diff --git a/src/test/java/com/google/devtools/build/lib/analysis/BUILD b/src/test/java/com/google/devtools/build/lib/analysis/BUILD
index 23e94f45f74a2c..399e20ada5beed 100644
--- a/src/test/java/com/google/devtools/build/lib/analysis/BUILD
+++ b/src/test/java/com/google/devtools/build/lib/analysis/BUILD
@@ -154,6 +154,7 @@ java_library(
         "//src/main/java/com/google/devtools/build/lib/util:detailed_exit_code",
         "//src/main/java/com/google/devtools/build/lib/util:filetype",
         "//src/main/java/com/google/devtools/build/lib/util:os",
+        "//src/main/java/com/google/devtools/build/lib/util:string_encoding",
         "//src/main/java/com/google/devtools/build/lib/util/io",
         "//src/main/java/com/google/devtools/build/lib/vfs",
         "//src/main/java/com/google/devtools/build/lib/vfs:pathfragment",
diff --git a/src/test/java/com/google/devtools/build/lib/analysis/actions/TemplateExpansionActionTest.java b/src/test/java/com/google/devtools/build/lib/analysis/actions/TemplateExpansionActionTest.java
index 15f208d16b6e82..1ebd5b08e4449f 100644
--- a/src/test/java/com/google/devtools/build/lib/analysis/actions/TemplateExpansionActionTest.java
+++ b/src/test/java/com/google/devtools/build/lib/analysis/actions/TemplateExpansionActionTest.java
@@ -39,6 +39,7 @@
 import com.google.devtools.build.lib.exec.util.TestExecutorBuilder;
 import com.google.devtools.build.lib.testutil.FoundationTestCase;
 import com.google.devtools.build.lib.util.Fingerprint;
+import com.google.devtools.build.lib.util.StringEncoding;
 import com.google.devtools.build.lib.util.io.FileOutErr;
 import com.google.devtools.build.lib.vfs.FileSystemUtils;
 import com.google.devtools.build.lib.vfs.Path;
@@ -252,7 +253,10 @@ public void testWithSpecialCharacters() throws Exception {
     // scratch.overwriteFile appends a newline, so we need an additional \n here
     String expected = String.format("%s%s\n", SPECIAL_CHARS, SPECIAL_CHARS);
 
-    executeTemplateExpansion(expected, ImmutableList.of(Substitution.of("%key%", SPECIAL_CHARS)));
+    executeTemplateExpansion(
+        expected,
+        ImmutableList.of(
+            Substitution.of("%key%", StringEncoding.unicodeToInternal(SPECIAL_CHARS))));
   }
 
   private String computeKey(TemplateExpansionAction action) throws EvalException {
diff --git a/src/test/java/com/google/devtools/build/lib/starlark/StarlarkRuleImplementationFunctionsTest.java b/src/test/java/com/google/devtools/build/lib/starlark/StarlarkRuleImplementationFunctionsTest.java
index 32905c49100876..753b62f955cd44 100644
--- a/src/test/java/com/google/devtools/build/lib/starlark/StarlarkRuleImplementationFunctionsTest.java
+++ b/src/test/java/com/google/devtools/build/lib/starlark/StarlarkRuleImplementationFunctionsTest.java
@@ -19,6 +19,7 @@
 import static com.google.common.truth.Truth.assertWithMessage;
 import static com.google.devtools.build.lib.bazel.bzlmod.BzlmodTestUtil.createModuleKey;
 import static com.google.devtools.build.lib.skyframe.BzlLoadValue.keyForBuild;
+import static java.nio.charset.StandardCharsets.ISO_8859_1;
 import static org.junit.Assert.assertThrows;
 import static org.junit.Assert.fail;
 
@@ -68,8 +69,6 @@
 import com.google.devtools.build.lib.testutil.TestConstants;
 import com.google.devtools.build.lib.util.Fingerprint;
 import com.google.devtools.build.lib.util.OsUtils;
-import java.nio.charset.Charset;
-import java.nio.charset.StandardCharsets;
 import java.util.Arrays;
 import java.util.Comparator;
 import java.util.HashMap;
@@ -916,33 +915,20 @@ public void testCreateTemplateAction() throws Exception {
     assertThat(action.makeExecutable()).isFalse();
   }
 
-  /**
-   * Simulates the fact that the Parser currently uses Latin1 to read BUILD files, while users
-   * usually write those files using UTF-8 encoding. Currently, the string-valued 'substitutions'
-   * parameter of the template_action function contains a hack that assumes its input is a UTF-8
-   * encoded string which has been ingested as Latin 1. The hack converts the string to its
-   * "correct" UTF-8 value. Once Blaze starts calling {@link
-   * net.starlark.java.syntax.ParserInput#fromUTF8} instead of {@code fromLatin1} and the hack for
-   * the substitutions parameter is removed, this test will fail.
-   */
   @Test
-  public void testCreateTemplateActionWithWrongEncoding() throws Exception {
+  public void testCreateTemplateActionUnicode() throws Exception {
     // The following array contains bytes that represent a string of length two when treated as
     // UTF-8 and a string of length four when treated as ISO-8859-1 (a.k.a. Latin 1).
-    byte[] bytesToDecode = {(byte) 0xC2, (byte) 0xA2, (byte) 0xC2, (byte) 0xA2};
-    Charset latin1 = StandardCharsets.ISO_8859_1;
-    Charset utf8 = StandardCharsets.UTF_8;
+    String internalString =
+        new String(new byte[] {(byte) 0xC2, (byte) 0xA2, (byte) 0xC2, (byte) 0xA2}, ISO_8859_1);
     StarlarkRuleContext ruleContext = createRuleContext("//foo:foo");
     setRuleContext(ruleContext);
+    // In production, Bazel parses Starlark as raw bytes encoded as Latin-1.
     ev.exec(
         "ruleContext.actions.expand_template(",
         "  template = ruleContext.files.srcs[0],",
         "  output = ruleContext.files.srcs[1],",
-        "  substitutions = {'a"
-            + new String(bytesToDecode, latin1)
-            + "': '"
-            + new String(bytesToDecode, latin1)
-            + "'},",
+        "  substitutions = {'a" + internalString + "': '" + internalString + "'},",
         "  is_executable = False)");
     TemplateExpansionAction action =
         (TemplateExpansionAction)
@@ -950,8 +936,8 @@ public void testCreateTemplateActionWithWrongEncoding() throws Exception {
                 ruleContext.getRuleContext().getAnalysisEnvironment().getRegisteredActions());
     List<Substitution> substitutions = action.getSubstitutions();
     assertThat(substitutions).hasSize(1);
-    assertThat(substitutions.get(0).getKey()).isEqualTo("a" + new String(bytesToDecode, utf8));
-    assertThat(substitutions.get(0).getValue()).isEqualTo(new String(bytesToDecode, utf8));
+    assertThat(substitutions.get(0).getKey()).isEqualTo("a" + internalString);
+    assertThat(substitutions.get(0).getValue()).isEqualTo(internalString);
   }
 
   @Test