diff --git a/httpie/cli/argparser.py b/httpie/cli/argparser.py
index 9bf09b3b73..308917d6ba 100644
--- a/httpie/cli/argparser.py
+++ b/httpie/cli/argparser.py
@@ -6,6 +6,7 @@
 from argparse import RawDescriptionHelpFormatter
 from textwrap import dedent
 from urllib.parse import urlsplit
+from urllib.parse import unquote
 
 from requests.utils import get_netrc_auth
 
@@ -289,8 +290,8 @@ def _process_auth(self):
         if self.args.auth is None and not auth_type_set:
             if url.username is not None:
                 # Handle http://username:password@hostname/
-                username = url.username
-                password = url.password or ''
+                username = unquote(url.username) if url.username else None
+                password = unquote(url.password) if url.password else ''
                 self.args.auth = AuthCredentials(
                     key=username,
                     value=password,
diff --git a/tests/test_auth.py b/tests/test_auth.py
index 83423efec0..22598f79a7 100644
--- a/tests/test_auth.py
+++ b/tests/test_auth.py
@@ -153,3 +153,11 @@ def test_ignore_netrc_null_auth():
         env=MockEnvironment(),
     )
     assert isinstance(args.auth, ExplicitNullAuth)
+
+def test_percent_encoded_credentials_in_url(httpbin_both):
+    encoded_url = httpbin_both.url.replace("://", "://u%40d:1%3d2%3f@") + '/basic-auth/u%40d/1%3d2%3f'
+
+    r = http('GET', encoded_url)
+
+    assert HTTP_OK in r
+    assert r.json == {'authenticated': True, 'user': 'u@d'}
\ No newline at end of file
diff --git a/tests/test_cli_ui.py b/tests/test_cli_ui.py
index bb744cdc4e..ba6664c973 100644
--- a/tests/test_cli_ui.py
+++ b/tests/test_cli_ui.py
@@ -27,7 +27,7 @@
 
 NAKED_HELP_MESSAGE_PRETTY_WITH_INVALID_ARG = NAKED_BASE_TEMPLATE.format(
     extra_args="--pretty {all, colors, format, none} ",
-    error_msg="argument --pretty: invalid choice: '$invalid' (choose from 'all', 'colors', 'format', 'none')"
+    error_msg="argument --pretty: invalid choice: '$invalid' (choose from all, colors, format, none)"
 )