diff --git a/web/pgadmin/utils/driver/psycopg3/encoding.py b/web/pgadmin/utils/driver/psycopg3/encoding.py
index da317e008..b994f9ecb 100644
--- a/web/pgadmin/utils/driver/psycopg3/encoding.py
+++ b/web/pgadmin/utils/driver/psycopg3/encoding.py
@@ -9,12 +9,67 @@
 
 #  Get Postgres and Python encoding
 
+import codecs
+import encodings.raw_unicode_escape
+
 import psycopg
 from flask import current_app
 
+# Python codec used for SQL_ASCII databases. It behaves exactly like
+# raw_unicode_escape, except that a backslash sequence which is not a valid
+# \uXXXX or \UXXXXXXXX escape (for example the '\U' in a column named
+# 'C:\User') is kept as the literal bytes rather than raising
+# UnicodeDecodeError. psycopg decodes column names and query text with the
+# connection codec, so a strict decode there breaks View/Edit Data.
+SQL_ASCII_CODEC = 'pgadmin_sql_ascii'
+_SQL_ASCII_ERRORS = 'pgadmin_sql_ascii_literal'
+
+
+def _keep_invalid_escape(exc):
+    if not isinstance(exc, UnicodeDecodeError):
+        raise exc
+    # Every byte maps to the same code point in latin-1, which is also what
+    # raw_unicode_escape produces for the bytes it does not unescape.
+    return exc.object[exc.start:exc.end].decode('latin-1'), exc.end
+
+
+def _sql_ascii_errors(errors):
+    # psycopg decodes server error messages with errors='replace', so keep
+    # invalid escapes literally there too, rather than showing U+FFFD in
+    # place of part of the object name.
+    if errors in ('strict', 'replace'):
+        return _SQL_ASCII_ERRORS
+    return errors
+
+
+def _sql_ascii_decode(data, errors='strict'):
+    return codecs.raw_unicode_escape_decode(data, _sql_ascii_errors(errors))
+
+
+class _SQLAsciiIncrementalDecoder(
+        encodings.raw_unicode_escape.IncrementalDecoder):
+    def _buffer_decode(self, data, errors, final):
+        return super()._buffer_decode(data, _sql_ascii_errors(errors), final)
+
+
+def _sql_ascii_search(name):
+    if name != SQL_ASCII_CODEC:
+        return None
+    return codecs.CodecInfo(
+        name=SQL_ASCII_CODEC,
+        encode=codecs.raw_unicode_escape_encode,
+        decode=_sql_ascii_decode,
+        incrementalencoder=encodings.raw_unicode_escape.IncrementalEncoder,
+        incrementaldecoder=_SQLAsciiIncrementalDecoder,
+    )
+
+
+codecs.register_error(_SQL_ASCII_ERRORS, _keep_invalid_escape)
+codecs.register(_sql_ascii_search)
+
 encode_dict = {
-    'SQL_ASCII': ['SQL_ASCII', 'raw-unicode-escape'],
-    'SQLASCII': ['SQLASCII', 'raw-unicode-escape'],
+    'SQL_ASCII': ['SQL_ASCII', SQL_ASCII_CODEC],
+    'SQLASCII': ['SQLASCII', SQL_ASCII_CODEC],
     # EUC_TW Not availble in Python,
     # so psycopg3 do not support it, we are on our own
     'EUC_TW': ['BIG5', 'big5'],
@@ -35,7 +90,7 @@ def get_encoding(key):
     # Reference: https://www.postgresql.org/docs/11/multibyte.html
     #
     if key == 'ascii':
-        key = 'raw_unicode_escape'
+        key = SQL_ASCII_CODEC
     try:
         postgres_encoding = psycopg._encodings.py2pgenc(key).decode()
     except Exception as e:
diff --git a/web/pgadmin/utils/driver/psycopg3/tests/test_encoding.py b/web/pgadmin/utils/driver/psycopg3/tests/test_encoding.py
index 47554408c..f2467c4fc 100644
--- a/web/pgadmin/utils/driver/psycopg3/tests/test_encoding.py
+++ b/web/pgadmin/utils/driver/psycopg3/tests/test_encoding.py
@@ -44,8 +44,8 @@ class TestEncoding(BaseTestGenerator):
          dict(key='EUC_TW', expected=['utf-8', 'utf-8'])),
         ('UNICODE falls back to the pgAdmin-only override',
          dict(key='UNICODE', expected=['utf-8', 'utf-8'])),
-        ('the ascii special-case resolves via raw_unicode_escape',
-         dict(key='ascii', expected=['SQLASCII', 'raw-unicode-escape'])),
+        ('the ascii special-case resolves via the SQL_ASCII codec',
+         dict(key='ascii', expected=['SQLASCII', 'pgadmin_sql_ascii'])),
     ]
 
