diff --git a/extensions/markdown-language-features/preview-src/index.ts b/extensions/markdown-language-features/preview-src/index.ts
index 4c03209e06b..4b012c5eeb1 100644
--- a/extensions/markdown-language-features/preview-src/index.ts
+++ b/extensions/markdown-language-features/preview-src/index.ts
@@ -77,10 +77,16 @@ onceDocumentLoaded(() => {
 		doAfterImagesLoaded(() => {
 			// Try to scroll to fragment if available
 			if (settings.settings.fragment) {
+				let fragment: string;
+				try {
+					fragment = encodeURIComponent(settings.settings.fragment);
+				} catch {
+					fragment = settings.settings.fragment;
+				}
 				state.fragment = undefined;
 				vscode.setState(state);
 
-				const element = getLineElementForFragment(settings.settings.fragment, documentVersion);
+				const element = getLineElementForFragment(fragment, documentVersion);
 				if (element) {
 					scrollDisabledCount += 1;
 					scrollToRevealSourceLine(element.line, documentVersion, settings);
diff --git a/extensions/markdown-language-features/src/preview/preview.ts b/extensions/markdown-language-features/src/preview/preview.ts
index ef01cb50d07..828442a76e5 100644
--- a/extensions/markdown-language-features/src/preview/preview.ts
+++ b/extensions/markdown-language-features/src/preview/preview.ts
@@ -37,7 +37,7 @@ export class PreviewDocumentVersion {
 interface MarkdownPreviewDelegate {
 	getTitle?(resource: vscode.Uri): string;
 	getAdditionalState(): {};
-	openPreviewLinkToMarkdownFile(markdownLink: vscode.Uri, fragment: string): void;
+	openPreviewLinkToMarkdownFile(markdownLink: vscode.Uri, fragment: string | undefined): void;
 }
 
 class MarkdownPreview extends Disposable implements WebviewResourceProvider {
@@ -410,7 +410,7 @@ class MarkdownPreview extends Disposable implements WebviewResourceProvider {
 				try {
 					const doc = await vscode.workspace.openTextDocument(vscode.Uri.from(resolved.uri));
 					if (isMarkdownFile(doc)) {
-						return this._delegate.openPreviewLinkToMarkdownFile(doc.uri, resolved.fragment ?? '');
+						return this._delegate.openPreviewLinkToMarkdownFile(doc.uri, resolved.fragment ? decodeURIComponent(resolved.fragment) : undefined);
 					}
 				} catch {
 					// Noop