diff --git a/hgext/extdiff.py b/hgext/extdiff.py
--- a/hgext/extdiff.py
+++ b/hgext/extdiff.py
@@ -76,7 +76,6 @@ from mercurial import (
     archival,
     cmdutil,
     commands,
-    encoding,
     error,
     filemerge,
     scmutil,
@@ -365,7 +364,10 @@ def uisetup(ui):
                 if options:
                     options = ' ' + options
                 return dodiff(ui, repo, cmdline + options, pats, opts)
-            doc = _('''\
+            # We can't pass non-ASCII through docstrings (and path is
+            # in an unknown encoding anyway)
+            docpath = path.encode("string-escape")
+            mydiff.__doc__ = '''\
 use %(path)s to diff repository (or selected files)
 
     Show differences between revisions for the specified files, using
@@ -376,15 +378,7 @@ use %(path)s to diff repository (or sele
     that revision is compared to the working directory, and, when no
     revisions are specified, the working directory files are compared
     to its parent.\
-''') % {'path': util.uirepr(path)}
-
-            # We must translate the docstring right away since it is
-            # used as a format string. The string will unfortunately
-            # be translated again in commands.helpcmd and this will
-            # fail when the docstring contains non-ASCII characters.
-            # Decoding the string to a Unicode string here (using the
-            # right encoding) prevents that.
-            mydiff.__doc__ = doc.decode(encoding.encoding)
+''' % {'path': util.uirepr(docpath)}
             return mydiff
         command(cmd, extdiffopts[:], _('hg %s [OPTION]... [FILE]...') % cmd,
                 inferrepo=True)(save(cmdline))
diff --git a/tests/test-extdiff.t b/tests/test-extdiff.t
--- a/tests/test-extdiff.t
+++ b/tests/test-extdiff.t
@@ -389,3 +389,23 @@ Test symlinks handling (issue1909)
   $ cd ..
 
 #endif
+
+Test handling of non-ASCII paths in generated docstrings (issue5301)
+
+  >>> open("u", "w").write("\xa5\xa5")
+  $ U=`cat u`
+
+  $ HGPLAIN=1 hg --config hgext.extdiff= --config extdiff.cmd.td=hi help -k xyzzy
+  abort: no matches
+  (try "hg help" for a list of topics)
+  [255]
+
+  $ HGPLAIN=1 hg --config hgext.extdiff= --config extdiff.cmd.td=hi help td > /dev/null
+
+  $ LC_MESSAGES=ja_JP.UTF-8 hg --config hgext.extdiff= --config extdiff.cmd.td=$U help -k xyzzy
+  abort: no matches
+  (try "hg help" for a list of topics)
+  [255]
+
+  $ LC_MESSAGES=ja_JP.UTF-8 hg --config hgext.extdiff= --config extdiff.cmd.td=$U help td | grep "^use"
+  use '\xa5\xa5' to diff repository (or selected files)