diff --git a/CHANGES b/CHANGES
index c9275c720..f3435ab2d 100644
--- a/CHANGES
+++ b/CHANGES
@@ -1,6 +1,9 @@
 Release 0.6.6 (in development)
 ==============================
 
+* #414: Fix handling of Windows newlines in files included with
+  the ``literalinclude`` directive.
+
 * #377: Fix crash in linkcheck builder.
 
 * #387: Fix the display of search results in ``dirhtml`` output.
diff --git a/sphinx/directives/code.py b/sphinx/directives/code.py
index f5a8f8af4..65bd01227 100644
--- a/sphinx/directives/code.py
+++ b/sphinx/directives/code.py
@@ -116,7 +116,7 @@ class LiteralInclude(Directive):
 
         encoding = self.options.get('encoding', env.config.source_encoding)
         try:
-            f = codecs.open(fn, 'rU', encoding)
+            f = codecs.EncodedFile(open(fn, 'U'), encoding)
             lines = f.readlines()
             f.close()
         except (IOError, OSError):