diff --git a/src/etc/testcases/taskdefs/optional/xml/apache.xsl b/src/etc/testcases/taskdefs/optional/xml/apache.xsl
new file mode 100644
index 000000000..977c38bfb
--- /dev/null
+++ b/src/etc/testcases/taskdefs/optional/xml/apache.xsl
@@ -0,0 +1,19 @@
+<?xml version="1.0" encoding="utf-8"?>
+<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
+                version="1.0">
+
+  <xsl:output method="xml"/>
+
+  <xsl:template match="/">
+    <authors>
+        <xsl:apply-templates/>
+    </authors>
+  </xsl:template>
+  <xsl:template match="author">
+    <author>
+      <xsl:attribute name="name">
+        <xsl:value-of select="@name"/>
+      </xsl:attribute>
+    </author>
+  </xsl:template> 
+</xsl:stylesheet>
diff --git a/src/etc/testcases/taskdefs/optional/xml/docwithentity.xml b/src/etc/testcases/taskdefs/optional/xml/docwithentity.xml
new file mode 100644
index 000000000..e6c66abe3
--- /dev/null
+++ b/src/etc/testcases/taskdefs/optional/xml/docwithentity.xml
@@ -0,0 +1,13 @@
+<?xml version="1.0" encoding="iso-8859-1"?>
+<!DOCTYPE books [
+   <!ENTITY globaldefinitions SYSTEM "entity.xml">
+]>
+<books>
+   &globaldefinitions;
+   <book name="the lord of rings">
+       <author name="tolkien"/>
+   </book>
+   <book name="le malade imaginaire">
+       <author name="moliere"/>
+   </book>
+</books>
\ No newline at end of file
diff --git a/src/etc/testcases/taskdefs/optional/xml/entity.xml b/src/etc/testcases/taskdefs/optional/xml/entity.xml
new file mode 100644
index 000000000..70b5aa488
--- /dev/null
+++ b/src/etc/testcases/taskdefs/optional/xml/entity.xml
@@ -0,0 +1,3 @@
+   <book name="hamlet">
+       <author name="shakespeare"/>
+   </book>
diff --git a/src/etc/testcases/taskdefs/optional/xslt.xml b/src/etc/testcases/taskdefs/optional/xslt.xml
index 301a675f7..fd1531b96 100644
--- a/src/etc/testcases/taskdefs/optional/xslt.xml
+++ b/src/etc/testcases/taskdefs/optional/xslt.xml
@@ -1,12 +1,24 @@
 <?xml version="1.0" encoding="UTF-8" ?>
 
 <project name="xslt" default="xslt" basedir=".">
+  <property name="nonasciidir" value="xml/&#0227;nt"/>
   <target name="init">
       <mkdir dir="xml/out"/>
   </target>
 
+  <target name="initNonAscii">
+      <mkdir dir="${nonasciidir}"/>
+      <copy todir="${nonasciidir}">
+        <fileset dir="xml">
+          <include name="docwithentity.xml"/>
+          <include name="entity.xml"/>
+        </fileset>
+      </copy>
+  </target>
+
   <target name="teardown">
       <delete dir="xml/out"/>
+      <delete dir="${nonasciidir}" quiet="true"/>
   </target>
   
   <target name="testCatchNoDtd" depends="init">
@@ -60,6 +72,11 @@
            </factory>
     </xslt>
   </target>
-
-  
+  <!-- inspired by bug report 37348 -->
+  <target name="testXMLWithEntitiesInNonAsciiPath" depends="initNonAscii">
+    <xslt in="${nonasciidir}/docwithentity.xml"
+           out="xml/out/test-out.xml"
+           style="xml/apache.xsl">
+    </xslt>
+  </target>
 </project>
diff --git a/src/main/org/apache/tools/ant/util/FileUtils.java b/src/main/org/apache/tools/ant/util/FileUtils.java
index bef60cf36..e7e82f25f 100644
--- a/src/main/org/apache/tools/ant/util/FileUtils.java
+++ b/src/main/org/apache/tools/ant/util/FileUtils.java
@@ -17,34 +17,25 @@
 
 package org.apache.tools.ant.util;
 
-import java.io.BufferedInputStream;
-import java.io.BufferedReader;
-import java.io.BufferedWriter;
 import java.io.File;
 import java.io.IOException;
 import java.io.InputStream;
-import java.io.InputStreamReader;
-import java.io.OutputStreamWriter;
 import java.io.Reader;
 import java.io.Writer;
 import java.io.OutputStream;
 import java.net.MalformedURLException;
 import java.net.URL;
-import java.text.CharacterIterator;
 import java.text.DecimalFormat;
-import java.text.StringCharacterIterator;
 import java.util.Random;
 import java.util.Stack;
 import java.util.StringTokenizer;
 import java.util.Vector;
 import org.apache.tools.ant.BuildException;
 import org.apache.tools.ant.Project;
-import org.apache.tools.ant.filters.util.ChainReaderHelper;
 import org.apache.tools.ant.taskdefs.condition.Os;
 import org.apache.tools.ant.types.FilterSetCollection;
 import org.apache.tools.ant.types.resources.FileResource;
 import org.apache.tools.ant.launch.Locator;
-import org.apache.xerces.util.URI;
 
 /**
  * This class also encapsulates methods which allow Files to be
diff --git a/src/testcases/org/apache/tools/ant/taskdefs/optional/XsltTest.java b/src/testcases/org/apache/tools/ant/taskdefs/optional/XsltTest.java
index 3bb12908a..8ce7fd540 100644
--- a/src/testcases/org/apache/tools/ant/taskdefs/optional/XsltTest.java
+++ b/src/testcases/org/apache/tools/ant/taskdefs/optional/XsltTest.java
@@ -85,5 +85,8 @@ public class XsltTest extends BuildFileTest {
     public void testAttribute() throws Exception {
         executeTarget("testAttribute");
     }
+    public void testXMLWithEntitiesInNonAsciiPath() throws Exception {
+        executeTarget("testXMLWithEntitiesInNonAsciiPath");
+    }
 }