diff --git a/extension.bundle.ts b/extension.bundle.ts
index 100f1485a..74f713d9e 100644
--- a/extension.bundle.ts
+++ b/extension.bundle.ts
@@ -76,6 +76,7 @@ export { mapJsonObjectValue } from "./src/util/mapJsonObjectValue";
 export { indentMultilineString, unindentMultilineString as removeIndentation } from "./src/util/multilineStrings";
 export * from "./src/util/nonNull";
 export { normalizePath } from "./src/util/normalizePath";
+export * from "./src/util/readUtf8FileWithBom";
 export * from './src/util/time';
 export { getVSCodePositionFromPosition } from "./src/util/vscodePosition";
 export { wrapError } from "./src/util/wrapError";
diff --git a/src/AzureRMTools.ts b/src/AzureRMTools.ts
index 26c35b9ab..33a8ab63b 100644
--- a/src/AzureRMTools.ts
+++ b/src/AzureRMTools.ts
@@ -47,6 +47,7 @@ import { JsonOutlineProvider } from "./Treeview";
 import { UnrecognizedBuiltinFunctionIssue } from "./UnrecognizedFunctionIssues";
 import { getRenameError } from "./util/getRenameError";
 import { normalizePath } from "./util/normalizePath";
+import { readUtf8FileWithBom } from "./util/readUtf8FileWithBom";
 import { Cancellation } from "./util/throwOnCancel";
 import { onCompletionActivated, toVsCodeCompletionItem } from "./util/toVsCodeCompletionItem";
 import { getVSCodeRangeFromSpan } from "./util/vscodePosition";
@@ -1199,7 +1200,7 @@ export class AzureRMTools {
         }
 
         // Nope, have to read it from disk
-        const contents = (await fse.readFile(uri.fsPath, { encoding: 'utf8' })).toString();
+        const contents = await readUtf8FileWithBom(uri.fsPath);
         return new DeploymentTemplate(contents, uri);
     }
 
@@ -1215,7 +1216,7 @@ export class AzureRMTools {
         }
 
         // Nope, have to read it from disk
-        const contents = (await fse.readFile(uri.fsPath, { encoding: 'utf8' })).toString();
+        const contents = await readUtf8FileWithBom(uri.fsPath);
         return new DeploymentParameters(contents, uri);
     }
 
diff --git a/src/parameterFiles/parameterFiles.ts b/src/parameterFiles/parameterFiles.ts
index 6f4391c92..ce9608385 100644
--- a/src/parameterFiles/parameterFiles.ts
+++ b/src/parameterFiles/parameterFiles.ts
@@ -13,6 +13,7 @@ import { ext } from '../extensionVariables';
 import { queryCreateParameterFile } from '../parameterFileGeneration';
 import { containsParametersSchema } from '../schemas';
 import { normalizePath } from '../util/normalizePath';
+import { readUtf8FileWithBom } from '../util/readUtf8FileWithBom';
 import { DeploymentFileMapping } from './DeploymentFileMapping';
 
 const readAtMostBytesToFindParamsSchema = 4 * 1024;
@@ -47,8 +48,8 @@ export async function selectParameterFile(actionContext: IActionContext, mapping
   let templateUri: Uri = sourceUri;
 
   // Verify it's a template file (have to read in entire file to do full validation)
-  const contents = (await fse.readFile(templateUri.fsPath, { encoding: "utf8" })).toString();
-  const template: DeploymentTemplate = new DeploymentTemplate(contents, Uri.file("https://Check file is template"));
+  const contents = await readUtf8FileWithBom(templateUri.fsPath);
+  const template: DeploymentTemplate = new DeploymentTemplate(contents, templateUri);
   if (!template.hasArmSchemaUri()) {
     throw new Error(`"${templateUri.fsPath}" does not appear to be an Azure Resource Manager deployment template file.`);
   }
diff --git a/src/util/readUtf8FileWithBom.ts b/src/util/readUtf8FileWithBom.ts
new file mode 100644
index 000000000..52578fa29
--- /dev/null
+++ b/src/util/readUtf8FileWithBom.ts
@@ -0,0 +1,15 @@
+// ----------------------------------------------------------------------------
+// Copyright (c) Microsoft Corporation.  All rights reserved.
+// ----------------------------------------------------------------------------
+
+import * as fse from 'fs-extra';
+
+const utf8Bom = 65279;
+
+export async function readUtf8FileWithBom(fsPath: string): Promise<string> {
+    let contents = (await fse.readFile(fsPath, { encoding: "utf8" }));
+    if (contents.charCodeAt(0) === utf8Bom) {
+        contents = contents.slice(1);
+    }
+    return contents;
+}
diff --git a/test/support/TempFile.ts b/test/support/TempFile.ts
index f8a91a59f..53298ecf5 100644
--- a/test/support/TempFile.ts
+++ b/test/support/TempFile.ts
@@ -6,9 +6,9 @@
 
 import * as assert from 'assert';
 import * as fs from 'fs';
-import * as fse from 'fs-extra';
 import * as path from 'path';
 import { commands, TextDocument, TextEditor, Uri, window, workspace } from 'vscode';
+import { readUtf8FileWithBom } from "../../extension.bundle";
 import { getTempFilePath } from './getTempFilePath';
 
 export class TempFile {
@@ -22,8 +22,8 @@ export class TempFile {
         fs.writeFileSync(this.fsPath, contents);
     }
 
-    public static fromExistingFile(filepath: string): TempFile {
-        const contents: string = fse.readFileSync(filepath).toString();
+    public static async fromExistingFile(filepath: string): Promise<TempFile> {
+        const contents: string = await readUtf8FileWithBom(filepath);
         return new TempFile(contents, path.basename(filepath), path.extname(filepath));
     }
 
diff --git a/test/support/diagnostics.ts b/test/support/diagnostics.ts
index 6aec0a773..7daee66af 100644
--- a/test/support/diagnostics.ts
+++ b/test/support/diagnostics.ts
@@ -394,7 +394,7 @@ export async function getDiagnosticsForTemplate(
                 paramsFile = new TempFile(unmarkedParams);
             } else {
                 const absPath = path.join(testFolder, options.parametersFile!);
-                paramsFile = TempFile.fromExistingFile(absPath);
+                paramsFile = await TempFile.fromExistingFile(absPath);
             }
 
             // Map template to params