     # Only set by scenarios where more than one result is correct.
diff --git a/web/pgadmin/utils/driver/psycopg3/tests/test_sql_ascii_codec.py b/web/pgadmin/utils/driver/psycopg3/tests/test_sql_ascii_codec.py
new file mode 100644
index 000000000..dc2355625
--- /dev/null
+++ b/web/pgadmin/utils/driver/psycopg3/tests/test_sql_ascii_codec.py
@@ -0,0 +1,82 @@
+##########################################################################
+#
+# pgAdmin 4 - PostgreSQL Tools
+#
+# Copyright (C) 2013 - 2026, The pgAdmin Development Team
+# This software is released under the PostgreSQL Licence
+#
+##########################################################################
+
+"""
+Unit tests for the codec used for SQL_ASCII databases (#5940).
+
+Identifiers or data containing a backslash followed by 'u' or 'U' (for
+example a table or column called 'C:\\User\\te') used to make
+raw_unicode_escape raise "truncated \\UXXXXXXXX escape" whilst psycopg
+decoded the column names, breaking View/Edit Data.
+"""
+
+import codecs
+
+from pgadmin.utils.driver.psycopg3.encoding import SQL_ASCII_CODEC
+from pgadmin.utils.route import BaseTestGenerator
+
+
+class TestSQLAsciiCodec(BaseTestGenerator):
+    """Decode/encode behaviour of the SQL_ASCII codec."""
+
+    scenarios = [
+        ('Invalid \\U escape is kept literally',
+         dict(data=b'C:\\User\\te', expected='C:\\User\\te')),
+        ('Invalid \\u escape is kept literally',
+         dict(data=b'C:\\users', expected='C:\\users')),
+        ('Truncated escape at the end is kept literally',
+         dict(data=b'abc\\u12', expected='abc\\u12')),
+        ('Valid \\u escape is still unescaped',
+         dict(data=b'caf\\u00e9', expected='caf\u00e9',
+              round_trip=False)),
+        ('Valid escape after an invalid one is still unescaped',
+         dict(data=b'\\User \\u00e9', expected='\\User \u00e9',
+              round_trip=False)),
+        ('High bytes decode as latin-1, as with raw_unicode_escape',
+         dict(data=b'\xe9\\Ux', expected='\xe9\\Ux')),
+        ('Other backslash sequences are left alone',
+         dict(data=b'C:\\temp\\new', expected='C:\\temp\\new')),
+    ]
+
+    # raw_unicode_escape writes code points below 256 as single bytes, so
+    # an unescaped \u00e9 does not encode back to the original escape.
+    round_trip = True
+
+    def setUp(self):
+        # No DB connection needed for this test.
+        pass
+
+    def runTest(self):
+        decoded = self.data.decode(SQL_ASCII_CODEC)
+        self.assertEqual(decoded, self.expected)
+        self.assertEqual(str(self.data, SQL_ASCII_CODEC), self.expected)
+
+        # Encoding must match raw_unicode_escape, so queries built from
+        # the decoded names are sent to the server unchanged.
+        self.assertEqual(decoded.encode(SQL_ASCII_CODEC),
+                         decoded.encode('raw_unicode_escape'))
+        if self.round_trip:
+            self.assertEqual(decoded.encode(SQL_ASCII_CODEC), self.data)
+
+        # psycopg decodes server error messages with errors='replace',
+        # which must keep invalid escapes literally as well.
+        self.assertEqual(self.data.decode(SQL_ASCII_CODEC, 'replace'),
+                         self.expected)
+
+        # Decoding a byte at a time, as a stream reader would, gives the
+        # same result as decoding the whole value at once.
+        decoder = codecs.getincrementaldecoder(SQL_ASCII_CODEC)()
+        self.assertEqual(
+            ''.join(decoder.decode(self.data[i:i + 1])
+                    for i in range(len(self.data))) +
+            decoder.decode(b'', final=True),
+            self.expected)
+        self.assertEqual(
+            codecs.getincrementalencoder(SQL_ASCII_CODEC)().encode(decoded),
+            decoded.encode(SQL_ASCII_CODEC))