diff --git a/codegen/src/main/java/org/web3j/codegen/unit/gen/CompilerClassLoader.java b/codegen/src/main/java/org/web3j/codegen/unit/gen/CompilerClassLoader.java
index ff70510c1..084957cd0 100644
--- a/codegen/src/main/java/org/web3j/codegen/unit/gen/CompilerClassLoader.java
+++ b/codegen/src/main/java/org/web3j/codegen/unit/gen/CompilerClassLoader.java
@@ -15,6 +15,7 @@
 import java.io.File;
 import java.io.IOException;
 import java.net.URL;
+import java.net.URLDecoder;
 import java.nio.file.Files;
 import java.nio.file.Paths;
 import java.util.Arrays;
@@ -59,7 +60,12 @@ private Optional<File> compileClass(final String name) {
 
         File sourceFile = null;
         for (final URL url : urls) {
-            final File file = new File(url.getFile(), path + ".java");
+            File file;
+            try {
+                file = new File(URLDecoder.decode(url.getPath(), "UTF-8"), path + ".java");
+            } catch (Exception e) {
+                file = new File(url.getFile(), path + ".java");
+            }
 
             if (file.exists()) {
                 sourceFile = file;
diff --git a/codegen/src/test/java/org/web3j/codegen/unit/gen/CompilerClassLoaderTest.java b/codegen/src/test/java/org/web3j/codegen/unit/gen/CompilerClassLoaderTest.java
new file mode 100644
index 000000000..7b05c9be1
--- /dev/null
+++ b/codegen/src/test/java/org/web3j/codegen/unit/gen/CompilerClassLoaderTest.java
@@ -0,0 +1,79 @@
+/*
+ * Copyright 2020 Web3 Labs Ltd.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License"); you may not use this file except in compliance with
+ * the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software distributed under the License is distributed on
+ * an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations under the License.
+ */
+package org.web3j.codegen.unit.gen;
+
+import java.io.File;
+import java.io.IOException;
+import java.net.URL;
+import java.nio.file.Files;
+import java.nio.file.Paths;
+import java.util.Objects;
+
+import org.junit.jupiter.api.Assertions;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.api.io.TempDir;
+
+import org.web3j.codegen.unit.gen.java.Setup;
+
+public class CompilerClassLoaderTest {
+
+    String javaSourcePath = "org/com/test/contract/";
+    String greeterSourceName = "Greeter";
+    URL javaSourcesUrl = Objects.requireNonNull(Setup.class.getClassLoader().getResource("java"));
+    @TempDir static File temp;
+
+    @Test
+    public void compileClassTest() throws ClassNotFoundException {
+        CompilerClassLoader compilerClassLoader = new CompilerClassLoader(temp, javaSourcesUrl);
+        Assertions.assertNotEquals(
+                null,
+                compilerClassLoader.loadClass(
+                        (javaSourcePath + greeterSourceName).replace(File.separator, ".")));
+    }
+
+    @Test
+    public void compileClassWithPathContainingSpacesTest()
+            throws ClassNotFoundException, IOException {
+        File tempWithSpaces = new File(temp, "With Spaces");
+        File greeterSource =
+                new File(
+                        Paths.get(
+                                        javaSourcesUrl.getPath(),
+                                        javaSourcePath,
+                                        greeterSourceName + ".java")
+                                .toString());
+        Assertions.assertTrue(greeterSource.exists());
+
+        String javaPathWithSpaces = tempWithSpaces.toString() + File.separator + "java";
+        File sourcePathWithSpaces = new File(javaPathWithSpaces + File.separator + javaSourcePath);
+        Assertions.assertTrue(sourcePathWithSpaces.mkdirs());
+
+        Files.copy(
+                greeterSource.toPath(),
+                Paths.get(
+                        sourcePathWithSpaces.toPath()
+                                + File.separator
+                                + greeterSourceName
+                                + ".java"));
+        File greeterSourceWithSpaces = new File(sourcePathWithSpaces, greeterSourceName + ".java");
+        Assertions.assertTrue(greeterSourceWithSpaces.exists());
+
+        CompilerClassLoader compilerClassLoader =
+                new CompilerClassLoader(
+                        tempWithSpaces, new File(javaPathWithSpaces).toURI().toURL());
+        Assertions.assertNotEquals(
+                null,
+                compilerClassLoader.loadClass(
+                        (javaSourcePath + greeterSourceName).replace(File.separator, ".")));
+    }
+}