diff --git a/IPython/core/magic.py b/IPython/core/magic.py
index ee84680..26c269c 100644
--- a/IPython/core/magic.py
+++ b/IPython/core/magic.py
@@ -96,6 +96,9 @@ def needs_local_scope(func):
 # Used for exception handling in magic_edit
 class MacroToEdit(ValueError): pass
 
+# Taken from PEP 263, this is the official encoding regexp.
+_encoding_declaration_re = re.compile(r"^#.*coding[:=]\s*([-\w.]+)")
+
 #***************************************************************************
 # Main class implementing Magic functionality
 
@@ -2151,16 +2154,33 @@ Currently the magic system has the following functions:\n"""
         %loadpy http://www.example.com/myscript.py
         """
         arg_s = unquote_filename(arg_s)
-        if not arg_s.endswith('.py'):
+        remote_url = arg_s.startswith(('http://', 'https://'))
+        local_url = not remote_url
+        if local_url and not arg_s.endswith('.py'):
+            # Local files must be .py; for remote URLs it's possible that the
+            # fetch URL doesn't have a .py in it (many servers have an opaque
+            # URL, such as scipy-central.org).
             raise ValueError('%%load only works with .py files: %s' % arg_s)
-        if arg_s.startswith('http'):
+        if remote_url:
             import urllib2
-            response = urllib2.urlopen(arg_s)
-            content = response.read()
+            fileobj = urllib2.urlopen(arg_s)
+            # While responses have a .info().getencoding() way of asking for
+            # their encoding, in *many* cases the return value is bogus.  In
+            # the wild, servers serving utf-8 but declaring latin-1 are
+            # extremely common, as the old HTTP standards specify latin-1 as
+            # the default but many modern filesystems use utf-8.  So we can NOT
+            # rely on the headers.  Short of building complex encoding-guessing
+            # logic, going with utf-8 is a simple solution likely to be right
+            # in most real-world cases.
+            linesource = fileobj.read().decode('utf-8', 'replace').splitlines()
         else:
-            with open(arg_s) as f:
-                content = f.read()
-        self.set_next_input(content)
+            fileobj = linesource = open(arg_s)
+        
+        # Strip out encoding declarations
+        lines = [l for l in linesource if not _encoding_declaration_re.match(l)]
+        fileobj.close()
+        
+        self.set_next_input(os.linesep.join(lines))
 
     def _find_edit_target(self, args, opts, last_call):
         """Utility method used by magic_edit to find what to edit."""