeURIComponent(p.first)}=${encodeURIComponent(p.second)}`)
+      .join('');
 }
 
 function serializeQueryParams(params: {[key: string]: string}): string {
-  const strs = pairs(params).map(p => `${p.first}=${p.second}`);
+  const strs =
+      pairs(params).map(p => `${encodeURIComponent(p.first)}=${encodeURIComponent(p.second)}`);
   return strs.length > 0 ? `?${strs.join("&")}` : '';
 }
 
@@ -335,7 +338,7 @@ class UrlParser {
     if (this.peekStartsWith(';')) {
       matrixParams = this.parseMatrixParams();
     }
-    return new UrlPathWithParams(path, matrixParams);
+    return new UrlPathWithParams(decodeURIComponent(path), matrixParams);
   }
 
   parseQueryParams(): {[key: string]: any} {
@@ -353,7 +356,7 @@ class UrlParser {
 
   parseFragment(): string {
     if (this.peekStartsWith('#')) {
-      return this.remaining.substring(1);
+      return decodeURIComponent(this.remaining.substring(1));
     } else {
       return null;
     }
@@ -384,7 +387,7 @@ class UrlParser {
       }
     }
 
-    params[key] = value;
+    params[decodeURIComponent(key)] = decodeURIComponent(value);
   }
 
   parseQueryParam(params: {[key: string]: any}): void {
@@ -402,7 +405,7 @@ class UrlParser {
         this.capture(value);
       }
     }
-    params[key] = value;
+    params[decodeURIComponent(key)] = decodeURIComponent(value);
   }
 
   parseParens(allowPrimary: boolean): {[key: string]: UrlSegment} {
diff --git a/modules/@angular/router/test/url_serializer.spec.ts b/modules/@angular/router/test/url_serializer.spec.ts
index db56102acb..25e5b073ee 100644
--- a/modules/@angular/router/test/url_serializer.spec.ts
+++ b/modules/@angular/router/test/url_serializer.spec.ts
@@ -134,6 +134,36 @@ describe('url serializer', () => {
     expect(tree.fragment).toEqual('');
     expect(url.serialize(tree)).toEqual('/one#');
   });
+
+  describe('encoding/decoding', () => {
+    it('should encode/decode path segments and parameters', () => {
+      const u =
+          `/${encodeURIComponent("one two")};${encodeURIComponent("p 1")}=${encodeURIComponent("v 1")};${encodeURIComponent("p 2")}=${encodeURIComponent("v 2")}`;
+      const tree = url.parse(u);
+
+      expect(tree.root.children[PRIMARY_OUTLET].pathsWithParams[0].path).toEqual('one two');
+      expect(tree.root.children[PRIMARY_OUTLET].pathsWithParams[0].parameters)
+          .toEqual({['p 1']: 'v 1', ['p 2']: 'v 2'});
+      expect(url.serialize(tree)).toEqual(u);
+    });
+
+    it('should encode/decode query params', () => {
+      const u =
+          `/one?${encodeURIComponent("p 1")}=${encodeURIComponent("v 1")}&${encodeURIComponent("p 2")}=${encodeURIComponent("v 2")}`;
+      const tree = url.parse(u);
+
+      expect(tree.queryParams).toEqual({['p 1']: 'v 1', ['p 2']: 'v 2'});
+      expect(url.serialize(tree)).toEqual(u);
+    });
+
+    it('should encode/decode fragment', () => {
+      const u = `/one#${encodeURIComponent("one two")}`;
+      const tree = url.parse(u);
+
+      expect(tree.fragment).toEqual('one two');
+      expect(url.serialize(tree)).toEqual(u);
+    });
+  });
 });
 
 function expectSegment(segment: UrlSegment, expected: string, hasChildren: boolean = false): void {